There Is No Point in Defeating Ukraine Without Offering It an Attractive Future

NEW – July 14, 2022

To win, Russia must present to the population of the liberated territories of the former Ukraine, not to mention its own citizens, an attractive image of the future it is creating, a new economic model combining the two main needs of the era: justice and development.

Without a demonstration of a new society accessible to everyone, free from oligarchs and frenzy, opening wide and diverse prospects to all who are able to accept its rules, a military victory will be temporary, since people will run away from it (physically or mentally) into any other myths, from Western to Chinese and Indian, regardless of the degree their realism.

After all, the fight in the information age — and this is its meaning — is not for the territory as such, but for the souls of people living on it or at least sometimes remembering it: it is possible to take the earth without these souls in an information society only for a short time.

What should Russia do to become needed by its own and others, to inspire them with the realisation of an eternal dream in new conditions?

First of all, it’s necessary to be honest. This is not something that is unpleasant, but simply incomprehensible for the current ruling party, still living on the principle of “we record two, while the third is offshore” — but it is necessary. The authorities of the whole world (except China and India) have said that words are only suitable for wind power, while people will believe only deeds.

If we are seriously going to develop Russia, to be honest means to close the channels for withdrawing money from it (and not to push them out by all possible means, as now), prohibit dual citizenship (because there can only be one loyalty) and allow only those who permanently live there to have accounts abroad.

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Being honest means at least trying to become a state governed by the rule of law. In particular, to close the cash-out industry, limiting its scale, say, 50,000 rubles per day per person. After all, everyone understands that the cashing out industry is an industry of ensuring tax evasion, making their payment a misunderstanding at best.

Offshore companies should be banned as instruments for withdrawing both money and assets from the country. All assets registered in offshore companies must be taken by the state under its management, and if the owners refuse to quickly re-register them in the country, they will be confiscated as ownerless property.

A good step towards honesty is the implementation of one’s own laws. If they are too complicated for the bureaucracy that gave birth to them, one can start with the Constitution, which guarantees citizens of the Russian Federation the “right to life” — that is, at least a real living wage. From the point of view of the economy, it is a powerful support for demand, triggering the development of the whole country, but for neighbours and their citizens, first of all, it is a symbol of the state’s rejection of the policy of extorting its own population under the pretexts of varying degrees of insanity.

Of course, in order for monopolies not to use this for a new round of overpricing, their arbitrariness should be curbed by antimonopoly regulation. But the most reasonable thing in the light of the recent ultimatum of the oligarchs (and its punctual execution by the ruling bureaucracy) is to nationalise the basic sectors of the economy that provide the bulk of material costs for a nationwide price reduction.

Raw materials industries and infrastructure (including banking) should work for development, that is, to ensure the maximum reduction in the price of their products (of course, not at the expense of reliability). And their activities in the interests of society can be directed only by the owner acting in his interests, that is, not by an oligarch of some degree of savagery, but by the state transformed by a new task.

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Development requires cheap public credit. Taking into account the 5% return on assets of the manufacturing industry, the available loan is 2% per annum, which requires a zero interest rate of the Bank of Russia. Of course, in order for cheap money not to leave the real sector for financial speculation, the latter should be strictly limited (such a restriction at our level of maturity of the financial system is a condition for the success of all major economies: those who provided it, like the US, Europe, Japan and China, became developed, who could not, like Latin America and Africa, plunged into a bad infinity of degradation).

Industry and technology can gain space only thanks to the customs policy: the export of raw materials should be limited (for example, the abolition of VAT refunds and the introduction of duties), and the export of finished products should be stimulated in every possible way. With regard to imports, the opposite is true: it is necessary to stimulate the import of raw materials and limit the import of finished products (of course, only those that we produce). The general principle is tariff escalation: the higher the value added in exports, the more the state should stimulate it, the higher in imports, the more it should suppress it.

In general, the share of imports in the market should be limited to 10% according to the Swiss example. Of course, the import of products that we do not have should be supported, but production should be developed by a system of tariff quotas, which, under the leadership of Yu. D. Maslyukov, our poultry farming was restored in the early noughties. The principle is simple: the part of national demand that is not covered by the plans of national producers is imported freely within the framework of tariff quotas that decrease every year (as Russian production grows). Imports in excess of them, competing with Russian production, should be subject to high duties: from robber countries stealing our assets and imposing sanctions against us – 80%, from the rest — 40%.

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Finally, the tax system should be reoriented from the tasks of plundering the country and encouraging financial speculation to the tasks of reviving Russia.

VAT will have to be reduced to at least 10% (the cost of criminal operations to evade it), the “tax manoeuvre” blocking the production of added value (which made oil refining unprofitable and raised prices for ferrous metals in the domestic market) — cancel, introduce progressive taxation of citizens’ incomes (0% to two subsistence minimums and 25% of 1 million rubles per month).

Accumulated doubtful wealth should be taxed on the basis of the Swiss principle of imputed income: since no more than a quarter of income is generally spent on the maintenance of large property, it is the imputed minimum calculated on the basis of the property that should be taxed (if, of course, it is higher than the declared one).

This makes it possible to mitigate social tensions and ensure joint tax liability of the whole society, strengthening its unity and morality.

The implementation of the described program/measures, it seems, will ensure a deep creative transformation of our Motherland in the first year.

Mikhail Delyagin

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