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What Russia’s Economy Needs

La Russophobe has posted an interesting translation of an Andrei Illarionov article on Publius Pundit. Excerpt:

The Russian economy might have grown more quickly on account of its oil industry, but as a result of the government’s breakup of Yukos, and other swindles, the annual growth rate in oil extraction has fallen from 13% to 2%. The Russian economy might have grown more quickly on account of its gas segment, but independent gas producers are being crushed by Gazprom, which has increased production over the past eight years by only 0.6%. The Russian economy might have grown quicker on account of its manufacturing sectors. But not a single sector of Russian manufacturing (with the exception of gas) has to this day exceeded the production levels achieved even in the time of the Soviet Union. For example, Russian machine building is now only one-half what it was in the time of the Soviet Union. So perhaps we should consider as an economic success for 2020 not the entry of Russia into the group of the top five economies of the world, but simply the resurrection of the volume of machine building to the level seen in 1990. Russia nonetheless still has a chance to become a developed, attractive and respected country. But for this to happen much has to be done. Including a lot that will directly contradict what is being done by current forecasters of our “bright future.” Russia has a chance, if it is ruled not by lawlessness but legal order. If all our citizens become genuinely equal before the law, if the judiciary deals with criminal conduct irrespective of whether it is by an entrepreneur, an officer of the FSB, or the son of a First Prime Minister. If government companies can refrain from stealing the property of others, strangling independent producers, and in the end are de-monopolized. If billions of dollars stop flowing from the pockets of Russian taxpayers into endless national project boondoggles, “miracle-weapons” and government “nanotechnologies.” Russia can save its historical chance if the current political path, being pursued by both Vice Prime Ministers, is curtailed. But Russia has no chance if it continues on this path.