The foundations of modern Russia

The Kremlin systematically restores the shattered economy and social infrastructure, creating over the previous decade preconditions for growth on a sound basis, but the results are not always visible at first sight.

Last week Prime Minister Dmitry Medvedev delivered his annual report before the lower house of Parliament — the State Duma. The public greeted his report with special attention, primarily because it is the first major political speech of Medvedev in the aftermath of demonstrations and riots provoked by the opposition, protesting against corruption, to which the Prime Minister personally involved. Medvedev was important for my report to bring hope in a better future, and to present the results of its five-year work in the best possible light. In terms of sanctions and economic crisis, this is not an easy task, but after a four-hour presentation and dialogue with Medvedev deputies have the impression that Russia has managed to stabilize and get back on the path of progress even in the most difficult circumstances. This is evidenced by last year’s economic growth of 0.3 per cent, which at first glance may seem modest, but compared to “minus three” in 2015 is a great success. Most importantly, the report confirms Medvedev’s strategic progress in several key areas.

The Prime Minister said the country faced many problems, but can’t waste time on populism, speculation and internal conflicts, which benefit only those that wants to isolate and weaken Russia. While Medvedev admitted that the society may have differences of opinion, different political and ideological approaches to solving problems, but the goal of everyone should be one — development of the country and welfare of its citizens. Medvedev stressed that Russia, despite all the external pressure, found the opportunity to confront him and go on the offensive to protect its interests. The country not only responds to crisis situations, but also creates new growth point, relying solely on their strength. “Today, no challenges no longer scare us, on the contrary, provide an incentive to develop. And this confidence in their own ability has already started yielding results. After all, our economy is growing, despite the fact that we all predicted disaster from different places, including from overseas. The progress you see, even those who can hardly be suspected of sympathizing with our country,” — said Medvedev.

International ranking and the role of T. Rex

The fact that Moscow is stabilized major economic indicators, clear and to the two largest ratings agencies Fitch and Moodys, which changed its forecast for Russia from “negative” to “stable”. And the third Agency Standard and poor’s even raised the rating to “positive”. As predicted Medvedev, to the end of the year Russia will be able to return to the group of countries with a good investment rating, which would open up additional opportunities for financial flows and other problems. In the world world Bank’s Doing Business in 2016, Russia took the 40th place, up from 2012 80 positions. In this rating Russia now holds the best place of all BRICS countries.

These ratings, of course, is to comment from a political point of view. Despite geopolitical tensions, sanctions and international competitiveness of the White house and the Kremlin that Washington is not interested in ending the relations with Moscow — he just wants her to relax. So it is necessary to interpret the recent statement by us Secretary of state Rex Tillerson that he sees no reason for the Russian response to the missile strike on Syria, “Tomahawks” because, according to Tillerson, the Russian military was not the target of the operation. In other words, Washington is avoiding a direct confrontation with the Russians and in confrontation uses intermediaries. USA or incited the Europeans to impose sanctions against Russia, or blow to Russian friends, our calculations suggest that the direct damage it inflicted will not.

On the other hand, the same Tillerson lobbying my “former” oil company ExxonMobil, which he headed from 2006 to 2017, and which he still owns 2.6 million shares, ensure that she was given special permission to continue business in Russia to bypass us sanctions. It is the largest oil company in the world very closely associated with the Rockefeller family. Without going into conspiracy theories, we can assume that the duties of the T. Rex as the head of the state Department’s name is by analogy with the flesh-eating dinosaur, comes with more questions than simply the promotion of diplomatic interests of Washington. Added to this is the criticisms Tillerson due to a possible conflict of interest and the fact that in 2013 Vladimir Putin awarded him the order of Friendship, and that in 90-e years he headed ExxonMobil in Moscow. All this is combined with similar attacks on the new US President Donald trump.

It is not surprising that a prominent American rating agencies positively estimate Russia. If Medvedev forecast that before the end of the year the Russian rating will rise further, are correct, it’s only to confirm theory, according to which the purpose of Americans — to eliminate from the game’s biggest competitor, that is the European Union. Breaking up their relationships (not only economic) with Moscow, the Europeans have consistently caused themselves damage. If in the last few years the Americans in the person of the head of State Department John Kerry and Tillerson has held about 50 meetings with Sergey Lavrov and Vladimir Putin, the head of EU diplomacy Federica Mogherini (this news to many was a surprise) these days for the first time since taking office in 2014, has visited Moscow.

