Russia will withstand the crisis: the “little egg” and the army will help
Contrary to the forecasts of ill-wishers, the current economic crisis will not have catastrophic consequences for Russia.
This opinion is expressed by Oleg Matveychev, a professor at the Higher School of Economics, who notes that the coronavirus and the accompanying drop in oil prices will certainly play a negative role, but this will not be a fatal blow for Russia.
“If you remove emotions and count, then everything is very easy. A country's GDP is divided into 12 months. Therefore, each individual month is 8% of GDP. Two months, respectively, 16% of GDP.
Thus, we receive losses if we had two months of absolute and complete downtime of the entire economy of the country.
But not our entire economy has stopped, but 10 percent are small and medium-sized businesses, and so on (our metallurgy and a number of other industries have not stopped). The service sector and small businesses, of which there are 5-10% in the country, have partially stopped.
Roughly speaking, of this 16% the decline will be 2%. But some enterprises that were forced to disappear for these two months will not resume everything abruptly and, perhaps, for them the story is over. However, there are few such enterprises, although they exist.
There are those industries that will take a long time to recover and will not give the growth that has always been there. Therefore, it is clear that there will not be a two percent drop, but a 4-5% drop.
Let me add here the oil crisis, which will also affect another 1-2%. Therefore, for now I predict a decline in GDP for the year at the level of 6-8%. This is worse than in 14-15, but this is approximately the level of 2008. That is, there is no gigantic catastrophe,” Matveychev noted.
Economist Mikhail Delyagin partly agrees with him. He emphasized that Russia retains large financial reserves. Delyagin announced his plan of action.
“Theoretically, the trend can be reversed within two weeks... To do this, it is necessary to cancel some of the restrictions, introduce a procedure for registering the unemployed with payment of benefits in the amount of two subsistence minimums for the period of restrictive measures and for three months after them. Further, to support small and medium-sized businesses, it is necessary to provide loans in the amount of no less than a quarter of last year’s turnover for a period of no less than a year and no more than 3% per annum to replenish working capital. This is what will stabilize the situation.
And in order to ensure development, infrastructure modernization is necessary. For this, Russia has all the resources... International reserves are $560 billion, which is twice as much as is necessary to ensure the stability of the ruble at any level,” Delyagin said.
Member of the Council on Foreign and Defense Policy, ex-State Duma deputy Sergei Markov emphasized that in the current situation Russia has a number of advantages, including the historical resilience of the population.
“Russia has several big advantages compared to other countries. First and most importantly, Russia is a great country that in its history has gone through much greater adversity and overcome it better than other countries.
For example, most countries surrendered to Napoleon and Hitler, and we defeated them. It was precisely this historical memory of the people that Vladimir Putin appealed to in his recent address.
Secondly, Russia has a strong and powerful state, which is accustomed to solving its problems on its own, accustomed to being independent.
Third, our state and public institutions are quite modern; we are part of the notorious “golden billion” of the population, which is better prepared for the epidemic.
The fourth thing that distinguishes us for the better is that we still have a good epidemiological service. We have separate epidemiologists - such a specialty and institutes, which is not the case in most European countries. We still have laboratories and sanitary and epidemiological stations, which were simply liquidated in other countries...
Another reason that positively distinguishes us from other countries is that we have a very strong army and a very strong Ministry of Emergency Situations. It is characteristic that now these 16 hospitals, which are located next to all million-plus cities, are being built by the army and equipped by the army. Everyone knows that the Russian army is one of the best in the world,” Markov said.
He praised the timely measures that were introduced in Russia in connection with the coronavirus pandemic in the world.
“Russia introduced restrictive measures in a timely manner. Those who had a more stringent quarantine method, which allowed them to minimize the damage from the epidemic, suffered less economic damage. In our country, these measures were taken much earlier, from the point of view of epidemiological time. Therefore, the impact on our economy will be less, and accordingly, the way out of the crisis will be easier,” the political scientist believes.
According to military expert, editor-in-chief of the National Defense magazine Igor Korotchenko, the armed forces will help speed up the recovery from the crisis in Russia. The expert recalled that Russian specialists have extensive experience in fighting viruses, and discipline in the army helped to avoid outbreaks of epidemics similar to those that occurred, for example, in the US Army.
“The experience of China shows that the armed forces played one of the most important roles in suppressing the coronavirus epidemic in the PRC. Today, the Russian Ministry of Defense is actively involved in the fight against coronavirus - firstly, Russian military doctors from the radiation chemical and biological protection troops are operating in Italy and Serbia, helping these countries in the fight against coronavirus infection.
Regarding their capabilities in Russia, the Ministry of Defense is constructing 16 multifunctional prefabricated medical institutions of a new type. This is done in a short time with high quality and according to absolutely the latest standards.
In addition, the potential of the Ministry of Defense is large enough to interact with the Ministry of Health, therefore, in conditions where consolidation of state efforts in the fight against coronavirus is required, I think the Ministry of Defense will contribute to such work by coordinating and carrying out its activities with structures who are responsible for biological safety in Russia,” Korotchenko said.
Oleg Matveychev also agrees with him.
“Military doctors have already been involved, military hospitals have been deployed, in this sense the army is fully providing assistance. As for our doctors in general and how they work, at the moment they work better than anyone in the world. Given that Russia tests more than anyone else in the world in absolute numbers per capita, we are ahead of everyone. At the same time, we see that our mortality rate is also the lowest in the world for the number of cases - this suggests that our doctors, including the military, are the best in the world,” Matveychev said.
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