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tv   World Apart With Oxana Boyko  RT  October 12, 2017 2:29pm-3:01pm EDT

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kind of welcome to all the parts for decades if not centuries russia's fascination of it geopolitics and global leadership came at the expense of its all internal development the soviet union since put into space before many of its citizens had running water and as last put in the vast sea into regaining some of its lost international influence many of them still don't know what will it take for russia to fully turn its and i just want to discuss that i'm now joined by russia's economic development minister. and i said it's great to talk to you thank you very much for a time. now russia i think is a paradoxical country in the sounds of always being caught between playing big on the global stage and merrily getting buy a home and i think that puts your ministry in the their precarious position because development has never been our first priority will it ever be will it be because if
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you're stronger at home that you mean that you can be stronger globally but it is russia really strong at home at the moment it's improving it's improving the economy if you look at the results of the bus decades if you look what has happened was the. beginning of this century it's improved a lot it's improvement of g.d.p. in those three a very very different periods on the new technology also we're progressing so we've reduced from well i know that the russian budget has long been your specialty and just a few weeks ago the government dissolved the draft of the next three year budget to the parliament already branding it as a plan for development. i know that as a government official you have to put a positive spin on it but as an economist and they're pretty good economists many people believe that the one of the best in russia what exactly in the budget supports the development framing well first of all of the budget the polls. so this
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increase of me to parliament shows that the economy has fully adjusted to a low level of food prices because you know you can come with the soviet union in the mid eighty's when you would soon because the decline in oil prices was sharp in both of the cases the claimed more than two fold in each of the cases and unlike the solution was the soviet union which may never have adjusted to low level fuel prices russia did so in the bust couple of years the budget that was submitted to the parliament shows that this is the case because with forty dollars per barrel oil prices with them one to two years will have a few school deficit below one percent of g.d.p. well they are a school of economics here on alma mater. of planned budget expenditures that's almost one third going to defense and security and the share of spending on education on health care decreasing puts russia on par as they put it third world countries is that a fair assessment i believe not and the story here is that you should look at the
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consolidated budget which includes all the budgets of the federal budget the regional budget the extra budget the funds and they can together of course the situation is not so. you are just great but what is important is that in the coming years the difference will be shifts towards more than one simple the infrastructure to boards more investments in human capital and most of all of this investment should be done with the government money we definitely should use more private money to finance those in the us you're living in a perfectly to my next question because you often talk in your public appearances about a plan that he a minister is currently developing for attracting private money into large infrastructure projects if. the government is ready to provide certain guarantees for example that guarantee that inflation will not go beyond four percent but what makes you believe that the russian people will have seen their savings evaporate several times over the last few decades would trust the government and which.
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cannot make promises when the laws do the agaves they created so there was time it was nineteen ninety eight it seems them there was no binding crisis in russia government was always using the. funds to support of the making and when it was needed like it will happen. so in the bust through the minister if you look even the value service for example by. heart here in russia trust is a major issue in russia not only trust between the people but also its trust between the people and government institutions there is certainly something lacking there sargasso what do you make rational people trust that they can invest their money now well it's not only trust so also a belief in the future with all the words here that we had in the call in the me on the financial markets in the bust to the three years of course the uncertainty a little has increased and one of the reasons that the quantum is doing but the gross is that this certainty is so great it coming back and all those structural reforms that we have implemented in the past couple of couple of years on the
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market economic level the implementation of inflation targeting we started with the seventeen percent so inflation rate and now it's only three percent we're implementing special measures that are guarding the mystic it will be from the void food prices where using the best global experience experience of countries like norway and trying to implement the same policies here in the russian we did so this here so this has already brought additional stability to the market economics and we see that the so to what will be happening with the will in me is growing not only among the households about those among the companies i guess what you are saying is that uncertainty still there but not as bad by russian standards yes it improved so then t. is coming back but it also means that there is more some steel that may come back into the economy and we are working not only know the muck economic agenda but those on the micro my courage and we are planning to switch to a longer term tariffs or the make sure i'm on the open. improving the one that was
