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.
00:00:24we constantly hear talk that we need to mobilize
00:00:28everything. The entire economy for war,
00:00:31unfold and so on, but the modern economy is built
00:00:35differently. Moscow Mayor Sergey Sobyanin is against military
00:00:38mobilization of the economy. To kill a normal economy is to kill
00:00:42the country altogether. Therefore, these are such unnecessary, worthless
00:00:46talks. But Russia has caught the Dutch disease of
00:00:49wartime - Bloomberg writes. War drains
00:00:53resources from the civilian sector. Vladimir
00:00:56Putin signed a law on the disclosure of tax secrets for control.
00:01:30to beautifully decorate bridges with flowers and
00:01:34to initiate so many new infrastructure projects, although perhaps it would be possible
00:01:37to direct all these funds to help
00:01:40the army and slow down the development
00:01:44of the city, how to properly prioritize, if you remember,
00:01:48before the New Year, memes about the beautified Moscow reached a new level,
00:01:52as if Moscow is such a capitol, with aperitifs on Patriarch Ponds, where residents
00:01:55have everything good and stable, despite everything, and the regions
00:01:59are barely surviving districts, and Sergey
00:02:02Sobyanin, credit where credit is due, skillfully shifted the conversation to a macro level,
00:02:06as if there's no need to spend everything on war, otherwise the economy will die,
00:02:09flowers and jam festivals are also important, and here
00:02:13there is something to add: maintaining the illusion in Russia that
00:02:17nothing has changed in the lives of Russian residents is becoming more expensive for
00:02:20the Russian authorities, no wonder the federal budget deficit went into
00:02:24the red, but problems arise due to certain economic
00:02:27patterns, the Bloomberg publication states that
00:02:30Russia has caught the Dutch disease of wartime due to
00:02:33the transfer of most resources to the military sector. The Dutch
00:02:37disease or Groningen syndrome, as it is also called, is a reference to
00:02:40the economic situation in the Netherlands in the mid-second
00:02:43half of the last century. In the 1950s, a large
00:02:47natural gas field was discovered there - the Groningen field. Billions flowed into the country
00:02:50from gas exports. The country became rich, but at the same time,
00:02:54factories began to close, goods production decreased,
00:02:57unemployment and inflation increased. Paradoxically,
00:03:00things got worse, and then they got better, but if you even reason logically,
00:03:04why would you sew clothes, bake bread, Kolobok,
00:03:07if employees and investors are fleeing to one specific sector of the economy,
00:03:11you should follow them too. This is first of all. Secondly, the national currency
00:03:14is strengthening, your bread or cotton t-shirts
00:03:18are becoming more expensive abroad and can no longer compete in
00:03:21exports. So it sounds good: the average salary
00:03:25in Russia, taking into account prices, exceeded salaries in Greece, Slovakia, and Hungary
00:03:28in the center of the European Union. This publication from the agency, as it happens,
00:03:32drew from the material, from the latest Bloomberg material, but
00:03:36the reallocation of scarce labor to the front, to the military-industrial
00:03:39complex, hits other entrepreneurs. They have to
00:03:42pay more, even though labor productivity has not increased.
00:03:46Salaries are growing, yes, but at some point there will simply be no one to pay them, except
00:03:50the Ministry of Defense, while they still have money. And according to a fresh survey
00:03:54by the Russian Union of Industrialists and Entrepreneurs, 40%
00:03:57of large companies are ready for mass layoffs. My colleague Anton
00:04:01Sergienko will tell us more.
00:04:04Russian authorities continue to report on production growth and
00:04:07high salaries, but behind the beautiful numbers lie expensive
00:04:11loans. People are cutting expenses, business income
00:04:15is decreasing. Regional and federal budgets are facing
00:04:18a growing deficit, and some officials have even started
00:04:22calling for a complete transfer of the economy to a war
00:04:25footing. Here, we must already go on a war footing,
00:04:29to inflict more powerful
00:04:32strikes, to intensify the massiveness of strikes on
00:04:36enemy territory, so that they understand that
00:04:39this matter does not go unpunished, and to
00:04:42identify where drones are flying from over our
00:04:45territory, in order to minimize the drone
00:04:48threat. In a recent interview with TASS, the Mayor of Moscow Sergei Sobyanin
00:04:51emphasized that these talks are worthless, and
00:04:54people making such statements do not understand economics. We
00:04:58constantly hear talks about the need to mobilize
00:05:02the entire economy for war,
00:05:05deploy it and so on, but the modern economy is built
00:05:08differently, if there is no peaceful economy itself.
