Battle of Economic Models: Moscow Against Washington and Beijing?
© Sputnik / Mikhail Klimentyev
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As the global economic landscape shifts, Russia is embracing a new model of national development, challenging the dominance of the Washington Consensus with its Moscow Consesus, which is close to what China or India do.
How many times did I say, in this column, that the post-war world had already arrived? In Russia it certainly has, at least it’s so for certain politicians and thinkers already searching for future economic and other directions. And here we have one more proof of that, namely, a model of national development called Moscow Consensus, as opposed to Washington Consensus and the one belonging to Beijing.
The concept have been authored by Mr. Boris Titov, a businessman and politician, also Russian President’s representative for communications with international organisations. Titov’s been known in domestic politics mostly by his founding of the Party Of Growth, that was making rather modest progress in several previous elections. Recently it has fused with yet another relatively young party, called the New People, that is actively preparing itself for a more prominent role in the post-war era in Russia and the world.
Moscow Consensus, Titov’s personal concept formulated several years ago, has been proclaimed The New People’s official economic program several days ago. That program is interesting as a sample of things to come rather sooner than later, things definitely not limited to Russia or its environs.
The concept of the original, that is Washington Consensus, is vague and shadowy. It’s basically a general agreement on the right things to do in all kind of national and international economic activities. If you don’t follow that orthodoxy, you won’t get loans from the International Monetary Fund (that is, if you need these loans). You also may encounter disapproval from debt rating agencies and economic pages of the most known international publications.
But the thing is, today that’s not the only consensus in town (or, rather, in global village), and other concepts have been successfully establishing themselves all over the world for at least two decades. Russia has only been one example of that drift away from the IMF orthodoxy.
Mr. Boris Titov was one of many political personalities openly talking about it for years, if not decades. That’s how he described the situation in 2018, when competing for the position of President of Russia:
Washington Consensus, he was saying, pressed the nation into being oriented to foreign markets, while squashing the domestic consumption by keeping salaries and social benefits low. You export cheap oil and gas, buy whatever you need using the revenue, keep finance on the tight leash and forget about own high technologies. That’s how everybody knows you are on the tight leash and do what you are told. Growth and development, in such case, will be just a dream.
Titov was by far not the only Russian angry with that kind of set-up. His ideas became almost universal, when, first, the Covid madness engulfed the world in 2020. The general Russian reaction was: if they try to impose such extreme measures on the whole world, then it means that something is broken out there, and the West cannot go on like before.
The Ukrainian crisis of 2022 only fastened people in that conviction, and Russia has broken up with Washington Consensus, probably forever, economically and politically.
But how about that thing Mr. Titov calls the Beijing Consensus? His idea is, there is too much of state-regulated business and development over there in China, and that model does not fit Russia.
So which one does? The thing Titov calls Moscow Consensus is, in fact, close to what China, or India, or many others are doing. That’s, first, about a need for technological breakthroughs in several spheres, with a lot of governmental support for it. And, second, it’s about maximum freedom for small and medium business, with almost free flow of investments into a leap forward.
At the looks of it, all these things look decidedly Trumpian and Republican. In fact, Mr. Titov’s party, when it was launched, had been called a Russian version of the US Republicans.
But that was long ago. While now the good old ideas of the now-extinct Party of Growth remind me of an old cowboy adage of the American Wild West: It’s better to spur your horse into the direction it’s going anyway.
Russia has a wartime economy by now, with unexpected growth, kick-started by the military industry. That process has, also, given birth to a surprising surge of hi-tech innovations. So, the first stage to Titov’s leap forward is already here. While unleashing the small and medium business’s enthusiasm only comes naturally after that.
Which means that Mr. Titov may easily lose his position of a lonely opposition guru (he, actually, has already lost it) and become just one of many folks with similar ideas. That happens to politicians all the time: at first people laugh at you, then they try to fight you, and then… Then they ask you: what’s the problem, we are in total agreement, so why do you claim leadership?
But then, the idea of that Moscow Consensus may lose its shine, first, because the Global Majority nations are not as state-regulated as some people may think. National development is not China’s monopoly, there are dozens of nations where the government is proclaiming economic priorities and stimulates the relevant effort. And, second, while Russia finalises its post-war development plans, something serious may happen to the good old Washington Consensus.
Or at least that’s what I think, watching America (and the world) getting ready for Donald Trump’s arrival to the White House in Washington. Why, may I ask, had that man been resisted some years before, while now that resistance is almost gone?
You just have to look at what happened to the gitterati of Washington. When Trump came to power the first time, in 2016, Washington’s beau monde linked arms against any top Trump officials seeking invitations to their homes, The American Conservative said. The region’s restaurateurs, though expected to serve everyone, vowed to make a night on the town for Republicans as unpleasant as possible. While now there is no Resistance to lock the Trump administration out of polite society. For better or worse, concludes the author, Trump will remake Washington, D.C. in his image.
I might be mistaken, but that capitulation of D.C. and America in general may well mean that the previous economic and political set-up has exhausted all its reserves.
After all, there are dozens of files in my dossier, dated this or that month of 2024 of much earlier, quoting serious economists stating that the current financial or generally economic system of the US has no chance of survival. So let that awful Trump have his chance of healing things that look hopeless.
And then, maybe, there’ll be no Washington Consensus anymore, even in its current diminished form. All the global economy will be very Trumpian, whatever that means.
Dmitry Kosyrev is a Russian writer, author of spy novels and short stories. He also did columns for the Pioneer and Firstpost.com