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the company of course was so we're working on different areas to more stability to bring more predictability i'm not russian economists have very stark disagreements about spending and social spending in particular as a driver for inflation you came to the ministry after serving both in the central bank and in the ministry of health finance both of which are considered on the yielding very strict monetary is my one day of being a development developmental minister in any way your appreciation of milton friedman has to change no actually have the sea views. the same use that was caving in the central bank the same news that was given the minister of finance the lives the government in terms of spending especially useless spending the modem full bright with financing and when they're still running. those things within the limits so the conclusion that this happening is we can see to be compensated by the decline in interest rates in the domestic when those opening we feel more private
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spending your life to compare they currently stationed in russia to the united states and there are only nine to nine just when the federal reserve had to drastically increase interest rates in order to constrain inflation which indeed was successful bringing a dollar to two point two percent on the same figure that we have now in russia and when you look just at the figures. those comparisons does parallels are very tempting except for one even in its most keynesian moments the american economy was never so have a regulated and so overwhelmingly owned by the state as in russia what why do you think that american comparisons applicable here because i think the. ownership in russia skews any comparisons well it's a different question so i will. so when the us economy in the late seventy's early eighty's was writing the theory of pollution it was close to you know it's when schools with twenty percent of the scene with a couple of years ago and there was this. what
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a war hero which was leading the there was a point of time achieved he achieved of course low and stable inflation which led to lower and stable into this phase with him before the new ship you'll long term that cycle so the same is true for russia as we enter a new low in stable inflation in the way i think it will flow unstable interest rates which will mean that there will be more room for financing especially on the private economists and if you look at the balance sheet of states we have the state that is extremely low one of the lowest globally if you look at the bone chip of how is it that i'm going to figure is the parallels are there but when you look at the ownership of this is the second part of your question and here of course you should look on the industry by industry because of course the right in this is like for example oil and gas where the presence and the b. in this which are definitely important for us and of course here you can see for large the phone companies for each of them in the markets are the same time you can
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look at the telecoms where you go it is almost nil presence of the state you can look at different services service system so and so forth so it's still the boss seventy percent once again it's well it's not above seventy percent it's much much lower but once again you should look on the rolls and the economy what is it that once again you can look of the brain this degrees yes the right in this with the state is booming and those industries a lot of the number from this with state is the playing that. role is really really significant so it's not that good because you know if you look on the industry by industry well it is simple compared to the soviet union cheryl thread business is growing but i again if you compare it to the united states can i ask you one more question then dave realm of that comparison because at the time the reagan administration which for us faced with the increase deficit had to agree. a corporate tax increase while also resisting any cuts in defense spending do you think that kind of pattern will have to repeat itself in. well definitely what we
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should repeat in terms of reagan approach is that we should perforce ease. the environment in the rich business is that if you look at the positional fresh and different ratings for example what would have been doing business trading we already within the ford you we have started thirty four years ago somewhere around one hundred is physicians we improved here that are made you can only continue to work here if you look at the water going for. the cynics we are also progressing here and we are also within the top forty countries in most of the areas you know with these are you leasing you know making things easier for the business with small or medium sized businesses this is what together with the new lending cycle create in the way they want to force the liberals going forward now that recession that american recession that they are has had a very severe effect on the american financial institutions many banks were failing
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some of them were bailed out at the taxpayers' expense just as a very recent case are here in russia but like in the united states the russian public almost never gets access to the financial details of those bailouts since you often speak about transparency and fiscal discipline accountability what do you think stops the russian state particularly the financial regulator from letting the public know where this money is going why did those bailouts have to be such a big secret for everybody well i believe that all the information would be open to some of these so you know when the financial markets the banks are really sensitive area so when the getting access to a lot of information and the way to beginning with these can spoil is usually you know influence of the brain some so and so forth so even in the united states during the global crisis of the way to win in some of these issues and we're taking a really fast it was the old biggest closure but what is important is that in the thing that is similar for united states in the early eighty's for russia the. this
