The Independent: Putin's economic strategy shows that Russia has not changed much in 100 years

100 years ago, on March 14, 1921, the Tenth Congress of the All-Russian Communist Party (Soviet) announced the "replacement of the food appropriation system with an agricultural tax," and this allowed Russian farmers to provide the state between 25% and 40% of their total agricultural production in exchange for About being subjected to constant looting by gunmen who confiscate their crops under the pretext of "permanent revolution."

Since then, the villagers can sell the remainder of their harvest wherever they want at the market price.

Writer Vladislav Inozimtsev, in a report for the British newspaper, The Independent, says that this change, which Vladimir Lenin called the "New Economic Policy", fully contributed in less than a year to the restoration of free trade, the reinstatement of private ownership, the abolition of the nationalization of small companies, and the permission for foreign companies By doing business in Soviet Russia, and converting the (Soviet) ruble into a convertible currency.

The country was in dire need of change, and the results of the new path were encouraging, such as an increase in the annual growth rate between 1921 and 1926 to 25.4%, agricultural production surpassing pre-World War I levels by 1927, and the growth of industry destroyed by the war.

Foreign trade between 1921 and 1927 also achieved an annual growth rate of 36%, and some economic sectors developed faster.

A catastrophic failure

The writer pointed out that this new economic policy was doomed to failure from the start.

On the one hand, the Bolsheviks felt that it prevented them from achieving their main goal of building a centralized economy controlled by the state, so the "agreement" with the peasants failed at the beginning of 1923 when the government began to reduce the prices of food products and increase the value of industrial goods, and by 1927 this project stopped .

On the other hand, private enterprises were not able to build the heavy industries that the Communists dreamed of.

The more dynamic medium and small firms were covering the needs of the consumer market, so industrial growth slowed in the second half of the 1920s.

In 1929, the first five-year plan was adopted, and the market economy soon disappeared and the engineers and managers were replaced by secret police and bureaucrats of the ruling party.

The writer pointed out that the path taken by the Soviet Union in that period is somewhat similar to what Russia witnessed after 80 years.

In the year 2000, that is, after 8 years of economic collapse, poverty and hyperinflation, the newly elected President Vladimir Putin tried to restore life to normal, as the government imposed a low fixed tax rate, worked to make the foreign exchange market stable, and announced its desire to make the ruble part of Reserve currency.

Economic liberalization and the return of order contributed to the stock market boom between 2000 and 2005, as many industries developed that were absent in the Soviet and early post-Soviet periods.

Russia became the second home of high-paid foreign managers, while real GDP per capita increased by an average of 2.5 by 2007. The symbolic reconciliation between the losers of World War I (Soviet Russia and Germany) that marked the time of Lenin's new policies paved the way for the unexpected alliance between Russia and the states. The United States considered "innocent victims" of international terrorism, according to the newspaper.

similarity

However, new economic policies in the 20th and 21st centuries were also similar in some other respects.

In the 1920s, an agricultural economy based on natural resources was the basis for the country's rise.

Whereas in the first decade of the 21st century, the energy sector played the same role due to the rise in oil and natural gas prices that provided a huge cash flow to Russia.

The writer added that oil export revenues reached an average of 33.5 billion dollars annually between 2000 and 2004, which is higher than in 1999. The difference grew to 223.6 billion dollars between 2005 and 2008 and 394 billion dollars between 2011 and 2013.

As before, growth has been driven by consumer market-oriented industries.

At a time when the Russian economy was exposed to the global financial crisis in 2008, the sources of growth were almost exhausted.

As in the 1920s, this growth in itself did not guarantee technological modernization.

During that period, the government worked - in more civilized ways than before - to unify the largest companies under its control and began to review the "terms of the agreement" to increase the tax burden, reduce the powers of regional authorities, reduce education and healthcare expenditures, and raise the retirement age.

Monopoly on foreign trade

By the second half of the first decade of the 21st century, a new "ruling elite" had formed and the first elements to monopolize foreign trade had emerged. Former Secret Service members and retired statesmen-turned-soldiers were able to establish effective control over the state's major financial flows.

The writer believes that the new economic policy did not lead to a large-scale modernization of the economy in any way, as global practice reveals that economic breakthroughs can be secured by imposing strong government hegemony over the economy and setting long-term goals, such as what happened in Japan, Korea, Taiwan or Brazil.

The new economic policy of the 1920s and the first decade of the 21st century was only able to restore the economy to the levels it was before the crisis, in addition to adapting to the changing demands of consumers.

The main difference between the 1930s and the first decade of the 21st century is that in the first period the Bolsheviks focused on achieving a new level of economic development by whatever means and sacrifices, while the current generation of activists is completely satisfied with benefiting from a model economy from the "second world." ".

The author stated that the rapprochement between the Soviet-Russian and global economies was an illusion.

At that time and until now, the outside world was seen as a mere source of capital, equipment and technology, and by no means a role model for lifestyle or a beacon of basic liberal values.

And as international tensions became more serious, economic self-sufficiency prevailed.

Ambitious goals

In the late 1920s, the ruling class set ambitious goals for the country and was ready to achieve them by almost any means, while the elites today focus on securing purely economic benefits.

This situation leads to two results: on the one hand, no reckless moves can be expected from the Putin regime;

But on the other hand, there is no hope that Russia will turn to the West in search of ways and means to achieve intensive modernization, whether economic or social.

The parallels between the "new economic policies" of the 20th and 21st centuries reveal that for more than 100 years Russia has not been able to find its own model for sustainable economic and social development.

For the Russian system, "updates" are strange and sometimes far-fetched. Achieving them requires harsh political coercion, while economic stability is based on working according to past circumstances rather than progress.

Russia's alliances with the outside world have always been temporary and circumstantial and remain so, while the state's dominance of companies continues.

The writer concludes by saying, "Century after century, Russia does not resort to innovative ideas to achieve economic growth except in times of total deficit, to quickly abandon them once the crisis period ends. The country may find itself 100 years from today in another round of its endless circular journey."