The Duran Podcast - Russian economy expands, industrial surge

Episode Date: January 14, 2024

Russian economy expands, industrial surge The Duran: Episode 1803

All right, Alexander, let's revisit the Russian economy. And Putin has said some interesting things about the Russian economy. Actually, he was the other day he was visiting a military hospital. And Putin said that the Russian economy is shifting towards an economy that is more, more heavily based on manufacturing. and production and stuff like this rather than energy. And he wanted to point that, I thought that was interesting. And he said that the Russian economy is shifting now. And it's doing this while maintaining its growth, its levels of growth.

So what is going on with the Russian economy? Well, that is entirely correct. That's exactly what he did say. And it comes off the bat, various meetings that he's had with people who are active in the economy, not just on the finance and macro side, but, you know, people who are actually there who are industrialists and people of this guy. In a very, very interesting meeting with, I think his name is Seligay Jemezov, who is the CEO of Rostek. Now, Rostek is this absolutely colossal industrial conglomerate in Russia. It's sometimes compared with Samsung in South Korea.

It's, you know, that kind of scale in terms of the economy. It's huge and it does huge numbers of different things. It builds ships. It builds machine tools. It builds every conceivable industrial product that you can imagine. It's by the way, largely, though not entirely state-owned. And it encompasses most of the Russian military-industrial complex. So they're the people who make the shells, the tanks, and all. of that kind of thing. But anyway, this particular meeting was about civil aviation. And this person, this official, Chemezov, told Putin that Russia anticipates building 500 civil aircraft by 2030. That's in six years. Now, I have to say, I mean, you know, that is an eye-watering figure. and I really do wonder how, you know, sustainable and achievable that is. But this man said, look, we have massively modernised our factories over the last 10 years, and we are able to do this. We have the designs.

We've got the Sukoy, a superjet, we've got the MS-21, we've got the Tupilf 214, We got them already. We got the engines. He talked a lot about aircraft engines, a topic, which, by the way, I know quite a lot about because in another life I was involved to some extent in aerospace matters. We got the engine technology sorted out. We got all of those things. We got the production.

We got the people. We do need more people. But we can make these things. We are able to make these things. And elsewhere, he said, you know, we're going to increase production of our heavy, Illusion 76 transport aircraft. We're going to boost that to 18 a year, which again is a pretty high production rate. So we are able to do this.

And every day, you're reading now about new machine tools being rolled out, new products being rolled out. Also, however, as well as these Rostek, which is at the center of this, large numbers of private businesses. going into manufacturing, producing products on an ever wider expanding level. And very interestingly, in December, despite the higher interest rates, the manufacturing PMI in Russia actually rose. It rose from 53.5 to 54.5, which points to a continued industrial. search. So I think Putin is probably right. I mean, it may be that they won't achieve every one of those objectives that they're saying, you know, 500 aircraft for a country that, you know,

until recently wasn't, you know, production of aircraft had fallen very radically. But, you know, maybe that's over-ambitious. But then again, maybe not. Maybe they are capable of doing this this kind of expansion and that there is a big expansion going on, that is indisputable. Now, alongside that, Rostat, which is the Russian Central Statistical Agency, which gets a lot of criticism from ill-informed people, but which most people, including in the West, who study these things and who look at statistics, actually considered to be a pretty reputable and reliable agency. Anyway, they've been looking back at the performance of the Russian economy

over the last two years, 2021 and 2022. And they've revised GDP growth figures for those two years. And they say the GDP growth in 2021 was 5.9% as opposed to 5.6%. Remember, that's the recovery year after the pandemic. So you would expect growth to be pretty high in 2021. But much more interestingly, they said the GDP contraction last year. This is the contraction that followed the sanctions was lower, smaller than initially assumed, that instead of it being 2.1%, it was 1.2%.

