Google Cloud Speech-to-Text API (Chirp) + Gemini 2.5 Flash Non-Thinking. Treat it as a searchable index of what was broadcast, not a quotation record.
00:00:21We constantly hear talk that we need to mobilize
00:00:25the entire economy for war
00:00:29and so on.
00:00:48But Russia has caught the Dutch disease of wartime, Bloomberg writes. War drains resources from the civilian
00:00:51sector. Vladimir Putin signed a law on the disclosure of
00:00:55tax secrets to control prices. Will this
00:00:58stop price increases?
00:01:10For food, says Radio Free Europe, the TV channel Current Time shows, the program Face to the Event is on air, hello, dear viewers, well, for fairness, the already famous
00:01:14quote of Moscow Mayor Sergey Sobyanin was a little taken out of
00:01:17context, this is what the General Director of Tass Andrey
00:01:21Kondrashov asked him. You've probably heard
00:01:23such a thing, why in our time
00:01:27decorate bridges so beautifully with flowers? and
00:01:30initiate so many new infrastructure projects, although
00:01:34maybe it would be possible, on the contrary, to direct all these funds to help
00:01:38the army and slow down the development of
00:01:41the city, how to correctly prioritize, if
00:01:44you remember, before the New Year, memes about a beautiful Moscow reached
00:01:48a new level, like Moscow is such a Capitol with aperols on
00:01:51Patriks, whose residents have everything good and stable, despite
00:01:55everything, and the regions are barely surviving districts
00:01:59and... Sobyanin, credit where credit is due, skillfully shifted the conversation to the macro level, saying that it's not necessary to
00:02:02spend everything on war, otherwise the economy will die, flowers and jam
00:02:06festivals are also important, and there is something to add here:
00:02:10maintaining the illusion in Russia that in their lives, for
00:02:13Russian residents, nothing has changed, is becoming more expensive for the Russian authorities,
00:02:17is it any wonder that the federal budget deficit went into the red. But
00:02:21problems arise due to certain economic regularities. Bloomberg
00:02:24writes: Russia has caught the Dutch disease
00:02:27of wartime due to the redirection
00:02:31of most resources to the military sector. The Dutch disease, or
00:02:34Groningen syndrome, as it is also called, is a reference to the
00:02:37economic situation in the Netherlands in the mid-second
00:02:40half of the last century. In the 1950s, a large
00:02:44natural gas field (Groningen) was discovered there. Billions flowed into the country due to gas
00:02:47exports. The country became rich, but at the same time,
00:02:51factories began to close, production of goods decreased,
00:02:54unemployment and inflation rose. This is a paradox:
00:02:57it got worse, and then it got better. But, if you even think about it
00:03:01purely logically, why would you sew clothes, bake bread, kolobok,
00:03:04if employees and investors are fleeing to one specific sector of the economy,
00:03:08flee after them too, that's first, and second, the national currency
00:03:11is strengthening, your bread or cotton t-shirts
00:03:15are becoming more expensive abroad, no longer able to compete in
00:03:18exports. So, it sounds nice, the average salary
00:03:22in Russia, taking into account prices, exceeded salaries in Greece, Slovakia and Hungary
00:03:26in the center of the European Union. This publication of the agency just emphasizes it.
00:03:47They have to pay more, although labor productivity has not increased. Salaries are rising, yes, but at some point there will simply be no one to pay them, except for the Ministry of Defense, until they run out of money there. And according to a recent survey by the Russian Union of Industrialists and
00:03:51Entrepreneurs, 40% of large companies are ready for mass
00:03:54layoffs. My colleague Anton will tell you more.
00:03:58Russian authorities continue
00:04:01to report on production growth and high salaries, but behind
00:04:05the beautiful numbers lie expensive loans, people are cutting
00:04:08expenses, business revenues are falling, regional and
00:04:12federal budgets are facing a growing deficit, and some
00:04:16officials have even called for the final
00:04:19transfer of the economy to a military footing. Here, we must already
00:04:22switch to a military footing, deliver more powerful
00:04:26blows, strengthen. the entire economy for war
00:05:00and so on, but the modern economy is built
00:05:04differently, if there is no economy itself, no peaceful
00:05:08life, there will be no taxes, there will be no...
