Thread by @Prune602

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“The Bank of Russia Congress discussed systemic problems of the Russian economy”

And they said many of the same things I’ve been warning you about, and that Elvira has warned about previously & the government has ignored!

kommersant.ru/doc/6806473

There was a gathering in St. Petersburg where many came to talk.

Elvira Nabiullina (head of the Central Bank) basically told everyone that they need to work on fixing the root causes of problems instead of quick (and damaging) fixes/coverups

Oleg Deripaska pointed at the problems with Russian Railroads. As I have pointed out before, the railway is overextended and a huge limiting factor in terms of growth

Elvira Nabiullina pointed out that there were a lot of problems that weren’t fixed before.

And because Russia ‘didn’t make hay while the sun shined’ those problems are becoming a bigger issue now

“According to her, structural changes in the economy cannot be responded to with anti-crisis measures alone. At the same time, key systemic changes have been postponed before, including ensuring the protection of property rights, increasing labor productivity,…”

“…and solving demographic problems. Now, the number of constraints on economic development has been supplemented by a shortage of labor, problems accessing technology, and a shortage of resources for investment. "Distributing cheap loans will not solve this problem,"”

🎯

As I have said before, the things the Russian government has done to the international business community AND to the DOMESTIC business community INCLUDES investors has been deeply unpopular.

The nationalizations & company seizures, etc have made people stop investing capital.

Why would you invest free capital into something the government might just take away from you again? Theres no incentive.

Also everyone is mad at you too. And since you already did it, and continue to do it, how will you reassure them you won’t do it again?

“Sberbank CEO German Gref drew attention to an “external” factor for business — institutional protection of property rights. “Will these institutions protect the rights of every owner or will they be focused only on state property? We are now at such a crossroads,” he noted,…”

“…“If the rules of the game are clear to everyone, and there is competition in the economy, then the rest is an applied problem.””

This is the other problem, the rules can change unexpectedly & without warning.

That’s how the Ministry of Finance “found” that extra 2023 revenue

VTB CEO Andrey Kostin: "Investors need to be motivated to stay in the country, unclaimed funds are already starting to look for use - some in China, some in Arab countries."

And how are you going to do that?

VTB CEO Andrey Kostin: "Nothing should be taken away, nationalized without need, it doesn't even matter that taxes have increased, the main thing is that owners can reliably invest their funds,"

Too late

I’m going to remind you of this speech Putin made.

https://twitter.com/prune602/status/1783643415130902616

And they’ve kept nationalizing stuff

https://twitter.com/prune602/status/1783643426069545005

And nobody clapped for Putin, because they don’t believe him. And they were right not to believe him.

How do you reverse course on this?

https://twitter.com/prune602/status/1783643444696523022

“Oleg Deripaska…complained about the logistical difficulties of entering the markets of the Global South: the speed of rail travel in the eastern direction does not exceed 40 km/h, "everything from the Urals to Irkutsk is at a standstill - a traffic jam for months."”

YUP!

Like so many things, it’s not like these problems are unknown. The some of railway problems were known before they invaded Ukraine. They did it anyway!

https://twitter.com/prune602/status/1797451610840543732

They totally knew.

https://twitter.com/prune602/status/1797453531718512688

Elvira warns them, other people warn them but they don’t fix the problems! So EVEN IF they all point out where the issues are, they STILL may continue what they’re doing, making the problem worse

AND paying people to say everything is great 👍