19 trillion rubles will revive Russian economy
19 trillion rubles need to be allocated in order to revive the economy of Russia and bring it to the level of 2013, presidential adviser Sergei Glazyev said at the IFN CIS Russia Forum 2016.
"During the last two years the Central Bank has withdrawn about 5 trillion rubles from the banking system. Western creditors took about $200 billion back. The volumes are not enough today in comparison with the economic activity three years ago,'' Gazeta.ru reports.
Associate Professor of stock markets and financial engineering at RANHiGS, Vasily Yakimkin, said in an interview with a correspondent of Vestnik Kavkaza that "Glazyev was right in many respects."
"We need to create strong and exuberant liquidity in order to make interest rates on loans lower, especially for the processing industry, because its profitability is about 7-8% now. Therefore, it is necessary to have interest rates at the level of 4%, or a maximum of 5%. If the interest rate is higher, then business becomes unprofitable and uninteresting. According to some estimates, we need about one and a half trillion rubles every year for 10 years. That is about 15-19 trillion. These figures are comparable. In general, I agree with him," the expert said.
In addition, it is also necessary to "liberate small and medium-sized businesses" to restore the former economic activity. "You need to have normal taxes, eliminate any administrative pressure, and if a entrepreneurial business develops well, it is necessary to help it in every way and provide preferential loans and so on. Vladimir Putin has recently met with the economic bloc, but they mainly discussed lending to the public sector with low interest, as well as small and medium-sized business. I think that they should focus on these sectors for simple reasons: they are more mobile, there is a speedy return,'' the economist said.
"That is why I think that the development of small and medium-sized enterprises, and stimulation of innovative processes should become the focus. We should turn our faces to the real sector of the economy, which is engaged in innovation, and encourage it with the help of the ruble," Vasily Yakimkin concluded.