/ world today news/ “People are getting worse and worse, and there are more and more cars in the city and they are getting better and better,” complained a friend who conducts a car tour in Izhevsk. When asked why people began to live worse, he answers: “I used to have two or three orders for the production of kitchens, but for a million, and now for 150 thousand rubles, but there are a lot of them.” When a Bentley jeep overtakes us , absolute kitsch for a city with less than a million inhabitants, my companion notices: there are already several in the city, and his two-year-old VW Tiguan is already old, and it will be necessary to replace it.
Meanwhile, Izhevsk has become a solid construction site. If five years ago they built a lot there, but these were projects for blocks of residential buildings, now the standard residential complex is at least a dozen high-rise buildings.
As for now, the city was never built up, even during that short period from 1984 to 1987, when the capital of Udmurtia bore the proud name of Ustinov – this was the time of the most active development of Izhevsk in the USSR.
The fields and waste lands adjacent to the city are being grabbed by developers like hot cakes. Old one-story neighborhoods are being torn down, tower cranes are standing in their place, new roads are being laid, old ones are being modernized, and an international airport terminal is being built.
Izhevsk is one of the beneficiary cities of the special military operation, the same “rear securing the front”. Small arms, air defense systems and drones are produced here, for the organization of the production of which one of the shopping centers had to be urgently redesigned.
The main problem of the city’s economy is an acute shortage of personnel. Wages are rising. The plants, working in three shifts to fulfill the state defense order, steal qualified specialists from each other. Others are ready to hire people without education and work experience, to train them at their own expense for several months – just to fill the vacancies.
Opposite the Izhevsk Automobile Plant, which is not working, there is an advertising banner of the Votkin Plant, which offers work, decent income and social guarantees. Sarapul Electric Generator is looking for people in the station area. Both plants work for the defense industry.
Not only the state defense order, but also the negotiation by the Ministry of Defense contributes to the shortage of personnel. It not only attracts mobile citizens, but also determines the level of desired wages: people are ready to move or work on a rotational basis with an income of 200,000 rubles per month.
The old industrial centers of the country, which lagged behind the mining regions for three decades, felt the huge state demand: Udmurtia, Sverdlovsk, Kurgan, Tula regions, Perm Territory, St. Petersburg.
The list can be continued for a long time. The trend of giant factories losing space and staff has suddenly reversed. Life boiled over.
This growth is felt not only in the industrial regions. Huge funds from the state budget, allocated for the State Defense Order and SVO, are ultimately converted into wages and consumer demand.
At the same time, the fears of inflation, which the monetary authorities in the country have nurtured for many years, did not come true. By the end of the year, it will not exceed five percent.
The economy, full of budget money, demonstrates amazing things – ten-kilometer traffic jams on the Crimean bridge, 400 thousand rubles for a “square” real estate in Sochi, lack of places on the Black and Baltic seas for yacht parking. A boom in the production of consumer goods, in construction, in the field of entertainment and recreation.
Overnight, the Russian economy returned to rapid growth based not on extractive industries but on labor-intensive manufacturing industries. This means that such growth is more even, stable and harmonious. The unemployment rate in the country again updated its historical bottom, reaching 3.1‒3.2%.
There is no free hand: to hire a person, he must be fired somewhere. Five-month GDP growth stands at 0.6%, by the end of the year it will reach 2% (government forecast), but we believe that if current rates of industrial growth remain unchanged, it could reach 4%.
And this in the conditions of the heaviest sanctions, frozen assets and embargoes from the West, reduced gas exports and low oil prices. Isn’t this an economic miracle? The secret of this miracle is simple: the share of government consumption in GDP reached an all-time high of 24.7% at the beginning of this year against an average of 18.2% over the past decade.
The most important result of the SVO is that it forced the Russian financial authorities away from the Kudrin dogmas of accumulating reserves, general savings and pumping money out of the economy with subsequent lending to Western countries.
The result of such a long-term policy is obvious today: the economy is at a standstill and reserves are frozen. The money, not taken out of the economy, but on the contrary, pumped into it, created an economic miracle: GDP grew even against the background of a decline of almost 60% (in the first quarter on an annual basis) in net exports.
However, the Ministry of Finance is again trying to return to the old “cash clamp” policy. The worst thing the state can do now is to start saving money, to sequester the budget. This will immediately slow down the growth of the economy, and will not solve the budget deficit problems.
From year to year, the Russian budget reaches an income of 18.4% of GDP. Simple calculations show that if a growth rate of 4% of GDP is achieved by the end of this year, our GDP will exceed 165 trillion rubles, and tax revenues will exceed 30.4 trillion rubles, while the planned value is 26.1 trillion rubles and budget expenditure is 29 trillion rubles.
That is, the growth of the economy will theoretically allow the budget to be in surplus this year.
Let’s say 4% is too bold a claim. Let’s assume that, maintaining strong fiscal momentum, the economy will grow 2% this year, just 4% next year, and 5% in 2025.
Then budget revenues for the three years will amount to 98.2 trillion rubles – against 95 trillion, which the budget will receive over the three-year period if it cuts spending and thus reduces the growth rate to 1.5% per year.
By the way, according to the plan, until 2025, the expenses of the federal budget should remain at the level of 29 trillion, which means that they will be reduced, taking into account inflation.
Translation: SM
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