00:05:11construction continues here,
00:05:43new productions are opening, however,
00:05:45analysts call what is happening a variation of the Dutch disease
00:05:49in its military manifestation, writes Bloomberg. The civilian sector cannot
00:05:53work in such a mode indefinitely, when salaries grow
00:05:56faster than labor productivity, profits inevitably decrease,
00:06:00this is what we are seeing now. The state
00:06:03directs huge resources to the defense industry. The defense
00:06:07industry receives orders, hires people, raises salaries, but... At the same time,
00:06:11they pull workers from civilian industries, inflate
00:06:14labor costs without increasing productivity and constantly make civilian
00:06:18businesses less competitive. Increased
00:06:21payments for military contracts will force civilian employers
00:06:24to again raise salaries, which will again reduce the gap between military and
00:06:28civilian incomes. This strengthens the economic arguments for
00:06:32a new wave of mandatory mobilization. Meanwhile, large
00:06:35Russian businesses are cutting personnel costs. In July,
00:06:3940% of companies surveyed by the
00:06:42Russian Union of Industrialists and Entrepreneurs announced such
00:06:46plans. In a quarter, their share almost doubled.
00:06:4928% of them are considering staff reductions, and
00:06:53one in five are considering salary or benefits reductions.
00:06:56Reductions are already underway at Russian Railways, at OTB, VTB, Sberbank, and
00:07:00large industrial companies. Other enterprises are transferring
00:07:03employees to part-time work and sending them on unpaid
00:07:06leave. One should not underestimate this withdrawal
00:07:10of labor resources from the Russian economy. well, it's enormous: every year, the entire
00:07:14Sberbank, for example, with all its employees, from cleaners
00:07:17to the central office, is sent to Ukraine. From
00:07:21January to May, the economy grew by only 3%, and company
00:07:25profits, taking into account inflation, decreased by seven.
00:07:28The business activity index of the Russian Union of Industrialists and
00:07:31Entrepreneurs fell in July to its lowest level since 2022.
00:07:35And here a problem arises for the head of the Central Bank, Elvira
00:07:38Nabiullina. The Central Bank is not in a hurry to sharply reduce the key rate,
00:07:42as business demands for development, the department insists that if loans are made
00:07:45cheap too quickly, inflation could accelerate again. According to
00:07:49Bloomberg, Vladimir Putin is putting pressure on the Central Bank, demanding
00:07:53an accelerated rate cut. It is impossible to completely rule out
00:07:56the possibility of a rate hike.
00:07:59And we, we always say that we will pursue the
00:08:03policy that is necessary to return to
00:08:06low inflation, if suddenly circumstances change
00:08:10and... Well, first of all, it's even technically, I think,
00:08:43impossible, the people who say that understand nothing about economics,
00:08:47behind this is, I would even say, not some group
00:08:51of economists, yes, who understand something about how the
00:08:54economy works, behind this are some insane politicians,
00:08:58the author of the idea is, by the way, Mr. Patrushev, he even
00:09:02three years ago made a tour, you know, of the regions of Russia,
00:09:06gathered governors and local party assets, as they used to
00:09:09say. and said that it was necessary to develop plans for transferring the economy to
00:09:13mobilization rails, no one understands what that is, what is hidden
00:09:17behind it, and what it's even about, it sounds nice, oh, we'll
00:09:20mobilize, win and win and win, but what is it,
00:09:24to transfer a civilian industry enterprise to military equipment production
00:09:28is absolutely impossible, this is not the time of the Second World War, the Great
00:09:32Patriotic War, back then military equipment was much simpler,
00:09:35there were lathes everywhere, you could re-learn what to turn,
00:09:39now it's standing with... I don't know, mandatory military
00:10:12service, so, introduce a state minimum
00:10:15wage, so that no one protests and the state spends as little as possible
00:10:19on civilian life, well, it will actually do that, but this is, in general,
00:10:22of course, like... to return to requisitioning, to
00:10:55war communism, to destroy the country completely, that is, these are
00:10:58the worst enemies of Russia that one could ever imagine.
00:11:02And how do you generally view these rather unobvious, perhaps even
00:11:05consequences of the Dutch disease, about which Bloomberg writes?