00:05:26there will be no taxes, no income for the population, the political situation will be completely different, then we will not achieve success in the war, to kill life, to kill a normal economy, is to kill the country altogether, so
00:05:30such useless, worthless talks, which are said by
00:05:34people who do not understand how modern economy,
00:05:37modern war works. The mayor of Moscow urges not to believe talks of
00:05:41a crisis. For now, the capital indeed looks quite
00:05:44prosperous, construction continues here, new
00:05:48productions are opening, however analysts call what is happening
00:05:52a variety of the Dutch disease in its military manifestation, Bloomberg
00:05:56writes. The civilian sector cannot operate in such a mode
00:05:59indefinitely, when salaries grow faster than labor productivity,
00:06:03profit inevitably decreases. This is exactly what we are
00:06:06seeing now. The state directs huge resources to
00:06:09the defense industry. The defense industry receives orders, hires people,
00:06:13raises salaries, but with this they draw workers from
00:06:17civilian industries, drive up the cost of labor without increasing productivity
00:06:21and constantly make civilian businesses less
00:06:24competitive. Increased payments on military contracts will force
00:06:27civilian employers to again raise salaries, which will again
00:06:31reduce the gap between military and civilian incomes. This
00:06:34reinforces the economic arguments in favor of a new wave of mandatory
00:06:38mobilization. Meanwhile, large Russian businesses are cutting expenses
00:06:42on... In July, 40% of companies surveyed
00:06:45by the Russian Union of Industrialists and Entrepreneurs reported such
00:06:49plans: their share almost doubled in a quarter,
00:06:5228% of them are considering staff reductions, and
00:06:55every fifth - a decrease in salaries or social package.
00:06:59Reductions are already underway at Russian Railways, VTB, VEB, Sberbank, and
00:07:03large industrial companies. Other enterprises
00:07:06are transferring employees to part-time employment and sending them on
00:07:08unpaid leave. Do not underestimate this.
00:07:12The withdrawal of labor resources from the Russian economy is
00:07:15gigantic. In a year, the entire Sberbank, with all its
00:07:19employees, from cleaners to the central apparatus, is sent to
00:07:22Ukraine. From January to May, the economy grew by only
00:07:263%, and company profits, adjusted for inflation, decreased
00:07:30by seven. The business activity index of the Russian Union of
00:07:33Industrialists and Entrepreneurs in July fell to its lowest since
00:07:372022. And here a problem arises for the head of
00:07:40the Central Bank, Elvira Nabiullina. The Central Bank is not rushing to sharply lower
00:07:44the key rate, as business demands for development. The
00:07:48department insists that if loans are made cheap too quickly,
00:07:51inflation could accelerate again. According to Bloomberg,
00:07:54Vladimir Putin is pressuring the Central Bank, demanding
00:07:57an accelerated reduction of the rate. It is impossible
00:08:00to completely rule out a rate hike.
00:08:04And we, we always talk about it, we will pursue the policy
00:08:08that is necessary to return to low
00:08:11inflation. If suddenly circumstances change
00:08:15and require it, then we are ready to raise the rate to the level
00:08:18that is necessary for this. There is a war economy in the country, the question is
00:08:22how much of the civilian economy it will be able to displace before it starts
00:08:26slowing down the entire country. And with
00:08:29us live is economist Igor Lipsits. Igor, hello.
00:08:33Good afternoon, hello. Well, given the already completed transfer
00:08:35of resources to the military-industrial complex to the front, how far, in your
00:08:39opinion, are we from that very military mobilization of the economy, which Mr.
00:08:42Sobyanin is afraid of, or perhaps there are no resources
00:08:45for that anymore? Well, firstly, it's even technically, I think,
00:08:48impossible. People who say that understand nothing about economics.
00:08:52Behind this, I would even say, is not some
00:08:55group of economists, at least, who understand something about how
00:08:59the economy works. Behind this are some insane
00:09:02politicians. The author of the idea is, by the way, Mr.