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is it is switch to a low inflation resume means that those business models which are on the we're the only by the initial market so it's on the banks or in the you know industry or some other areas they just simply blow up because when you have high inflation you can hide it all the inefficiencies that here in the environment of low inflation of course that is the mode that my space we're going to carry it for us if i may persist on that question i recently see speed before the federation council and what was interesting there is the one senator after another was questioning you about the cuts and budgets to that specific regions and you were very upfront about the fact that money is studded that you have to look into each and every project and see how efficient it is now if you look at the. recent bailouts if we just take a bank. they're believed to be worth hundreds of billions if not a trillion probles that's a huge amount of money and nobody except for a couple of officials and the central bank know where that money is going as
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a matter of principle do you think you can instill that culture of transparency and openness when the financial regulator itself is operating in such an update clay well it's more a question of the central bank most need but you know that it doesn't have to come on the development of an agreement that it will it was you know the fact that some of the bangs were leading most effectively in the bust for us was affecting the going to open negativity so the fact that there will be doing this so you know room practice is going forward means that the overall level of interest rates within the global economy will go down and these would be for a companies that that. have to build them so once again. those investments that the central bank of the banks is that surely made what was on the economist heal as the central bank was already announcing they do not want.
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the in the cave with all those things at some point in the future they want to sell it on the market as them well i guess my question was more about. the general posture of government by is. what i like really much about your philosophy your i really i'm very much when you as an artist whether you'll be interviewing the central bank you should ask them questions and you know push them to be more open well minister we have to take a very short break now but we will be back in just a few minutes. the city of luxury and free but also an alarming number of people living in the streets. the simple fact in l.a. is there's just not enough shelter even if people on the streets right now decided to come in there's nowhere to come in it's been a struggle. this man from his own response to the problem and constructed
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dozens of tiny homes for people in need of shelter when you have nothing in order to go. you know having something like this may as well be a castle but do the authorities accept such solution tiny house on a city parking space is not a solution. someone wanted the site otherwise it'll be a free for all the news there a better alternative to end the homelessness crisis. colon is still exist. ricos treated as one. hundred three cool. little can i do a lot of seats and they can be seen with the islanders controlled by the us government and some puerto rican screw even dependants. you know me being about an
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hour nobody does it wouldn't do it either way like that i mean don't i mean we're digging a game where you. still do wish to join the u.s. hundreds more leave every day. with the country at a crossroads anger on the island is on the rise. welcome back to worlds apart with russia's economic development minister and it's about a minute minister just before the break we were talking about the accountability of russia's governmental institutions and your own ministry is not a stranger to controversy your own predecessor is currently being on trial on charges of bribery i'm sure you would not comment on the conduct of that particular
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trial but speaking more broadly how would the u.s. says the russian court system as far as the protection of property and economic rights is concerned because i'm sure you would agree that those are crucial for making people. willing to invest in russia well what we are facing these base is that there are a large number of changes that are planned to be introduced into the court system in order to improve the quality and because from the quality of the court system is important for protection of the rights and then cheerio for broader impact on the economy so there is a list of changes that was prepared you know we were involved in that process a little bit more with. his proposals and now they are being implemented so human because of their form of the court system so most of the proposals came from the group and it was approved and now being introduced with all those changes here there have been a number of attempts over a day over the past fifteen years to reform. court system but not of down the cause
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for example that none of them have been really successful why do you think that is so you going to you can that you can to change you know the state of different things with him one night so your generations should change and the demand for proper work in court system should increase in order to have the big changes happening in the economy look for example at the issue that is happening on the government level go in a different version of events as a new generation the entering the as the governors of those regions the situation changes because the approach towards private businesses towards how to you know what should be done in the on the moon so on so forth changes dramatically i actually have that question but before we go there let me ask you specifically about the courts and the judges because if you look at the media it's you know it's not the area that is big but that he made a point that it's a generational change and i think the median age of the russian judges is fairly is not that high the problem is that their way their record and their generational
