Russia needs to learn how to manage money

Vladimir Putin together with the leaders of other countries participating in the forum of "One belt and one road" which passes in China. The bubbling legacy of the bretton susaeta is a major event of epoch-making scale. I would compare the significance of this event since the bretton woods conference, which created the international monetary fund and the world bank. Because in our eyes, a new architecture of the global financial-economic relations. And it differs from the familiar world of liberalization in the us, where the same international monetary fund and the world bank, fulfilling a political order of american capital, break national borders, forcing all countries to remove border barriers to movement of capital.

Russia two decades came in the wake of liberal globalization the american way, after receiving the traditional underdeveloped countries the result: state the barriers are removed, international capital can freely walk around our territory. The foreign investment we particularly do not see, but no less than a trillion dollars of our capital flowed to the West. Occurred offshorization economy, today about half of the rights of ownership in the Russian industry belongs to non-residents. This offshorization and cosmopolitanization of our major businesses has led to the fact that Russia built the capitalism of the African type where the comprador oligarchy simply siphoning of the country's resources in order to live comfortably in the West. This is a hopeless model.

If you go on about the international monetary fund, we get the same result as all the other countries that fulfilled the recommendations of the monetary fund. Performed actually in the interests of transnational corporations, which in reality is entirely american, European and Japanese. And the source of their power is endless credit replenishment from the emission of the dollar, euro, yen. It's such a financial expansion, which gives them a huge competitive advantage. But, today, the world economic order has exhausted itself.

We see that the last eight years is pumping money into the system the entire economy, american corporations can get loans at 1-2% per annum to expand without limit, but it does not give the desired effect. Because of motivation to gain profits, and short-term capital concentrated in the financial sector. Pyramid of derivative securities, on which to recoup short-term, huge profits, absorbed almost the whole giant issue money, trillions of dollars, euros and yen. About one dollar, which falls in the real sector, where some $ five sucked like financial bubbles.

Just what the world habitually trades in dollars, the dollar is used as a safe haven currency, this mechanism continues to reproduce itself. Chinese pathb unlike russia, China goes its own way, this country leads the world in economic growth all of the last 25 years. The chinese model has become very attractive for developing countries, we see that this path went indoChina, the same model is generated in Indonesia, using elements of the chinese economic model taking the lead on the economic growth of India. The chinese model is a centralized long-term planning, the formation of the state priorities in order to maximize the growth of the national wealth. Here the criterion of economic policy is not to maximize the profits of the oligarchs and not some formal indicators, such as inflation or balance of payments, but the growth of people's welfare. It is a socialist market economy in which market mechanisms with state regulation, directed to the targets of production growth.

While great attention is paid to scientific and technical progress. The rate of growth of expenditure on r & d and increase the number of engineers China is in the lead for many years, today the army of chinese scientists and engineers is much higher than ours, and have already approached the american. China goes to the international monetary fund, the country operates exchange controls, the chinese ensure that the money emitted, were used to finance investment, modernization and growth of production. And we see the marvelous things that are completely incomprehensible to the Russian monetarists: in China the money supply has increased more than 50 times. Today the capitalization of the chinese economy is almost on par with the us, and the volume of production exceeded the us. How did you manage to achieve similar results? due to the manageable issue of money.

China was on its feet after the reforms of deng xiaoping, when he was deployed market-based mechanisms were removed ideological stereotypes. The market started to operate, to operate at increasing production volumes. They watched to competition in the market, because if there is no competition, then the market works in favor of monopolists. Beijing tightly controls the monopoly, the government provides cheap access to credit, long-term plans help businesses to navigate.

In fact, the share of the market sector in today's China than the share of the state. But monetary flows are controlled by the state in order to fuel private business. In russia, however, will notice the money is in the hands of the state banks. In principle, as in China, but there the state banks responsible for the credit growth to output growth, and banks are going after funding the growth plans of production in accordance with the general ideology of economic development.

This ideology makes all the officials, from village councils to the central committee of the communist party of China to work on the investment growth. They have, if you like, the idea of national economic growth — investment. So their rate of accumulation to 45% of gdp, twice more than us. And given the volume of chinese economy, the volume of investments much more than we do.

And it's all the result of deliberate management of the money supply. The soviet experience perinatality offer today, all states of the eurasian continent, Africa and latin america together to think about the long-term development plans in the general interest. The core of these plans is the financing of infrastructure projects. All states have an interest in modern cars, quality roads, high speed railway lines, aviation, sustainable energy supply. Beijing is already leading the piping, made the pakistani a railroad, establishes a direct transport corridor with Iran. When China offers to different countries of the world to unite in the task of development, it comes from its concept of building transport and energy arteries to the entire economic space to operate effectively.

Beijing, of course, interested in the fact that chinese goods are moved around the world. But he puts as a priority the profit, the chinese lend to the development of the infrastructure for this, and in order to ensure the presence of your business, along with the development of the economy of this region. A classic example is ethiopia. While chinese experts and investors did not come back, this country was a symbol of hunger and poverty.

Today ethiopia came in first place in the world in terms of economic growth, taking the chinese model as a model, and chinese investment went to infrastructure development. Earlier chinese experience took laos, after this country was the first in the world in terms of growth, today ethiopia. If the growth rate of the economy of laos was about 12% in ethiopia now is more than 13%. China offers a strategic, long-term concept of cooperation through joint investment projects. Something this model is similar to the soviet industrialization in other parts of the world. The ussr was engaged in that financed the construction of plants.

We were not trying to confiscate profits from Africa, from asia, where to invest the money. In the end of this process the Soviet Union ended its life cycle with assets of $ 140 billion worldwide. We had many countries, but we are unable to obtain money from them. Because at the time, in the framework of the concept of socialist construction, guided by the plan where there was no market at all, not particularly bothered on the subject of roi.

That is, he was just pleased that the factories in Africa and asia produced metal, is economic growth, and they follow the path of socialist orientation. Of course, not to say that it was pure subsidy. From these countries we also have received the goods, for example, dates from Libya and Egypt, or palm oil from the countries of indoChina. Existed with vietnam joint oil company "Vietsovpetro", which was, however, based on market principles. That is, in the framework of the model of planned socialism without the market the task was to make a material balance under these capital investments were cooperation, collaboration, and formed a common national economic complex, which encompassed a lot of countries, accounting for a third of the entire global economy.

It is believed that the collapse of the Soviet Union in economic terms was a foregone conclusion that we recognize the use of the dollar as the world payments system. China took into account the mistakes of the ussr. And set as one of the main principles of the requirement of return on investment. But again, they do not lay excessive profits, because thinking strategically long term. Unlike the american model, where the main short-term profits.

Therefore, the american economy became speculative. And China has invested in the economies of other states about a trillion dollars. So China creates a financial infrastructure under the "One belt and one road", following the common principles of bank lending. Beijing has established the asian infrastructure investment bank, silk road fund, brics bank is also focused on long-term investment. Why behind Russianladies Putin.