Nikita Krichevsky, an economist, publicist and public management expert, shared with Invest Foresight his opinion on Russia’s economic results in 2023 and anticipated developments in 2024 concerning the economy’s influence on the real world.
– Great guru John Maynard Keynes said that consumption is the end goal of any economic activity, and economic activity should be assessed only from the position of consumption.
While figures related to imports, exports, and GDP growth are very important and merit a thorough discussion from various perspectives, they still come second. The primary focal point is consumption, and what’s most important, it is growing in Russia.
What fuels this growth? Multiple factors contribute to it, such as increased parallel imports, expanding exports, a competent budget policy, and government policy in general. The state played a role by helping those who especially needed it in difficult times. Admittedly, the assistance may have been imperfect, but it was assistance nonetheless.
Let’s take preferential mortgage as an example. Do soaring food prices make a huge difference for a young family that living in their own home? They can handle it anyway. And a home is the most essential spiritual value for Russians. In Rus, building a home for newlyweds was a centuries-old tradition – and it always was a joint effort.
And we greatly appreciate the fact that so many families now have their own homes, something they couldn’t have imagined before. Sure, this is going to be difficult for them and they will have to work two or three jobs, their parents will help them, but this is not so important. Most essentially, they have their own apartment, their own home, and the opportunity to have children. This allows them to improve the quality of life. To be clear: not the living standard but the quality.
This is what really matters, and everything else comes second. We always receive less than we would like to have; it has always been the case and will continue to be so. And this is also natural as it ultimately leads to increasing your performance, or rather, utilizing your working abilities – which is also about economy. If you work one job and feel you are underpaid, just change your job or take an extra one, or go freelance and provide for yourself, working independently. Some 14 million people have already chosen this path.
Ultimately, the existing economic situation teaches people to be economically independent, in a good way. I think the situation is very good today. Remember the predictions that claimed the Russian economy would cease to exist by December? Just the opposite, not only does it exist but also advances. Certain people’s attempts to find inaudible explanations like ‘big country trap’ should remain on their conscience.
Another important economic aspect is that the country’s leadership has started attaching importance on Russian people’s character, on our mentality. Once again, speaking of traditional values – on the one hand, it is not always clear what is meant by this phrasing. Yet, it involves plenty of things, family being one of them. The fifth commandment says, “Honor your father and mother.” For now, sadly, this is just idle talk, I think. But I am willing to see this idle talk turn into specific and tangible actions this year.
As regards expectations for 2024, I would say we will be experiencing shocks just as before, although sporadically. This is natural not solely for our country but for any economy across the globe. Some countries will suffer inflation, some will see increase in wages; some will experience reducing export revenues, and some will face new sanctions and seize of foreign assets, while some will see efforts to step up deprivatization.
Naturally, we will see tougher discipline; this may manifest in any form, but it will occur in any case. We are proceeding smoothly along this path, and speaking of economy, entrepreneurs have yet to become aware that they will no longer get away with what they used to do. The recent spike in egg prices has been a vivid example, and I assume that those who raise prices will be stifled either by economic methods or through the use of force.
As regards deprivatization, currently there are 55 related cases under consideration by the Prosecutor General’s Office, and no-one knows how many will be launched next year. This is a key economic policy of restoring social justice. 84% of Russians speak in favor of a progressive tax, and over 90% support revising the outcome of privatization. People make demands – and people are the essential foundation of the state.