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change not only in the court system itself but in the country and they want to me as a whole because you know the core system does not is elitist from the rest of the corner from the rest of the population it's the part of the country that part of the population so broad that generational change is very important for russia because you know if you look at different generations there are three large generations in russia one is the post-war generations the second one is the generation in the last over the million miles or was starting a little bit early in the russians from that year in the one nine hundred seventy five seventy seven and seal the eighty's and the so generation is the generation which is was born. in the past fifteen years so the big suv that is carrying these days is the shift from the post-war don't you reach into what is the million miles which will be an important shift toward the russian economy because you know the post-war generation was studying in soviet union and we're having the early ages you know ten to twenty years. within the soviet union those would know least of
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course it's having an impact for all these people think and what they're doing i heard you say that in your ministry in particular you are consciously trying to move away from the traditional bureaucratic vertical and make interactions within your own situation more horizontal and that sounds very progressive and very inspiring but when you look at management studies here in russia even the westerners who come to russia that the intention of bringing the managerial practice is they sooner or later a virtue of the authoritarian styles of leadership simply because they believe that their subordinates perform better under it can you change the culture really. trying so we move modernization i see that you successful during your stay with us will take time because you know all the things i don't happen overnight if you can do is something with it because it is old with them one week one month or even one year so it's you know that in additional beauty of them you know the new the people are coming the way we have today within the news these changing and i hope and i
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see that the new approach is that you have to buy the results in the way that them so you know we are trying to show them the time to market all those so-called old reforms proposals that will be appearing and it was such a new approach you know little a little lower number of levels or you are here you know what did it come between the people. what can be achieved i also heard you say that you want to spread these practices you see in prevention and as a key for development in russia but i think in russia in particular a big issue with institutionalizing the fish and sea of wine and efficiency is not just. a result of poor management it's actually a deliberate income generating mechanism that saves on the budget that usually has . benefactors and protectress within the state can you change the phenomenon of with simply better management practices were always the few schoolkids through the you know motel of the few school police who could get them. because you know the list. the government spends the more for private spending and the more you know we
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come told from the private donors so with all the money you spend so. you know in different areas you know those market economics she was that they're happening that they help of course. according to the latest report by the state auditor around one trillion robots and they just thousand and sixteen budget were misused or misappropriated primarily by government bodies and some of them go into. go deep into the details because it's the technical story so if you believe quartz. even if you did everything. right how you spend the money and what the quarter of the different budget called this would be for the improperly so you think it's a technical mission thanks for taking but i'm sure you would agree that there are still a lot of misuse of budget money within the russian state system not that much that much differently because you know if you look at the structure of the spending of these these these social spending represents a significant part of you know being pensions and supporting the pension system you can misuse money here or you know spending on these question of additional budget
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spending on the wages are going to be here in the you know education and here you can not use money misused money here now you already alluded to that over the last few weeks we have seen a whole wave of the new appointments at the regional and sometimes federal level which sparked a discussion in russia about what was the main goal of this elite try taishan of whether. the primary objective here is simply to give a second brass to rejuvenate the old system while not really changing it or whether the goal israeli changed the system from what then how do you see it from the inside well it's not me who should ask what is the primary goal because it's not me who is leading the changes of the year seventy one and only the small element of those changes but what they see is the ability for example on the regional levels where the new governments are coming in there is the boys it's you. was it your response from the population a positive response from the company was there. in the us more so will the broad