Now, if that is correct, and I've, no reason to doubt this, by the way, then today's Russian economy is significantly bigger than it was in 2021. And we can, it's a big difference. It is a very big difference, yeah. It is significantly bigger. And the economics ministry has now come forward. And they said that, you know, that they've been going through all of the figures that Rostad is producing. And they've come to the conclusion that the Russian economy. economy actually has the ability to grow faster than previously thought that some of the supply bottlenecks and those kind of problems are not as entrenched as had previously been assumed. And that growth rates will in fact be higher over the next few years than had been imagined

previously. And they're also saying that the present inflation spike is not a symptom of overheating. The economy isn't overheating. It is on a sustainable upward curve. It is rather a product of a demand surge because there was all these savings that were built up during the pandemic. And then the government cut taxes last year. And that put an awful lot of money in people's pockets. And they've all gone out and started spending all pretty much at the same time, but with things slowly stabilizing there on the demand side, and with production rising, this inflationary spike should be a fairly momentary thing, and that the economy will continue to grow faster than previously assumed going forward. So, interesting.

Yeah, it sounds like Russia's, Russia has it all there. I mean, they have it all there for for big growth and continued growth, except for the one problem, which we identified in a video, a couple of weeks back, which is the problem of people, manpower, in that Russia needs people needs people to fill all of these jobs from all of this growth. And I think that's the one weak spot, if you could call it a weak spot. But I mean, we talked about in the last video how they're going to address the shortage in people to fill all these positions. But, I mean, is that a correct assessment to say the one weakness in the Russian economic engine is the fact that they are short of people?

I mean, almost everyone's employed in Russia. I mean, you know, it's like almost full employment. That is exactly correct. I mean, they don't have the great army of surplus workers. that high growth economies generally need. I mean, everybody's working. Everybody's working quite hard. You can obviously increase productivity,

and no doubt that will happen. But it can't sustain growth rates of four, three, four, five percent a year just on improving productivity. You need to bring in more workers. And, of course, you can see what the Russians are now doing. I mean, Putin has just had this free trade agreement with Iran, free trade agreement with Central Asian states.

He actually gave a interview on this very topic, by the way. People were asking him, you know, how are we going to, are we going to have immigrant workers? This might not be very popular with many people in Russia. Putin said, well, you know, we have to find ways around. We're not going to import vast amounts of labor, but we will import. people that we do need. So the answer shortly is that they will have to introduce more workers, but they will probably, as I said previously, follow the German gastobiter model of the 50s and 60s, guest workers from Central Asia, Turkey, Iran, other places, even Eastern Europe, perhaps,

rather than permanent migration flows. Notice, I mean, they've just done the free trade deal with Iran. They're doing, they're working. He's apparently going to be going to Turkey fairly soon. You can see what this is all about, ultimately. Now, one final question to wrap up this video. 2004, Russia assumes the presidency, the rotating presidency of Bricks. We've got new members in Bricks without Argentina.

What are you expecting? Well, there's going to be an important meeting in Kazan, and I think the Russians, the major priority they're going to give, is to work to trying to set up the new financial and payments architecture, the trade architecture, and the Indian foreign minister, Jaisanka, was in Moscow for five days. He stayed there for five days.

And apparently he came with a very, very, very. powerful delegation and it seems that this is primarily and principally the main topic of discussion with him. Modi is apparently coming to Russia shortly and I think that this is really what they're going to focus on now. I think this is their major priority. It is going to be bricks. Let's not call it integration because integration has been given this dirty word because of the way it's worked out in the European Union and with globalization and all of this. But creating a sustainable, effective trading architecture independent of the West. And of course, if the West does seize Russian assets in February, this looks likely, that will give the Russians even more ammunition. They'll be able to

say when they have the summit in Kazan, look what they did to us. They could just as easily do the same to you. Well, they will. They will do the same to you. They will do the same to you. Not an integration, a harmonization maybe. Harmonization is a much better word. Yeah, the EU has ruined the word integration, the globalists and the EU.

All right. We'll leave it there. at the durad.locals.com. We are on Rumble, Odyssey, bitch, shoot, telegram, rock, fin, and Twitter X. And go to the Duran shop, 20% off. Use the code, the Duran. 20. Take care.