Showing posts with label Military Industrial Complex. Show all posts
Showing posts with label Military Industrial Complex. Show all posts

Wednesday, September 26, 2018

About Some Interesting News.

Vice Premier, former General and Ph.D in engineering, who today oversees Russian military-industrial complex, Yuri Borisov dropped an astonishing number which gives a little insight into the Russian machine-building complex and the general trend of Russian economy. At the all-Russian conference of the young scientists and specialists "The Future of Russian Machine Building", which was organized by famed (especially among Western intelligence services) Bauman's MGTU he stated this:  
Translation: A number of employees needed at the enterprises of Russian military-industrial complex is around half-a-million. This is a whole army, around 50 new professions are in demand. We are working on changing the trend of the cadres. We are concerned about the quality of this people, who will be capable to provide for the breakthroughs Vladimir Putin spoke about in his March address.  

Think about it: half-a-million just for the military-industrial complex. Boy, I wonder what all those lawyers, journalists, managers and other philosophy majors in Russia feel. I am being facetious, of course--I know exactly what they feel, some of them may even understand what is going on. After return of Crimea home, in 2014, on the wave of incredible patriotism and enthusiasm, in the anticipation of the Western sanctions, there was understanding among people who actually know Russia, which, in different forms, was worded like this: Russia doesn't need office plankton, she needs engineers, designers, CNC operators and programmers. I may add here: Russia needs tool and die makers, operators of complex computers-driven machinery, she needs composite materials and structures specialists and the list goes on, and on, and on. In all, Russia needs modern, cutting edge productive forces. And this is just Russian MIC. To illustrate: just today news of Egypt signing $1.3 billion contract with Transmashholding for hundreds of modern rail cars have made it to media (in Russian). It is 5 years worth of work for thousands upon thousands of highly qualified and well-paid labor.

You may have already guessed, that this purely civilian contract will require primarily electricians, mechanics, CNC operators, systems integrators--you name it. It will not require political "scientists", "economists" (especially with "degrees" from something like VShE), I know, my daughter got her BA in economics from UW and European (Milan) School of Economics. Let's put it this way--for what she does for living she needs only paper on her degree, the rest... well, I'll abstain. Transmashholding is a massive company and it is a civilian one. Russian MIC's contracts are on the order of magnitude larger. So, here is the deal--a generation, in fact-two, of Russians of 1990s and immediately after that, who I call the children of chaos and many of whom are either entering adult life or already are in the age category of 30-35, suddenly face a dilemma: what to do with their lives, especially if many of them went for so called "humanities" education or abstract economic degrees. I have news for them--virtually nobody is hiring them in Russia. As Russian joke goes: why one needs an economic degree? To shout in English, "this cash register is available" in McDonald's or Burger King.    

These people are victims (many innocent, others--not so much) of one of the most pervasive and malignant myths excreted by Western economic "science"--an idea of post-industrial economy. A utopian future in which well-paid and well-dressed office plankton, populating all those comfortable offices in skyscrapers strategizes, conceptionalizes, rationalizes, what have you, with the help of computers and robots, in their relentless effort to "improve" the world and get filthy rich while doing so. This si precisely a category of public which worships Elon Musk and forms lines at the Apple stores on the eve of a new model of their godly gadget released for the consumption of mindless hipsters. Obviously very few of them have any clue on what modern manufacturing, yes, robots and computers included, is. Well, we all know what happened with US economy, don't we? I am not going to get deeper into this issue, but Russia almost ended the same way, that is until so called "liberal" (more like libertarian) ideas sustained huge metaphysical defeat and economic sanity started to slowly filter back, with Russian industries not only recovering but prospering in the process, even with non stop (it is the 60th since 2011) avalanche of Western economic sanctions. 

And here is the main point. Putin reads from the Soviet book of industrialization. Those who have weak nerves or too impressionable, or studied Russian history from Solzhenitsyn or Anne Applebaum (or R. Conquest) should stop reading now and go to some other website or blog. Now I continue. Let me quote myself from the draft of who knows what (wink, wink):  
New Deal pre-WWII America was still a nation which had to deal with a 1937-1938 recession which dropped industrial production catastrophically by 32%, GDP Contacted 10% and unemployment remained prohibitively high at 20%. The United Sates were simply in a very bad shape. It was WWII, in the end, which resolved the issue of much needed real recovery from the Great Depression. The recovery was spectacular: by 1942 the output grew by 49% fueled by the steady inflow of gold from Europe, including from the Soviet Union, and by military buildup. Full employment was achieved.
You may verify my data here, after all it is by none other than Federal Reserve very own history specialists. Let us recall now, what was happening in the Soviet Union at that time. Easy--unprecedented economic growth, which made country ready for the war. All that growth was achieved in a real industrial and agricultural sectors, not in breeding philosophy professors, managers of expensive boutiques and shopping consultants. So, I am kinda wondering, before I go, why Maxim Oreshkin, himself a product of utterly liberal VShE suddenly goes very public on record with being dissatisfied with the (slower than planned) speed of Russia's dedollarization. Of course, parallels with Stalin's Industrialization are very tentative--modern Russia is a different country but real Re-Industrialization is what Russian people were calling for since Vladimir Putin emerged from his incognito status as Russia's statesman whom Russian people started to believe. 

