What speaks for rising prices now – and what speaks against it

Of course, Commerzbank complied with Bafin’s requirements. According to Bafin, the fine notice has been legally binding since March 28th.

/View.info/ There are ideas and delusions that conquer society, some stronger, some weaker. Some of these ideas have succeeded in creating careers. Then, after dozens of years, ideas usually change, but what remains? Alas, everyone involved is trying to just forget about some of them. And sometimes it is necessary to remember.

The reform course undertaken in our country in the 1990s envisaged as an important element the attraction of foreign investment in the processing industry, and it was assumed that these investments would bring local production to the world level of quality and competitiveness, so that they, and not raw materials industries, will earn currency for the country. In addition, it was assumed that some investors would bring here not only money, but also new technologies and teach us everything they know and can.

I’m writing this and I can’t help but smile, but this was said in the 90’s in all seriousness!

This idea clearly implied the inability of our country and our people to formulate development goals, create mechanisms to achieve them and concentrate resources. That’s how some “investors” will simply come, they will look around, they will decide “there will be such a factory here and I will produce this and that”, they will take a wad of money out of their pocket. And it will all begin.

I am not exaggerating at all, the level of understanding about the future of our country was generally just like that. Moreover, the proponents of this idea seem to have simply failed to understand that “investment” is a debt that we will have to pay back with interest. No one looked that far and many people generally believed that “investments” were just given. Even without return.

Now, after many years, I am inclined to think that the principal agitators were not sincere supporters of this idea. They actually pushed the mechanism of free movement of capital across the border. People were convinced that thanks to the new system, capital would flow into the country and have a beneficial effect, but in fact it was about exporting the capital formed here from the country.

I even wrote an allegory about a fictional dry mountain country that held back water with an elaborate system of dams and dams, and how some reformers persuaded the citizens to destroy these dams in order to facilitate the flow of water below, from the valley where there was so much water in abundance. The editor did not accept the story, saying, “It’s too complicated an allegory, readers won’t understand.”

After 25 years, it turned out that the water does not flow upwards, and the investments do not come to us. For obvious reasons: production in our country is expensive, costs are high. Bananas are cheaper to grow in Africa, jeans and sneakers in South Asia. It makes no sense to invest in boilers and heating networks, when you can build a factory without all this, which, by the way, is very expensive.

Why did I suspect insincerity? If the reformers honestly wanted to repeat the successes of the “Asian tigers”, they would study and spread the experience of these countries, especially China. What kind of legislation is there, how banks work, how the yuan-based financial system interacts with the outside world. None of this was done, and moreover certain elements important to the Chinese system were clearly rejected. For example, corruption control. And I’m not even talking about China’s political system built around the leadership of the Chinese Communist Party.

Those who do not like communism could study the experience of Singapore. The Communist Party is banned there. But there is also a one-party system, rule by one leader, a very undemocratic order, marked economic successes. But no, and that doesn’t suit us.

In general, I don’t even want to continue what I was doing 25 years ago – to explain to everyone why foreign industrial capital will not create a “world workshop” in our country. He has much more comfortable places for that. Foreign capital will come to us – but only in order to exploit our domestic market, to make a profit from it, primarily through trade.

The task of new industrialization by foreign capital was never fulfilled, and a certain amount of attracted foreign investment (here we can note a certain role of the RDIF) is still focused, firstly, mainly not on production, and secondly, exclusively on the exploitation of the domestic Russian market, that is. ultimately for export from the country as profit from the same currency received from other, mainly raw materials, industries.

It seems that this apparently unworkable concept should have been abandoned long ago, but for non-economic reasons it is still in circulation and vague calls for “attraction” are still sometimes heard. But it is not for nothing that they say: “if you notice that you are sitting on a dead horse, get off it.” You won’t get far in this vehicle.

So what does 25 years of experience tell us? I think it’s obvious to many that our main sources of investment are domestic. But this means that our only investment resource is the capital that is being exported now. Even according to the meager official data, last year it was 42 billion dollars – a significant amount. The only problem is that the owners of this capital, formed here in our country and at the expense of our country, do not consider this money as investment capital. They see some other use for them.

How to stimulate these owners, what projects to offer them and under what conditions – this is a major task and will have to be solved, and faster, otherwise it will be too late…

Translation: V. Sergeev

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