00:09:05Patrushev. Three years ago, he made
00:09:08a tour, you know, of Russian regions, gathered governors and
00:09:12local party activists, as they used to say, and said that it was necessary
00:09:16to develop plans for transferring the economy to a mobilization footing. No one
00:09:19understands what this is, what is hidden behind it, what it's all
00:09:23about. It sounds beautiful, oh, we will mobilize and win
00:09:27and win and win, but what is it, to convert a civilian industrial
00:09:30enterprise to military equipment production is absolutely impossible. These are not
00:09:34the times of the Second World War, the Great Patriotic War. At that time, military
00:09:38equipment was much simpler, there were lathes everywhere.
00:10:44famine, it ended in disaster, even Lenin backed down, as you
00:10:47remember, launched a new economic policy to somehow
00:10:51save the country from extinction, well these current ones...
00:11:25money flows into the gas industry, all banks are focused
00:11:29on the profitability of the gas industry, other projects turn out to be of no
00:11:33interest to anyone, in general, as a result, an economy emerges,
00:11:36consisting of the gas industry and degraded other
00:11:39sectors, well, now this is happening in Russia, because
00:11:42money goes from the budget to the military industry, the civilian
00:11:46industry does not receive money, well, it receives
00:11:49less than it had before. Look, previously foreign companies
00:11:52came to Russia, built... investors came
00:11:55foreign companies have mostly left who invested money to Russia,
00:11:57profit from the profitability of Russian companies. Now
00:12:03they don't invest anything, they don't build anything, they don't
00:12:06produce anything. This means foreign investors have fled Russia because
00:12:09no one wants to deal with a toxic country where you can
00:12:13easily fall under sanctions and lose everything. Therefore, the civilian
00:12:16economy of Russia does not have budget support and does not have
00:12:20other money. As a result, it has fallen into a situation where there is no money,
00:12:23it is shrinking. Across the economy, people
00:12:26are closing investment plans and saying: until better
00:12:29times. When these times come, who knows, when
00:12:33the president says when the war ends, when everything
00:12:35normalizes, yes, but at the same time, President Putin, as you remember, always
00:12:39says that war is the new normality for Russia,
00:12:42we will fight to the victorious end, until all of Russia is ruined and
00:12:46perishes, well, probably so. Apropos
00:12:49of investment cuts until better times, besides investment cuts, there are also
00:12:53at least planned large-scale cuts. Here I again refer to this
00:12:56fresh survey by the Russian Union of Industrialists and Entrepreneurs. What, in your
00:13:00observation, is actually happening there in practice, and how
00:13:04alarming is this symptom in itself? Well,
00:13:06look, well, for example, one of the simple questions is, will we repair
00:13:10the oil refineries or not? Well, they are burning, they need to be repaired.
00:13:13A simple question arises: replacing oil refinery equipment is
00:13:17pure investment, but the question is, does it make sense to
00:13:20do it if you just replace it, and then a new drone will immediately fly in and burn it again?
00:13:25Therefore, now oil companies to a significant extent imitate
00:13:28the repair of oil refineries, pretend that they are repairing them, but in fact they do not
00:13:32repair them in full, because, firstly, it is very expensive, and secondly, there is no
00:13:35guarantee that it will work for at least several years and pay off in any way,
00:13:39therefore, now Russian companies, they generally cut
00:13:42investment costs, now they will massively lay off people, this is also
00:13:45the next step, well, and then there will be an economic contraction and
00:13:48technical degradation, and after technical degradation will come a wave of
00:13:52man-made accidents,
00:14:25to a military economy, while these remnants still exist, it will somehow
00:14:29turn, then they will run out, nothing new will appear, and
00:14:32the economy will begin to shrink, you know, so that you understand what I'm talking about, I'll
00:14:36quote employees of the Central Bank of Russia, in
00:14:402022 they wrote a good report, back then they still somehow,
00:14:43well, in general, they allowed themselves some freedom, they said that
00:14:47the future of Russia is reverse industrialization,
00:14:50what is reverse industrialization, it is a situation where the economy
00:14:54from technology...