00:11:09Well, it really is happening, the essence is that you mentioned the Groningen disease,
00:11:12this is a story about how, in general, a sector appeared where it is profitable
00:11:16to invest, all other sectors turn out to be
00:11:20not so profitable, money flows
00:11:23into the gas industry. All banks focus on the profitability of the gas
00:11:27industry and other projects turn out to be of no interest to anyone, in
00:11:31general, as a result, an economy emerges consisting of the gas industry
00:11:34and degraded other industries, well, this is approximately what
00:11:38is happening now in Russia, because money is flowing from the budget into
00:11:41the military industry, the civilian industry does not receive
00:11:44money, well, it receives less than it had
00:11:48before, look, before, foreign companies came to Russia,
00:11:51built factories, investors came and invested money,
00:13:55simply because the equipment is very old and exploded from old age, this
00:13:58will also happen, that is, in this sense, Russia has a very
00:14:01unpleasant prospect, not because I want to scare someone and somehow
00:14:04escalate the situation, but when you have old equipment, you cannot
00:14:08repair it, because there is no money for it, then this
00:14:11equipment does not work until it explodes or breaks down completely, this
00:14:15is what is happening in Russia now, that is, Russia is now, well, how can I say, eating up
00:14:19the remnants of the pre-war economy, while these remnants...
00:14:23are still there, it will somehow keep going, then they will run out, nothing new will
00:14:27appear, and the economy will start to shrink, you know, so that you
00:14:30understand what I'm talking about, I'll quote
00:14:33employees of the Central Bank of Russia, they wrote a very good report in
00:14:372022, then they still somehow, well, in general, they allowed themselves some
00:14:40liberties, they said that the future of Russia is reverse
00:14:44industrialization, what is reverse industrialization - it is
00:14:47a situation when the economy from 21st century technology and products
00:14:51returns to technologies. equipment, products of the 20th century,
00:14:55that is, to put it simply, technical regression,
00:14:58but the Central Bank wrote this because they understand that without cooperation with
00:15:02the world, without investments from the world, without new
00:15:05technological solutions, equipment coming from abroad, Russia is doomed
00:15:09to remain a very backward country that cannot create new
00:15:13equipment, cannot create new technologies, practically cannot create
00:15:16new products and can chew on the remnants of what was once
00:15:20created, what it somehow knows how to do, this is...
00:15:24not only the federal budget, but also
00:16:37a separate deficit for regional budgets, these are separate sums
00:16:41that need to be added up, these regional budgets, to somehow close
00:16:44the hole and somehow finance life in the territories, they
00:16:48start taking loans from banks, so lowering
00:16:51the key rate is a certain way for regional
00:16:54budgets to reduce costs, so the head of Yakutia came to ask
00:16:57President Putin for protection from the high interest rate on
00:17:01commercial bank loans, he said that it would be good if the Central Bank lowered the rate, then it would be
00:17:05cheaper to borrow from commercial banks to close
00:17:08holes, and the holes are big, look, such an unpleasant
00:17:12story is happening in Russia, people in the regions are being paid at the level of
00:17:15the minimum wage, yes, the
00:17:18minimum allowed wage rates, so
00:17:21failures are beginning in the provision of utility services,
00:17:25stories are already appearing where they stop taking out garbage from cities, yes,
00:17:29they start reducing city lighting at night and so on, but regional
00:17:32budgets have no money, and to borrow money at such rates, at
00:17:36which they give...
00:17:48under external management, who will be the external manager for Russian regions? Difficult
00:17:51question, the state budget, the state government, but it has
00:17:55no money to save the regions, so, well, this is a
00:17:58terrible topic, that's why the head of Yakutia came to ask the president
00:18:02for protection from the central bank, and the central bank, what is it doing? It is just trying
00:18:06to somehow suppress inflation.
00:18:37they issue new, sell new bonds, take the money they
00:18:41received from the bonds, pay off old obligations, this is what
00:18:44is called financial government, finances are very similar to a financial
00:18:47pyramid, strictly speaking, but it's very difficult for the regions, they have
00:18:51a very small tax base, it's very difficult for them to get money, they have
00:18:55no chance of ever paying off these loans, a situation will arise when
00:18:58they will either have to, in general, tell the banks: we won't pay you
00:19:02anything, then the banks will already be in trouble, or
00:19:05they simply won't be able to get any new...
00:19:37but expresses some concerns, although at the official level the indicators
00:19:41are quite modest, the desired indicators of 4% per year
00:19:44even less, and allegedly the economic bloc of
00:19:47the government is quite successful, at least that's what's declared, in moving towards
00:19:51them, and Vladimir Putin, at the same time, has signed a law that introduces
00:19:55a system for monitoring prices for food products along
00:19:59the entire chain of their movement, that is, from the producer to
00:20:01the store, to the final consumer, to the shelf, as it were, in
00:20:05supermarkets, last year in...
00:20:16starting from 2027, food prices in Russia will be monitored
00:20:20along the entire supply chain. This week,
00:20:23the corresponding law was signed by Vladimir Putin. The authors of the document
00:20:27hope that this will potentially allow them to identify
00:20:30sharp price increases, analyze their causes, and suppress collusion
00:20:34among sellers. Will the law fundamentally solve the problem?
