by Christine Bierre (EIRNS) — Dec. 14, 2023
Jacques Sapir, a Franco-Russian economist who has run a yearly Franco-Russian economic seminar since 1991, just published an article in a kind of “gaullist” magazine called Geostratégie Magazine.
He reports that by taking advantage of the sanctions policy, Russia’s economy grew this year, between March and August, by 4.5%, or 3% if calculated annually. He credits that to 1) significant state support to import-substitution programs of products hit by the sanctions, 2) investing in manufacturing, 3) benefitting from spillover from high-tech military investments, 4) forcing the Russian billionaires speculating abroad to bring back their profits every year, 5) profiting from trade in industrial capacities with China and other countries, and 6) getting out of the dollar financial speculative markets. Sapir wrote: “The manufacturing industry achieved exceptional growth of 9.4% over the same period. Construction is also progressing strongly, and real wages have risen by an average of 8.0% over the last 6 months.
“This situation can be explained by several factors: household consumption has picked up and is driving consumer goods industries; the war effort—the defense budget should rise to 6% of GDP by 2024—is also having a positive impact on the mechanical engineering and metallurgy industries; finally, import substitution programs are beginning to bear fruit, with astronomical growth rates in the electronics (+39% over the last 6 months) and electrical and optical industries (+30%). Overall, industrial growth is driving the economy.”
Through these changes, says Sapir, the Russian economy is poised to make the transition from largely exporting raw materials, to an industrial economy. While things are not yet fixed in this orientation, because that would require specific changes in monetary policies, he is very happy about these results, and hopes the next steps in this direction will be taken.