00:15:25was created, that it somehow knows how to do this, this technological
00:15:28degradation and movement into the past, this, unfortunately, is the future of
00:15:31the Russian economy, and not only because I say so, but because
00:15:35many Russian economists also see it this way, including experts from
00:15:39the Central Bank of Russia. Well, by the way, speaking of the Central Bank's liberties, which you
00:15:43mentioned, there's a separate story with the key rate, with Putin's possible pressure on
00:15:46Nabiullina, well, possibly, because after all, these are Bloomberg agency
00:15:50sources, although, well, in the public sphere, some, well, let's say, some
00:15:53digs from Putin we also observed recently. What do you think, if all
00:15:57this is true, especially what remains behind the scenes, why did Putin
00:16:00heed, it turns out, the complaints of big business, and what awaits
00:16:04the Central Bank in this case, a complete loss of autonomy? It's
00:16:07not about big business, look, Ivan, it's about something completely different, look, who did
00:16:11he tell, for example, that the Central Bank would lower the rate? Usually, he never
00:16:15did that, he didn't predict rate movements. Here, even before
00:16:18the Central Bank meeting, he said that the rate would be lowered. But who did he
00:16:22tell this to? He didn't tell it in a conversation with the captains of Russian
00:16:25business, no, he met with the head of Yakutia, and told him that yes,
00:16:29we will lower the rate. Why is this happening? Let me explain,
00:16:32because the budgets of Russian regions are in a very large financial
00:16:36trouble, they don't have money, they have huge deficits, that is,
00:16:39deficits not only in the federal budget, but also separate
00:16:42deficits in regional budgets, these are separate amounts that need
00:16:46to be added up. These regional budgets, in order to somehow close
00:16:49the hole and somehow finance life in the territories, they
00:16:53start taking loans from banks, so lowering
00:16:56the key rate is a way for regional
00:16:58budgets to cut costs, so the head of Yakutia came to ask
00:17:02President Putin for protection from high interest rates on
00:17:06commercial bank loans, and said that the Central Bank should lower the rate, then it would be
00:17:10cheaper to borrow from commercial banks to close holes, and the holes
00:17:13are big, look, in Russia there is such an unpleasant story: people in
00:17:17the regions are being transferred to payment at the minimum wage level, yes,
00:17:21the minimum allowed rates of remuneration, so
00:17:24- failures begin in the provision of utility services, stories already
00:17:28appear when they stop collecting garbage from cities, yes,
00:17:32they start cutting back on night lighting in cities and so on,
00:17:35but regional budgets have no money, and
00:19:08or they simply won't be able to get any new loan, last
00:19:11year they still gave, this year they don't, then what do you do, you have nothing
00:19:15to pay utility services for garbage collection, for street
00:19:19cleaning, for city lighting, for organizing
00:19:22public transport movement in the city, a communal
00:19:25catastrophe begins, that's what expensive commercial bank
00:19:28loans mean, well, and one cannot but say that, well, one cannot even say
00:19:32that inflation probably doesn't concern the Russian authorities, still, at the official level
00:19:35some comments on this matter exist, and Vladimir
00:19:38Putin, let's say, cautiously, but expresses some concerns, although
00:19:42at the official level, the indicators are quite modest, the desired
00:19:46indicators are 4% per year, or even less, and
00:19:48allegedly the economic block of the government is quite successful, at
00:19:52least it is declared to be, in moving towards them, and Vladimir Putin, at the same
00:19:56time, signed a law that introduces a system for monitoring
00:19:59prices for food products along the entire chain of their movement, that is, from
00:20:03the producer to the store, to the final consumer, right to the
00:20:07shelf, as it were, in supermarkets. Last year, the government proposed even
00:20:11more serious measures, up to price control. We also want to remind
00:20:14you of this and will tell you about the new
00:20:18document adopted in our report. From 2027,
00:20:21food prices in Russia will be monitored along the entire supply
