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Putin’s Top Economic Advisors Have Doubts About His Pet Project

Putin’s Top Economic Advisors Have Doubts About His Pet Project

(Bloomberg) --

If one of the aims of this year’s St. Petersburg International Economic Forum was to try to drum up support for President Vladimir Putin’s $400 billion investment plan, it appears to have fallen flat.

Participants of two of the forum’s most prominent economic sessions were asked to give their assessment on what impact the so-called National Projects will have on the economy. The overwhelming conclusion was that there’s no way the goal of doubling growth by 2024 can be met.

Putin’s Top Economic Advisors Have Doubts About His Pet Project

“When the patient is sick, giving him a lot of food might make it worse,” Andrey Sharonov, the president of the Skolkovo Moscow School of Management, said at the Sberbank Business Breakfast Friday. “The National Projects are spending, and spending without structural changes is at a minimum not very effective and, at worst, can do damage.”

Even the top officials responsible for implementing the project have their doubts. When First Deputy Prime Minister Anton Siluanov, central bank Governor Elvira Nabiullina and Economy Minister Maxim Oreshkin were asked to raise their hands at a Thursday panel if they thought increasing growth to over 4% by 2024 is achievable, they exchanged glances and didn’t budge.

Putin’s Top Economic Advisors Have Doubts About His Pet Project

The projects, which aim to boost spending across a range of sectors, are a key pledge of Putin’s current six-year presidential term and Russia’s main hope for reversing a five-year slump in incomes. The pessimism at the forum echoes similarly downbeat forecasts from economists and a recent government assessment that was said to find the majority of targets impossible to achieve.

When state-controlled Sberbank PJSC’s Chief Executive Officer Herman Gref asked attendees of the breakfast meeting Friday if the National Projects could help boost economic growth to faster than the global rate, 78% voted no. The only glimmer of optimism came when he tallied the anonymous votes of government officials separately. A majority of that group believed the plan would help the economy.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Natasha Doff, Tony Halpin

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