Past and thoughts.

The title of the article is in no way a claim to the glory of Alexander Ivanovich Herzen — it is just a coincidence.

«Protection Technologies» is the name of the magazine and the focus of the materials published in it. But there are not only technologies for protection against theft, attacks and other disasters of a local scale — there must also be technologies for protection against economic shocks of a global or at least national scale. We will not use the word «crisis», as our Prime Minister advised us to do, although what is going on in many people's heads cannot be called by any other word. I will share some thoughts that are somehow connected with the reality around us. At the same time, I will immediately make a reservation: I have never been a professional economist, so everything stated below is purely subjective.

1998 and 2008
As you can see, exactly 10 years separate us from the default of 1998, but it already seems like an eternity. Although, if the situation continues to repeat itself every 10 years, it will be too much… Is there anything in common between the events of ten years ago and today's problems, and can we use that experience today? I'm afraid not. The reasons are too different, the conditions are too different. Therefore, we must cast aside memories and live in the present. In 1998, we had an ordinary bankruptcy of the state, and against the background of relative prosperity in the rest of the world. Now, on the contrary, our state has begun to gain strength, but external conditions are beginning to sharply slow down this process. Even without being a member of the WTO, we are still part of the global economic system and, apparently, will never be able to live in our own closed world, as was the case during the era of the Iron Curtain. In 1998, there was a large public debt, but the still very young business was relatively independent from abroad. Currently, Russia has no national debt, which is very encouraging, but a huge number of enterprises have foreign sources of credit, and the problems of the global financial system directly determine the viability of many of them.
Another problem is that our state savings are partially placed abroad, and again, in today's conditions, the possibility of using them to support our market is very doubtful. History, as we know, develops in a spiral, and each new turn has its own characteristics, although it is desirable to learn lessons from history.

He who did not have time is late
The years of development after the default of 1998 were, in my opinion, not used productively enough. Much more could have been done both on a national scale and within each enterprise. The state got carried away with energy trading, fortunately the prices for them contributed to this, but it did too little and too slowly to diversify our economy. Yes, raising our microelectronics from the ruins was and remains an extremely difficult and expensive undertaking. But there are still many other industries and entire sectors that could develop much more dynamically — if the sovereign willed it.
For manufacturers in our industry, the greatest benefit would be a radical change in customs legislation. It should be brought into line with world standards, when exports are more of a notification nature than a permit nature (in our case, they are even more of a prohibition nature). There would be no need to stimulate our manufacturers with financial injections – it would be enough to give the green light to export high-tech products – and the process would go on its own.
The discussion of export problems has become a pain in the ass, especially the registration of papers for each batch of identical goods confirming that they are not dual-use products. I wonder: are the registration rules the same for oil? Who can prove that this oil will not be used to fuel tanks and combat aircraft?
Yes, despite all the obstacles, some manufacturers of security equipment still manage to export their products, and in the context of declining sales in Russia, this may help them at least a little.
Without investing in high-tech production, but only opening this street for unimpeded movement by simplifying procedures and abolishing all taxes and duties on the export of such goods, the state would help to significantly increase the volume of exports. After all, it is no secret that domestic products are absolutely competitive on the foreign market. And learning how to obtain CE certificates or any other is not a big problem, especially after going through various formalities in your home country.
Now, when the state's resources will be spent rather than replenished, perhaps it is not the best time to make concessions for high-tech exporters, although… The amounts are not astronomical at all against the background of the total volume of budget revenues. Or maybe, on the contrary, while everything is still relatively good, it is precisely the growth of exports in the non-raw materials sector that needs to be urgently stimulated?
We are not asking for fish — we only need a fishing rod, and we can catch some ourselves, and we will also help the state. At least by increasing the number of jobs.