00:20:24chain. This week, the corresponding law was signed by
00:20:28Vladimir Putin. The authors of the document hope that this
00:20:31will potentially allow them to identify sharp price increases, analyze their
00:20:35causes, and suppress collusion among sellers. "Will the law
00:20:38fundamentally solve the problem of inflation against the backdrop of the ongoing war, and is it not
00:20:42becoming a new attempt by the state to tighten control over
00:20:46the market? The question is open. The measure will definitely contribute to slowing
00:20:50consumer inflation. As for price reductions on certain
00:20:53products, this can only be expected if the authorities determine that there are no real
00:20:57grounds for inflationary expectations, and apply sanctions to
00:21:01manufacturers or sellers of the respective goods. The law
00:21:04does not directly regulate food prices, however, now
00:21:08the Federal Tax Service will be able to transfer data on
00:21:12sellers, suppliers, transactions, and prices to other departments. Tax secrecy does
00:21:15not become public, but the exchange of sensitive information
00:21:19intensifies. The state's intervention in the trade sector causes
00:21:22additional concern among businesses. A year ago,
00:21:25officials from the Ministry of Industry and Trade and the Ministry of Agriculture debated whether
00:21:29to set fixed price ranges or force
00:21:32retailers to sell almost all specific products under
00:21:35long-term contracts with fixed prices, and although
00:21:38the new law is far from last year's radical proposals, it
00:21:42creates a basis for the possible development of more active regulatory
00:21:45measures in the future. Disputes about prices for many products and
00:21:49their exceeding official inflation have intensified
00:21:53during the full-scale war against Ukraine. Russian
00:21:56officials publicly try to avoid talking about all
00:21:59the reasons for price increases, mainly blaming
00:22:03manufacturers. Over the past 4 years, Russians have
00:22:06faced sharp increases in the prices of eggs, potatoes, butter,
00:22:10and cucumbers. In the last week, according to Rosstat,
00:22:13chicken and buckwheat have sharply risen in price. In total, prices for them since
00:22:17the beginning of the year have already increased by 10.7%,
00:22:20respectively, outstripping official inflation. Analysts from
00:22:23the consulting agency MMA, quoted by the
00:22:26Moscow Times, call the situation frightening,
00:22:29along with sugar, which rose by 1.2%
00:22:33in a week and by 21.2%
00:22:37since the beginning of the year. Well, remember those two ideas from a year
00:22:40ago from the Ministry of Industry and Trade and the Ministry of Agriculture, business assessed them as bad,
00:22:44very bad, I think, in a Forbes comment on condition of anonymity, this
00:22:47happened. We will continue the topic with economist Igor, what
00:22:51in practice can this new law on controlling all links in the supply
00:22:55chain mean, and how, in your opinion, can this generally work?
00:22:58Well, the thing is, if you look into the Tax Code of the Russian
00:23:02Federation, you will find that there is a pricing method called method
00:23:05number one, cost-based, and you can calculate prices that can be considered
00:23:09correct from the point of view that they are based on costs and include
00:23:13a certain normal profit margin for a given sphere, that is, in fact, everything
00:23:16you are talking about is all...
00:24:04if the price is low and there is no profit, I do nothing, if all this is destroyed, what the Russian government and the State Duma are trying to do, then the entire market economy of Russia must die, Russia must return to the Soviet Union's
00:24:07planned-command economy, with state production plans and state
00:24:11coordination, after which total shortages and queues for
00:24:15everything will come. All this.
00:24:18всё про всё это.
00:24:30but at the same time, exports and something similar, they have
00:24:33a very big problem now, the biggest problem that we have in
00:24:36Russia, this is, by the way, the crisis of agriculture, this is a very long
00:24:40conversation, but this year it's a very big problem, if prices are further squeezed,
00:24:43then there's a lot of things, by the way, the Russian government
00:24:47regulates agriculture terribly unsuccessfully.