00:20:50for certain products, this can be expected only if the authorities
00:20:53establish that there are no real grounds for inflationary
00:20:56expectations, to apply sanctions to manufacturers or sellers of
00:21:00relevant goods. The law does not directly regulate food
00:21:03prices, however, now the federal tax service will be able to transfer
00:21:07data on sellers, suppliers, transactions
00:21:11and prices to other agencies. Tax secrecy does not become public, but the exchange of
00:21:14sensitive information and increased state intervention in the trade
00:21:18sector causes concern among businesses.
00:21:22A year ago, officials from the Ministry of Industry and Trade and the Ministry of Agriculture argued whether
00:21:26to establish a fixed price range or to force
00:21:29retailers to sell almost all specific products under
00:21:32long-term contracts with fixed prices, and although
00:21:35the new law is far from last year's radical proposals, it
00:21:39creates a basis for possible development of more active regulatory
00:21:42measures in the future. Disputes over prices for many products and
00:21:46their exceeding the official inflation rate intensified
00:21:50during the full-scale war against Ukraine. Russian
00:21:53officials publicly try to avoid talking about all the reasons for
00:21:57price increases, mostly shifting the blame to
00:22:00manufacturers. Over the past 4 years, Russians have
00:22:03faced a sharp increase in the price of eggs, potatoes, butter
00:22:07and cucumbers. Over the past week, according to Rosstat, chicken
00:22:11and buckwheat have sharply increased in price. In total, prices for them
00:22:14have already risen by 10.7%
00:22:17respectively since the beginning of the year, outpacing official inflation. Analysts
00:22:20from the consulting agency MMA, cited by the Moscow
00:22:23Times, call the situation alarming, along with
00:22:27sugar, which has risen by 1.2% in
00:22:30a week, by 21.2%
00:22:34since the beginning of the year. Well, you remember these two ideas, a year
00:22:38ago from the Ministry of Industry and Trade and the Ministry of Agriculture, business rated them as bad,
00:22:41very bad, I think in a comment to Forbes on condition of anonymity, this
00:22:44happened. We will continue the topic with economist Igor Lipsits. Igor, what
00:22:48in practice can this mean? The new law on controlling all links in the supply
00:22:52chain, and how do you think this can work in principle?
00:22:56Well, the thing is, if you are interested in the tax code of the Russian
00:22:59Federation, you know that there is, in principle, a method of calculating
00:23:02prices, which is called method number one, cost-based, and you can
00:23:06calculate prices that can be considered correct from the point of view that
00:23:10it relies on costs and includes a certain usual profit margin for
00:23:14a given area, that is, in fact, everything you are talking about, everything that has been adopted
00:23:17by the government and the State Duma, is some...
00:23:40so that no one overcharges, so that everyone sells at the minimum profit margin, then let them survive as they wish, but this will naturally end in
00:23:44business bankruptcy, this is practically the complete destruction
00:23:47of the market mechanism, because the market mechanism...
00:23:53as indicators of the correctness and profitability of actions, if the price is profitable, then I produce,
00:23:57if the price is low and there is no profit, I do nothing, if all this is
00:24:00destroyed, which the government of Russia and the State Duma are trying to do, then the entire
00:24:04market economy of Russia must die, Russia must return to
00:24:07the Soviet Union with a planned-command economy, state production
00:24:11plans and state coordination, after which total deficit will come,
00:24:15queues for everything, this is approximately the future of Russia,
00:24:18well, this is not me... and this is created by the government and the State Duma, but are there any
00:24:22alternatives for agricultural producers? They also have a fuel
00:24:25crisis in addition to that, but at the same time,
00:24:28exports, something else like that, they have a very big, now the biggest
00:24:32problem that is coming in Russia, this is, by the way, the crisis of agriculture,
00:24:35in this, this is a very long conversation, but this year there is a very big
00:24:39problem, if they still squeeze prices, then there is a lot
00:24:43of things, by the way, the Russian government terribly unsuccessfully regulates agriculture,
00:24:46very actively robs agriculture, farmers.