In light of the fact that the Americans periodically flies over the ocean and call to the Kremlin, just unbelievable that the Russian neighbors, the Europeans, and has not done so for three years. The fact that they have introduced anti-Russian sanctions, which they themselves were deprived of tens of billions of dollars and hundreds of thousands of jobs, but in 2014, the Ukrainian problem is a millimeter closer to a solution that speaks only about incompetence of the Europeans. While the Americans and Russian exchange visits at the highest level, and the British leaving the EU are establishing a strategic partnership with Russian oil giant Rosneft, the Europeans sit and watch their profits and place in the Russian market slipping through the fingers. Therefore, in Europe, more and more of those who do not want to agree with that, as evidenced, in particular, the output of marine Le Pen in the second round of presidential elections in France. She and Francois Fillon, another candidate who is very optimistic about cooperation with Russia, received the support of nearly half of the electorate.

The bridges over the failure

At this time, Russia continues its path. In one decade, from 2006 to 2016, the average life expectancy there has increased for six years. Now Russian citizens on average live 72 years, and this is the highest figure in history. The number of orphans over the past four years has halved to 60 thousand. According to the world health organization, last year Russia entered the top ten countries that are most effectively fought with cardiovascular and pulmonary diseases, and diabetes. From 2011 to halve the mortality rate among newborns, and is the fruit of systematic investment in large clinical centres equipped with the most modern technology. Last year nearly a million people received treatment in these centers that accept patients with the most severe diagnoses. In addition, in 34 regions of Russia launched the project of development of medical aviation that patients from remote regions can be delivered in one of the major medical centers.

Russia reduced inflation to only 4.2% per year, and this is the best result over the past decade. Plans to reduce unemployment to less than five percent, although now it reaches only 5.4%. In recent years, Moscow has opened 160 scientific laboratories of world level, and by the end of the year there will be another 40. They will work, young graduates and PhDs involved in the project “Megagrant” that will significantly improve their standard of living. “Western funds, without hesitating, carried out the breeding in the Russian universities. Just came and lured to her most capable. Was a real hunt for talent. And we had to go out of fashion in science. Today we do our best to overcome this intellectual failure. Overall spending on science in recent years, growing. It is also important that in this area began to come money of private capital,” — said Medvedev.

Another two measures are extremely important. First, the situation has changed with the proceeds from the sale of oil and gas to the state budget. If earlier the Federal Treasury depended on those revenues by two-thirds, in the first quarter of 2017 to 60% of the revenues ensured the non-oil sector. This is a very important indicator of major structural changes in the Russian economy. But that’s not all: in the first quarter of 2017 total tax revenues rose by a third compared to the same period last year. In addition, the number of small and medium enterprises has increased over the six months to almost eight percent, and now they provide about 20% of GDP, which before was unthinkable.

The second important indicator is the growth of production of agricultural equipment by almost 50% and now 55% of tractors and combine harvesters to the fields of domestic production. Still for several years imported products in this segment occupied almost 100% of the market. Now Russian farmers are buying about 22 thousand new combines and tractors a year, which indicates a large growth of the agricultural sector. Along with these indicators, the growth in agriculture consistently exceeds five percent in a year and Russia for the first time in the new history not only produces enough food for itself but also sends them abroad, becoming a major exporter. And one more thing: today the Russian Federation meets 77% of its demand for pharmaceutical products due to own production.

10% in the past year, increased production in the sector of defense industry along with labour productivity (13%). The annual plan in the industry for the first time in history fulfilled by 99%. The export of military goods has brought $ 15 billion in 2016, and the total amount of foreign orders exceeded $ 50 billion. The state budget deficit last year was the lowest in the last decade and decreased from 170 to 12 billion rubles. Medvedev noted that the problem of budget deficit is no more. Moscow no longer have to take money from the Reserve Fund, which the state deposited in the period of high oil prices. Western experts predicted that 2017 will be the year when Russia’s Reserve Fund will be completely exhausted, but the opposite happened: he not only exhausted, but again filled up by and is growing.

Laid the foundations of modern Russia

When evaluating all the results listed Russian Prime Minister, the conclusion is that the strategic plans of Moscow, planned over a decade ago, are beginning to bear fruit. Significant results in the healthcare and pharmaceutical industries, increasing life expectancy and rising birth rates, a new strategy for the development of science and agriculture, the restoration and upgrading of the manufacturing industry sector, which for decades was dominated by ruin and desolation, which have suffered from budget cuts. And although final results are still far, it is clear that serious financial investments and ongoing monitoring of government expenditure and implementation plans in the long term give good results.

All this has laid the Foundation of the new modern Russia that the world will deal in the future. The Kremlin systematically restores the shattered economy and social infrastructure, creating over the previous decade, the preconditions for growth on a sound basis, but the results are not always visible at first glance, especially with the short-term Outlook. In America, all these processes are foreseen and therefore did everything to at least slow down the development of Russia, knowing that later it will make it much more difficult. This is the essence of the geopolitical tensions of the two superpowers in recent years. Washington was important to break all Russian-European relations and to destroy is very dangerous for a combination of economic and political cooperation with continental players who perfectly complement each other. And yet it is hard to believe — unless you happen to some very severe shocks to an iron curtain between Russia and Europe was able to survive for long.