00:24:50They actively rob agriculture, farmers, producers, they
00:24:54complain about this, but the state is so eager to take money from whoever
00:24:57it can that it is driving agriculture into trouble. You cannot even
00:25:01predict all this will happen, a food
00:25:04shortage will simply arise in Russia, because this year we are already seeing such an unpleasant
00:25:08situation due to the war, which will lead to a reduction in sown
00:25:12areas, bankruptcy of many companies, and then there is also state regulation
00:25:15of food prices under the pretext of protecting the interests
00:25:18of workers, but... they will leave
00:25:23the village, close
00:25:24the farm,
00:25:27sell the land, no one else will produce, this is what the Russian government doesn't even want to think about, but this is a reality
00:25:31that today hangs like a black cloud on Russia's
00:25:34horizon. Do I understand correctly that precisely because
00:25:38a devastating blow has just been dealt to agricultural producers,
00:25:40for this reason, prices for certain
00:25:44products are rising very sharply faster than official
00:25:47inflation indicates, of course, yes, chicken, for example, is rising because
00:25:51costs in poultry farming are rising, well, and then
00:25:54you start to figure it out, is this a justified increase,
00:25:56an unjustified one, when you ask the question, is this a justified increase or an unjustified one, well, forgive
00:26:00me, I must explain this, this is a magnificent
00:26:03pretext to receive a bribe for recognizing
00:26:07the price increase as justified, then the price will increase, this practically
00:26:10creates a magnificent basis for receiving a large amount
00:26:14of bribes for coordinating correct prices in retail trade and in the food
00:26:18industry. Well, apropos of the disasters of agricultural
00:26:21producers, the noise around the fuel crisis somehow subsided, well, it's clear that at first there was a shock, many videos on
00:26:24social networks with queues at gas stations and so on, but how do you now assess its
00:26:28scale in Russia and, most importantly, its consequences? Again,
00:26:31a big one, in Moscow, in St. Petersburg,
00:26:35fuel trucks were rounded up, yes, which brought gasoline. In
00:26:39the regions, the situation is not so pretty, and as soon as
00:26:42another drone arrives, rationing,
00:26:45reserving, and limiting fuel immediately arises again, and
00:26:48this will continue to repeat, because who told you that attack drones will not arrive, the war
00:26:52is not over, Putin is not ending the war, which means, accordingly, who told you that
00:26:55attacks on oil refineries will stop, that is, this is a temporary respite, but not
00:26:59a fundamental solution to the problem. Well, I suppose that if there is no money even for
00:27:03the restoration of already affected infrastructure,
00:27:06then there is even less money for the creation of means of struggle, since
00:27:10the authorities partially delegated this to the companies themselves, at
00:27:13least to those who can afford it, but you mentioned that, at the very least,
00:27:17hinted that, in principle, state control over prices is not ruled out, as
00:27:20in the old days, in your opinion, how far are we from this point, but let's not go by
00:27:24the timeline, not by time, but rather somehow, well, so as to avoid such
00:27:28direct predictions, but by feeling, what else
00:27:31needs to happen before we reach precisely this point with actual
00:27:35state control? Well, this will again largely
00:27:39depend on what will happen in agriculture now, that
00:27:42is, now there will be a very unpleasant The story will have two stages,
00:27:46there will be some kind of attempt by agricultural producers to lower
00:27:50prices, to sell at least something, because don't forget that
00:27:53agricultural product exports in Russia have become very difficult,
00:27:56so there's nowhere to put it. There's an oversupply of products, an oversupply
00:28:00of products leads to a fall in prices.
00:28:02Well, we're happy, but agricultural product prices are falling,
00:28:06how wonderful! But this is followed by the next step: bankruptcy
00:28:10of agricultural companies, reduction of cultivated areas,
00:28:13liquidation of farms and reduction of supply. Then the question arises,
00:28:17if agriculture itself does not produce products, what to do?
00:28:20Then we have to import, then it's all expensive, then we introduce state
00:28:24price regulation, a situation of food shortages arises,
00:28:28rationing arises, food rations, cards,
00:28:31queues arise for food, and this is not very
00:28:34far off, it depends on what happens this autumn with agriculture,
00:28:38so by spring there could be very unpleasant stories,
00:28:42precisely in the sphere of food supply in Russia. Igor, thank you
00:28:45very much for this conversation, for the detailed analysis of all the latest news. Economist Igor
00:28:49Lipsets was with us live today, well, essentially we talked about
00:28:53the consequences of the war for the Russian economy, taking into account all
00:28:56the latest events influencing what is happening
00:29:00in Russia right now. We will tell you about new developments on Monday at the same
00:29:03time. Goodbye and be free.
00:30:44and it's hard to say how much the city has changed during this time.
00:30:48Firstly, these dragon's teeth have appeared almost everywhere on the streets,
00:30:52and secondly, in many places,
00:30:56this hedgehogs has appeared.