Glazyev: Russia Girds for War Economy, Needs a “Sovereign Monetary System for Progress in Science & Technology”

Sergei Glazyev, one of Russia’s foremost economists who is also currently a top adviser to Russian President Vladimir Putin, told Bloomberg yesterday that Russia will respond to the escalating sanctions and economic warfare from the U.S. and Europe by strengthening national production and self-sufficiency, and creating a “sovereign monetary system… for progress in science and technology.”

In the interview, which Bloomberg published under the headline “World War on Russia’s Mind When U.S. Duels Over Ukraine,” Glazyev presents a clear picture of Russia’s current shift into what can properly be called a “war economy,” with a central focus on science and advanced technology as the driver of their physical economy. As such, it effectively neuters the various nightmare scenarios spun out in recent days by British Empire hatchet-men like Wolfgang Munchau of the Financial Times and Ambrose Evans-Pritchard of the Telegraph, of “crushing the Russian economy in weeks” by denying them access to the international payments systems, which “are the atomic bombs of financial warfare.

Glazyev told Bloomberg: “Task no. 1 is to block those threats to economic security that are now coming from the U.S., neutralize them by reducing the dependence of our external economic activity on the mercy of American politicians, whose aggressiveness threatens the entire world.

“What could serve as our chief response is the implementation of a plan for fast-track development of the Russian economy on the basis of a new technological order. This plan includes a transition to a sovereign monetary system underpinned by internal sources of credit, an active policy of innovation and support for progress in science and technology.”

Bloomberg adds: “To further insulate its economy, Russia should abandon the use of the U.S. dollar as a reserve currency, according to Glazyev. Russia, whose international reserves are the world’s fifth-biggest, need to diversify its holding to include China’s yuan, India’s rupee and Brazil’s real.”

Glazyev emphasizes the importance of Russian economic cooperation with China, noting, Bloomberg wrote, that “the U.S. is trying to grow stronger at the expense of others, thwarting integration across Eurasia and checking China’s clout.”

The wire goes on to state that, “[Glazyev] perceives the world shifting to a war footing. There’s a war waged against Russia with economic sanctions and military conflicts roiling Ukraine to Iraq, according to Glazyev.” There is also an “economic war” underway, including the current sanctions against Russia, but these will backfire, according to Glazyev. Bloomberg writes: “The trading bloc stands to lose about 1 trillion euros ($1.3 trillion), an estimate he [Glazyev] says includes the possible bankruptcy of several European banks and companies toppled after the cutoff in financial and economic ties. An energy crisis in Europe will bring a sharp spike in prices and a loss of competitiveness for European producers. Meanwhile, Turkish, Chinese and east Asian nations will fill the void left by the departure of their European rivals from the Russian market. The fallout will cost 250 billion euros for Germany alone while pushing the three Baltic states to the brink of an ‘economic catastrophe,’ he said. Lithuania and Latvia will lose the equivalent of half of their entire economic output, and the cost for Estonia will reach 50 percent more than its gross domestic product, Glazyev said.”

Bloomberg notes that the U.S. and EU measures against Russia “have done little more than harden a siege mentality in the Kremlin, thrusting controversial advisers like Glazyev to the forefront in Putin’s showdown against erstwhile Cold War foes.” His strategy is to build bridges with the international community to rein in America’s “aggressive, paranoid political leadership.”

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