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#11
Gref Program Viewed on Second Anniversary
Izvestiya
25 June 2002
[translation for personal use only]
Report by Andrey Kolesnikov: "Life After Gref"
Two years ago the government approved the "Gref program" -- a plan for the country's economic development through 2010 prepared to ensure the new president understood the direction in which the country should advance. Later a large government program and a whole cluster of medium-term programs were elaborated on its basis and the Ministry for Economic Development and Trade was instituted. And the man was not tailored to fit the ministry, the ministry was tailored to fit the man -- German Gref. A rare instance in political practice.
The "Gref program" was not broken down day by day, like the"500 days" program, but there was a quarterly and even monthly schedule of measures in tabular form. It was all ready for a long and happy life. But as usual life itself proved harsher. The program was forgotten and only the indolent would now fail to kick the Ministry for Economic Development for its unambitious or -- as a variation -- imprecise forecasts. The minister's political opponents have succumbed to Grefology just as in the past they were once obsessed with applied Chubays science.
The authors of the dream program, those reclusive theorists from Vatutinki near Moscow, are now managing the economy as practical experts. Oleg Vyugin is deputy chairman of the Central Bank, Arkadiy Dvorkovich is deputy minister for economic development, and Aleksey Ulyukayev is first deputy minister of finance. For a while German Gref was a symbol of the reforms and reached the career peak of any public politician -- he was burnt in effigy on Mayakovskiy Square. The young minister, decked out in the best suits and ties in Russian politics and seemingly tireless and enduring, was like his program -- correct, ambitious, and Westernized. But he was still unlucky. And even the president, who had looked into the future with the aid of the "Gref program's" telescope, is now increasingly finding his way in the economic sphere with the map of the unreachable Portugal....
You ask why for six months Russia's best economic brains agonized over the program and why the Center for Strategic Developments was created, why so much political energy was wasted on getting the program document approved if the fate of the long-suffering work has turned out to be the same as that of any other fruit of the labor of the government "programmers." Economic romantics and poets, the authors of fine and very necessary reforms, have themselves become pragmatists. They do not feel like reforms if all their titanic efforts come down to predict and calculating the price of oil, GDP, budget revenue and expenditure, the tariffs of the natural monopolies, and inflation. And the pension, housing and municipal, administrative, legal, military, and natural monopolies reforms have gotten bogged down in a web of political and apparatus compromise.
In this situation the very concept of forecasting becomes meaningless. Once again oil prices are the basis for calculations. And if you calculate that way then if for instance the pension reform is implemented and pension money starts working in reliable assets that are well managed there will be a certain degree of growth. If they do not start working there then we will lose a certain amount. If we manage to remove some administrative barriers on which bureaucrats' revenue is collected then money will be kept for the economy. How much money and what kind of growth will it provide?
Without considering all these circumstances the very concept of GDP loses any meaning and its parameters become an end in themselves. Perhaps it is better to take another look at the "Gref program" and calculate the effect? Everything in it is written extremely logically and very well. And, incidentally, growth indicators are far higher than the current realistic and predictable indicators. Ambitions were far bigger two years ago but they were based on the premise that reforms were actually proceeding in the country. But there are no reforms. So where does that leave the growth of the economy? Where is it to come from?
Life after the "Gref program" has obviously not been successful. The man for whom it is named is being asked seven times a week to answer the question: What percentage return will we have from this, that, or the other in a year, two years, or five years? Perhaps if the minister were not taken for an official Cassandra he would have time to resolve questions of substance? Then the basis for his forecast would be firmer than the price of a barrel of oil, exchange rate fluctuations, and the size of tariffs.
In the end we will not succeed in doing out sums so that all the financial-industrial and political lobbies are happy. A forecast is not a golden coin which will please everyone.
So far the "Gref program" has fallen into the same historical category as the "500 days" program. However, few people have noticed that the "500 days" program was fulfilled, albeit considerably behind schedule. Such is the logic of economic development. And a two-year-old program is very logical.
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