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Putin's Conservative State Capitalism

Published: December 17, 2013 (Issue # 1790)

The essence of President Vladimir Putins annual address to the Federal Assembly on Dec. 12 was that his enchantment with state capitalism and Soviet economics is continuing. Rather than promoting higher economic growth, he wanted to go after the remaining prominent private businessmen.

Russias most urgent economic concern is the disappearing economic growth, but only in the middle of his speech Putin arrived at the need for the renewal of sustainable economic growth. This time he did not blame the euro crisis, but he admitted that the main causes of the slowdown are not external but internal.

Liberal economists usually blame corruption, expanding state capitalism, red tape, decreasing competition and stalled international economic integration as the main causes of the declining growth. In a more positive language, Putin mentions four new factors of development namely high quality of professional education, a flexible labor market, good investment climate and modern technology.

All are correct but hardly key. Putin boasts about the minor improvements in the business climate that have occurred in the last two years and calls for further improvements, which are to be welcomed.

His talk of technological and professional development sounds like a Soviet throwback. It makes sense to revive Soviet-style vocational training, which corresponds to apprenticeships in Germany, Switzerland and Austria, but the unmentioned critical concern is that Putins policies are forcing good, modern managers to emigrate.

When Putin talks about technology, it gets worse. Characteristically, he does not use Prime Minister Dmitry Medvedevs favorite words innovation or modernization. The only thing he wants to modernize is the defense industry. In Putins Russia, everything has to be done by the state: We must form a domestic demand for high technology. He wants to do so by using the system of state procurement and investment programs of the state corporations.

Naturally, Putins state must establish technological standards, measure them and control them. He sounded completely Soviet: I propose to create a system of statistical evaluation of the level of technology in various branches of the economy to obtain an objective picture of our competitiveness. In the Soviet period such a system worked, Putin said. It was liquidated, and nothing else was created. It is necessary to recreate it.

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Friday, Apr. 18

Teachers and students alike shouldnt miss the opportunity to establish lasting contacts with Russian and foreign institutions during the 21st Education and Career Fair at LenExpo, beginning today and finishing tomorrow. Learn more about education in Russia and connect with your fellow scholars.

The Tromso International Film Festival, Norways largest, brings a short festival to St. Petersburg for one day only during Scandinavian Oddities, starting at 7 p.m. today at Rodina Cinema Center. Tickets for the event are 100 rubles ($2.80).

Sunday, Apr. 20

Celebrate Easter at Pavlovsk during the Easter Fair that begins today and continues through next Sunday. Visitors will have the chance to paint Easter eggs and children can take part in games as well as help decorate a tree in honor of Christianitys holiest day.

Today is one of the final days to see the exhibit Cacti Children of the Sun at the Peter the Great Botanical Garden. Starting Apr. 17, budding botanists will marvel at the variety and beauty of the deserts most iconic plant.

Monday, Apr. 21

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Tuesday, Apr. 22

SPIBAs Breakfast with the Director event series continues as the association welcomes Andrei Barannikov, general director of SPN Communications, to the Anna Pavlova Hall of the Angleterre Hotel this morning at 9 a.m. Attendees must confirm their participation by Apr. 21.

The AmCham Environment, Health and Safety Committee Meeting is scheduled to begin at 9 a.m. this morning in the their St. Petersburg office.