00:24:50producers, they complain about it, but the state is so
00:24:53eager to take money from anyone it can, that it drives agriculture
00:24:57into trouble, you can't even predict, all this
00:25:00will happen, simply food shortages will arise in Russia, because
00:25:03this year we are already seeing such an unpleasant situation due to the war, which will be
00:25:07fraught with a reduction in sown areas, bankruptcy of many
00:25:11companies, and then there is also state regulation of food prices under
00:25:14the pretext of protecting the interests of workers, but you will protect workers
00:25:17in the city, farmers will die out. They will leave the village,
00:25:21close farms, sell land, no one else will produce,
00:25:24this is what the Russian government doesn't even want to think about, but this
00:25:28is a reality that today hangs like a black cloud on Russia's
00:25:31horizon, do I understand correctly that it is precisely because
00:25:35of the heaviest blow that has fallen on agricultural producers
00:25:37right now, for this reason prices for certain
00:25:41products are growing very much faster than official
00:25:44inflation indicates, yes chicken is growing precisely
00:25:48because costs are growing.
00:26:02acknowledges that the price increase is justified, then the price will increase, this
00:26:06practically creates an excellent basis for obtaining a large amount
00:26:09of bribes for approving correct prices in various trade and food
00:26:13industries. Well, speaking of the misfortunes of
00:26:16agricultural producers, the fuss around the fuel crisis has somehow died down, well, it's clear
00:26:20that at first there was shock, many videos on social networks with queues at gas stations and so
00:26:23on, but how do you assess its scale in Russia now and its main
00:26:27consequences, again, Russia is big, to Moscow
00:26:31and St. Petersburg they drove fuel trucks,
00:26:34yes, fuel trucks that brought gasoline, in the
00:26:37regions the situation is not so beautiful, and as soon as another
00:26:41drone arrives, rationing, reserving, and
00:26:43limiting of fuel immediately occurs again, and this will continue, because who told
00:26:47you that new drones will not arrive, the war is not over, Putin is not ending
00:26:51the war, which means, accordingly, who told you that attacks on oil refineries will stop, that is, it's
00:26:55a temporary respite, but it's not a fundamental solution to problems,
00:26:58well, I assume that if there is no money even for the restoration of already
00:27:01damaged infrastructure, then there is even less money
00:27:05for creating means of combat, since the authorities have partially
00:27:08delegated this to the companies themselves, to those who can afford it, at least,
00:27:12well, you mentioned that they at least hinted that in principle, state control of prices, as
00:27:16in the old days, is not excluded in the future, how far do you think we are from this point,
00:27:19well, let's not talk about the timeline, not about time, but rather
00:27:23to avoid such direct predictions, but about
00:27:27feelings, what other events can happen before we
00:27:30reach exactly this point with... actual state control, well,
00:27:34this will again largely depend on what will happen
00:27:37in agriculture now, now there will be a very unpleasant
00:27:41story, it will be two-stage, now there will be some kind of
00:27:44attempt by agricultural producers to lower
00:27:47prices, to sell something at least, because don't forget that
00:27:50Russia also has very seriously hampered exports of
00:27:53agricultural products, so there is nowhere to put them, there is an oversupply
00:27:56of products, an oversupply of products leads to falling prices, well, and
00:28:00we rejoice, but...
00:28:02prices for products are falling, how great, only the next step will follow:
00:28:06bankruptcy of agricultural companies, reduction of
00:28:09sown areas, liquidation of farms and reduction of supply,
00:28:13then the question arises, if agricultural products are not allowed to be sold, what
00:28:17to do? then they must be imported, then everything is expensive, then we introduce
00:28:21state regulation of prices, a situation of food
00:28:24shortages arises, rationing, food rations,
00:28:28cards arise, queues for food arise, and this
00:28:31is not very far away, it depends on what happens this autumn
00:28:34with agriculture, so already by spring there may be very
00:28:38unpleasant stories, precisely in the field of food supply in
00:28:41Russia. Igor, thank you very much for this conversation, for the detailed
00:28:44analysis of all the latest news. Economist Igor Lipsits was with us live
00:28:48today. Well, in fact, we talked about the consequences of the war for the Russian
00:28:52economy, taking into account all the latest
00:28:55events influencing what is happening in Russia right now. We will tell you about new events
00:28:59on Monday at the same time. Goodbye and be with you.
00:29:40is written in the Constitution of the Russian Federation, and how the Russian authorities
00:29:44comply with the basic law of the country, what else this week in
00:29:47Russia human rights activists, lawyers and civil
00:29:50activists are discussing. We will tell you in the program "Man has
00:30:43a month and a half, and it's hard to say how much
00:30:47the city has changed during this time, firstly, these dragon's teeth have appeared
00:30:51almost everywhere on the streets, and secondly,
00:30:55in many places this jagaza has appeared here, it's
00:30:59just intertwined.