Sep 8, 2022
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The dollar lost its future in Russia: the government made it clear

Participants of the Moscow Financial Forum refuted the popular assertion that Russia has only two allies – the army and the navy. “The power component is not the only one that determines victories on all fronts,” said Finance Minister Anton Siluanov. The country’s third ally is financial sovereignty.

Since the Moscow Financial Forum began the day after the end of the Eastern Economic Forum (WEF), many participants barely had time to change from one platform to another. This, in particular, applied to presidential aide Maxim Oreshkin, who spent the whole night on the plane, and to banker Andrei Kostin, who just yesterday famously danced in Vladivostok to the newly popular song “Goodbye, America!”. However, the main speakers looked quite cheerful and fit. And most importantly, they were in a great mood. “Look at Siluanov! You can’t give 220 years, ”remembering the anniversary of the Ministry of Finance, to which the forum is timed this year, State Duma deputy Andrei Makarov joked.

And the head of the Accounts Chamber and ex-Finance Minister Alexei Kudrin, also on the occasion of the anniversary, considered that his leadership and Siluanov accounted for as much as 10% of the history of the department. And these were, in his opinion, not the worst years. Elvira Nabiullina came to the forum in black and without a brooch, which, it would seem, did not bode well. But the head of the Central Bank showed, though more moderate than the other participants, but still optimism and even laughed out loud at the jokes of her colleagues.

Mikhail Mishustin first of all went to get acquainted with the exposition, which reflects the glorious history of the Ministry of Finance. Siluanov, who acted as a guide, drew his attention to the Soviet period and, in particular, to the years of the Second World War. “During the war, they approached finances very carefully,” he said with pressure, obviously hinting that the budget under the conditions of a special operation requires exactly the same approach. By the way, on the sidelines of the forum, the minister repeatedly said that the 2023 budget, which is undergoing the last “polishing” before being submitted to the State Duma, turned out to be the most difficult in his 11-year career.

However, the forum participants tried not to talk about problems in public. Mishustin, in his speech at the plenary session, supported the optimistic trend set by the president the day before, and added a few more sweet spoons to the barrel of honey. The prime minister said that the Russian economy is smoothly adapting to new realities: “Some slowdown was inevitable, but it did not turn out to be destructive, as the initiators of the sanctions assumed.” In January-July, GDP fell by slightly more than 1% compared to the same period last year.

“For comparison: the fall in GDP during the global crisis of 2009 was 7 times stronger, although there were no external restrictions then,” Mishustin emphasized. Attempts by Western countries to limit the energy export of the Russian Federation, according to him, led to a natural increase in oil and gas revenues – almost by half. The indicators of industrial production, agriculture and construction remain positive. And investments, although no one expected this at all, grew by 4%. The main thing is that the prime minister does not expect a long and deep recession, as Bloomberg recently wrote with reference to government materials. “We are successfully responding to emerging challenges and it is obvious that we will emerge from the current situation even stronger and more prepared,” the prime minister said.

The head of the Ministry of Economics, Maxim Reshetnikov, did not have time to return to Moscow from Vladivostok by the beginning of the forum, but it was obvious that the prime minister was relying on his data. Looking at the dynamics, the economic department just recently significantly improved its own forecasts. Now it is believed that the Russian economy will begin to grow at the end of this year, in 2023 there will be a decline of less than 1% compared to what it was before the special operation, and from 2024 a steady growth of 3% annually will resume.

As a result, by 2030, GDP will add 17%, investments will grow by 30%, and real incomes of citizens will increase by 20%. Recall that in recent years, without tough sanctions and other problems, the income of Russians has been steadily falling. But belief in miracles, according to psychologists, is a necessary defense mechanism that allows a person to survive difficult times. So let’s believe…

In addition to the optimistic mood, the Financial Forum was also united with the WEF by the president’s favorite word “sovereignty”. The plenary session was entitled “Russian Financial Sovereignty: Myth or Reality”, and the moderator Andrey Makarov asked Siluanov for a long time what sign should be put at the end: a question mark or an exclamation mark. And which epigraph is better to choose for the meeting: “We were born to make a fairy tale come true” or “We are ours, we will build a new world.” But there was no clear answer to this question.

Mikhail Mishustin stressed in his speech that sovereignty is not about isolation. However, the task of the Cabinet of Ministers is “to form such an architecture in order to solve all the necessary tasks, excluding the influence of third countries.” The most important component of financial sovereignty, according to him, is the rejection of the dollar. This is a long-term trend that requires years of work. “If other countries join this movement, the formation of a multipolar system of international settlements is possible,” Mishustin said.

Maxim Oreshkin scolded the Ministry of Finance for excessive PR of the yuan, which representatives of the department called the most attractive replacement for toxic dollars and euros. According to the assistant to the president, “it is necessary to support your own currency, and not look for a good uncle in the West or in the East, in which you need to invest.” Does not believe in the power of the Chinese currency and Alexei Kudrin. “When buying technology that is critical for us, the yuan will not always be taken,” he predicts. According to the head of the Accounts Chamber, many of today’s problems will be solved if the ruble manages to return to the pool of convertible currencies. “There are only 22 such currencies, and they are accepted for settlements without question,” the official emphasized, recalling that the ruble was convertible from 2006 until February 2022.

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