Oh, the roads…

Everyone is preparing to meet difficult times for the economy, each in their own way. Naturally, everyone can do it differently, and everyone has their own forecast for the development of the process. Some even began to cut staff in advance, some have already been hit by this roller and have begun to delay salaries. In mid-November, the percentage of non-payment of salaries, instead of 2% at the beginning of the year, has already reached about 30%. It seems to me that large companies, which have a significant amount of borrowed funds, were the first to suffer.
As often happens, the real facts do not correspond to our wishes or assumptions. Everyone has heard about the Sukhoi Super Jet 100 project, our new civilian airliner, which is expected to be widely sold both in Russia and abroad. It is to be manufactured at the plant in Komsomolsk-on-Amur. So why did they fire more than 700 workers at this plant in November? And where do they plan to recruit them when contracts for the supply of these aircraft begin?
Small companies (as follows from the periodic exchange of opinions at meetings) are feeling a little better for now, but the question is: for how long? The average predicted duration of the economic depression that has begun is about one and a half to two years, and not all of them will have enough internal resources accumulated during the growth period.
At the same time, one should not delude oneself with hopes that anything will become cheaper, except for oil. The workforce, especially skilled labor, cannot become cheaper, because the standard of living of workers is not very high, and the promised increase in housing and communal services and electricity, along with the stable growth of food prices, does not allow the standard of living to fall to the poverty line. Otherwise, people will simply stop doing their business, and, as in the initial period of perestroika, many Snickers sellers with higher education will appear.
Some people hope for a reduction in rental costs: they say that companies are laying off people, some are simply closing, and space is being vacated, which means it should become cheaper. Forgive me, but first of all, the first to become vacant will be class A offices, in which practically no one lives in our market. Migration to cheaper ones, which we occupy, will begin, i.e. demand for our space will begin to grow – how can prices fall here! Secondly, the costs of office space owners are far from what they were several years ago – the cost of operation has increased several times. Plus the need to find resources with the reduced availability of loans to continue new construction projects, because life has not stood still, and we were caught almost by surprise not at a bivouac, but in the process of active construction.
Paradoxically, today the devaluation of the ruble is beneficial to us, since our costs are almost all in rubles, and we need to compete with products that have a fixed price in foreign currency (I mean imported goods). In production, the share of foreign currency costs is very small — this is only imported components, which do not constitute the main part of the cost of security system equipment.

Optimism or pessimism?
There is an old parable. They ask: what is the difference between an optimist and a pessimist? Well, the pessimist says that it is so bad, so bad – it can’t get any worse! And the optimist says – it can! If you approach it from this position, then I definitely consider myself an optimist. And this means that now is too early to panic and make sudden moves in any direction. Most likely, the model for further developments in the world, and especially in our country, will become clear no earlier than the spring of next year. And now there is time to think and calculate all the options for behavior for different scenarios.
The most important thing that should never be forgotten is that any crisis is like opening a sore abscess. Yes, there will be many innocent victims, mostly among the poor, and especially among our pensioners – they pay for someone else’s sins their whole lives, but never their own. But at least we will bring into line something that has become simply irritating. For example, Moscow has long since surpassed almost all capitals in terms of cost of living, including Tokyo, which held the lead for a long time. At the same time, in terms of livability, the same Moscow (according to many criteria, including cost of living, level of medical care, education, safety, etc.) is somewhere in 140th place, sharing neighboring places with African and Asian countries. By the way, we have already surpassed Tokyo in population density – and this is despite the fact that in Japan there is practically no land for habitation, and in the Russian expanses more than 90% of undeveloped land.
Maybe (if the treatment is not too intensive) the level of salaries and the cost of real estate will at least approach European countries. While on a business trip to Budapest in the spring, I learned first-hand that the cost of equipped production space in this city is only 80 euros per square meter per year (almost the same as in the not-so-close Moscow region), and the cost of an engineer is from 800 to 1000 euros per month.
I hope that it will not be worse than the default of 1998. Then we were simply robbed through banks that went bankrupt almost simultaneously. On the other hand, we have already begun to get used to some stability, and everyone made their plans mainly against this background. Well, we will have to adjust the program of action, give up something not so important and still move forward.