To Be Continued...

Friday, April 29, 2016

Lavrov On Sanctions.

Yesterday, Russian Foreign Minister Sergei Lavrov in his interview with Swedish newspaper Dagens Nyheter in Moscow was very explicit about Western sanctions:

Foreign Minister Sergey Lavrov’s interview with Swedish newspaper Dagens Nyheter, Moscow, April 28, 2016  


Question: Is there any hope that the sanctions will be lifted?


Sergey Lavrov: I was just going to tell you that we rely solely on ourselves now, and we have all we need to do so. Thankfully, the Lord and our forefathers have left us a self-sufficient country. Now we will be working hard to replace the products we used to import from other countries. This is our strategy. This does not mean isolation or a closed economy. And if one day our Western partners decide to return to their normal policy, it would give us additional opportunities for growth and developing cooperation. But in essentials, we are only going to rely on ourselves from now on.

I wrote about it in this blog many times. I will repeat it again: Western sanctions were the blessing in disguise for Russia. While Obama was boasting that Russian economy was, thanks to him, in tatters,  Russian economy was actually retooling itself. Yes, even uber-liberal Medvedev's cabinet recognizes that all this monetarist mambo-jumbo is just that, the real economy is in the REAL sector of economy, the foundation of which is manufacturing. When even Bloomberg begins to suspect that Obama lives in the parallel universe when dealing with Russia, this speaks volumes. 

While many in the West were dismissive of Russian "importozameshenie" (import substitution), the reality of it was very different from what Wall Street understands as economic development, that is defrauding markets. All those Wall Street "analysts", as always, missed the most important economic fact of Russia--look at the Military Industrial Complex first and only then try to view what is behind it. For some guy with Ph.D in economics from Ivy League it could be an insurmountable obstacle to understand that real, in all senses of this word, economy lies with (again) enclosed technological cycles, it lies with manufacturing of strategic products: planes, rolling stock, processors, machining centers, electric machines, nuclear reactors, scientific instruments, MRI and X-Ray machines and...weapons, weapons and, again, weapons. For a real professional, a single look at and inside Armata tank, Su-35C or SSGN of Project 885 (Severodvinsk-class) will tell more about the real state of Russian economy than looking at BS graphs (most of them rigged anyway) of some piles of abstract economic and financial data from Wall Street. Apart from that, it is manufacturing which creates in European peoples the sense of self-worth, in the end--we just love to create, make things, be it machining centers or space ships. That's what sets us apart and that's what makes us who we are. 

Then comes the question, was import substitution a success. Not as successful as it was expected to be, after all Medvedev and his cabinet is a collection of headless monetarists, while Medvedev, who is a lawyer by trade, goes in Russia by humiliating moniker iPhonya--hardly the type of people who know how to run any real business of manufacturing. Yet, import substitution is by no means a failure, not even close. Consider this: Russia started production of the latest advanced diesel engine and diesel generators. This is huge, since this opens the road to not only independently completing series of Project 20380 (20385) corvettes but also will have a major impact on Russia's shipbuilding industry--both civilian and military. If not for sanctions, this and very many other projects would have never been started. Today, Russia produces the line of most sophisticated machines which ranges from MRI diagnostic centers, CNC machining centers, microprocessors, jet planes and, well, space ships. Many of these advances come today by the way of Military-Industrial Complex and fields associated with it and it is being done much more efficiently than it was done in USSR. Technologies and materials which are being developed in MIC find their way into civilian and purely consumer fields. 

Russia's internal market, its demands are such that import substitution and developing of domestic producers is a natural path for Russia, which also corresponds well with what is going on in the US in terms of slogans--Trump's making America great again can not come without restoration of the US manufacturing base and that means tariffs and good ol' economic nationalism, especially in the field which matters MOST--for financial analysts, if any, who read this text it is time to either step away from monitor or take something which will prevent them going apoplectic--MACHINES and everything they entail. No machines, no real economy--it is an axiom and I, and not me only, don't care what Moody's credit rating is given nor what is the capitalization of such BS as Facebook or Apple (what's next for iDiots--3D time and life wasters with their useless toys?), without machines--no civilization. We, as a people are in dire need to build things which make us proud, from computers to jet airliners, to space ships. Without it, without grand technological ideas we are nobody, stuffed in our cubicles in some real estate or financial office totally removed from seeing the results of our ideas, inspirations, creativity and labor. Even some green peaceniks are getting it. 

       
 
Sanctions should stay in place;-)