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with a good day expect to be you know a long as i don't put it different back from all that got to do a little develops. you know situation do you proper direction let me ask you one more question about the regional government of russia has a very peculiar system of cross regional income redistribution some are good. sometimes just dean some to rise is local initiative what's the point of working too hard they were being smart if they access money is going to be delegated to the federation anyway looking forward to seeing the current system of redistribution of power and resources between the federal center and the regions to have to stay or will have to change it would be good once again towards more autonomy over the regional authorities if you look at the entire budget three you know reforms that are introducing in the past couple of years old are you seeing stimulating those who are you know those who are it's you stronger investment the stronger you call
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them the girls and. i mean those regions because to stimulate it really like it was happening previously correct me if i'm wrong but i think russia has a historic predilection towards on the one hand a very. strongly central i staved and that need has been increased because of all the security concerns but on the other hand. i don't think russia can no longer can no longer afford the dome and hearing state and you often yourself talk about the fact that. russia needs the energy the creative potential of its people not only to be competitive but honestly in order to survive the state can do without it how do you balance between the two and how do you provide for both control all three of them the need for both of them i think increased right i believe that this is a. generational story and it will be opening essential within the next couple of decades to be a great deal and the process hold for. you know more space for private than you
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should see it for you should you feel free germans will be seeing it so this will be a gradual essential process you're pretty upfront about russia's demographic challenges i heard you say that the countries labor force is expected to shrink by about eight hundred thousand within the next four six years you see new technologies as a remedy given that the world's leading economies are still maintaining their policy of sanctions against russia where would those technologies come from a lot of technology is coming out of russia you know we pilots in space we are you know doing pretty well in the eighty's technologies companies like you know like us . or you know producing top. products which are truly global specialist or the you know what it's a little and so and so forth so most of you know we should do all those technologies you know we always as a nation will be able to invent you and the new economy in the new environment.
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you know where there was a lot and well i think many people say that the russia is exceptionally good at it and inventing it's much. worse at implementation and. creating. so that's why i'm speaking about talking about the measurement story because you know the proper management both on the state level and on the private one the middle this is what is important in this spreading the technology is and will be you know the company you know. across the country is really important because the sport will be hoping to implement those inventions and that's leads me to my final question minister have been very patient with us forecasts are an important part of your work and. you're pretty bold in your statements for example you have been saying recently that russia has reached the sustainably low inflation at around three percent what is sustainable in the russian context especially given russia's quite. well it's sustainable in the global context because the economic
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policies that we have already implemented that already in place we'll you know they diminish the impact on the world food prices on the the most important and then terms of foreign capital inflows we know that by them in you more of the sanctions story and we also have to adjust the beast part of this he should so it means that the mystical i mean and you know for significant protected him from impact from the outside and that is why for the rest of three like the money going to make use of russia they investing heavily both on the fixed income instruments in the equity estimates and we see more and more inflows coming into the country despite all the sanctions well we're doing our best in the police to help on in order to protect the most to get going from annual if you from the outside while the minister on this very optimistic now we have to thank you very much for a time at a time yes please share your comments on our facebook and twitter chalice and i
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hope to see you again same place same time here. on the. total. money we didn't. see this move for you.
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you on employ artist types who can't get jobs some of them turn out to be you know defining ours through the vision that they present and they end up in song we're cracked drug house like east berlin or the lower east side of manhattan or so how and. and this attracts the buyers of the big money and the gallery and then that attracts the house flies in the suburbs and then that attracts the property speculators and then they push the artists out. here's what people have been saying about rejected in the senate it's full on awesome the only show i go out of my way to launch you know is the really packed a punch oh yeah it's the john oliver of r t america is doing the same we are
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apparently better than two thousand. and see people you've never heard of love back to the night president of the world bank. because we're going to. send us an e-mail. washington is announce the united states sees withdrawing from your desk citing among its reasons the organizations alleged bias against israel. and you said it to and these alleged acquaintance that you chiba cool revealing the white mainstream and social media organizations manipulate the news. very very basis. try to make up for the back something isn't in the tree but in those cases they. use some human intervention to make sure that. you. encourage the thing to be basically.


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