HCB Chapter 1363 Shock therapy!
Chapter 1363 Shock therapy!
Yang Ming knew that Yang Shuhai had feelings for Yang Jirong and his wife and him.
This feeling is not because of his money and status.
It's about blood ties.
However, Yang Ming's own situation makes it impossible to go back often. Yang Jirong and his wife can still visit their hometown occasionally.
The day after tomorrow is New Year's Eve.
At this time, the Yang family not only sent out invitations.
Linde Chung has already started preparing for this year’s New Year’s Eve feast.
At the mid-level villa in Repulse Bay, Yang Ming had already begun to feel the atmosphere of the Spring Festival.
. . .
1
The twenty-ninth day of the twelfth lunar month.
Li Jun, who was far away in Moscow, the country of goose, came back.
Arriving in Xiangjiang at around ten o'clock that morning, it was Lin Dezhong and his bodyguards who went to pick up Li Jun in person.
Repulse Bay mid-level villa.
Li Jun had already taken off his thick coat. He found that it was much more comfortable in Xiangjiang. The main reason is that the weather in Xiangjiang is much warmer.
It's still freezing and snowing over there in Moscow, but here in Xiangjiang, the temperature has risen to more than 20 degrees Celsius. How can it be uncomfortable?
"What's Moss like now?"
At the end of December, Sulian had been officially disbanded and disappeared, replaced by the new Goose Kingdom.
Of course now it is Ye Liqing who comes to power.
However, it is only more than a month or even less than two months apart from December, but the impact it has brought to the world is indeed very large.
Even now, many people from Goose Country and some people from other countries can’t understand why the good Red Empire disappeared?
Of course, the current Commonwealth of Independent States is completely different from the former Goose Country.
"It's still very chaotic. There is a shortage of food, including milk, bread and other foods. At first, Europe and the United States said they would provide it to the Goose Country. However, after the Soviet Union collapsed, Europe and the United States gave up their previous promises."
In fact, this is inevitable.
For Europe and the United States, they just let the goose country take the bait first. Since the goose country has taken the bait, it is naturally impossible to feed the fish bait again.
In addition, the promises that were made well in the past are no longer acknowledged.
Although the current Goose Kingdom has inherited most of the Soviet Union's legacy, it is in a time of internal and external difficulties. In addition, Chechnya and other forces in the Goose Kingdom have also begun to be different.
The most important thing is that there is a big problem in the economy of Goose Country.
In fact, after Gore came to power, the planned economy of the Soviet Union has been thrown into chaos, and private enterprises have not yet developed.
However, Yang Ming thought that the shock therapy that Goose Country quickly implemented was the most terrifying.
1. Goose Country became independent and inherited most of the former Soviet Union’s family fortune. The rich inheritance made Ye Liqing happy, but it was difficult for a poor family to survive. A large number of half-dead enterprises, plus 1 trillion rubles of domestic debt and 120 billion US dollars of foreign debt, also made the new master sleepless and restless.
As an opponent of the former Soviet Union, Ye Liqing believed that the reforms since the 1950s were piecemeal and patchy, ruining the future of the Soviet Union in vain.
He decided to learn from the painful experience. Goose Country should avoid repeating the same mistakes and regain its glory as a great country. It can no longer be an old lady with small feet. It should take drastic measures and carry out profound changes.
At this time, Gaidar, who was only 35 years old, succumbed to his wishes and concocted a set of radical economic reform plans under Sachs's guidance. Ye Liqing had a "smart eye" and promoted him to the number two position. The reform of the model has been fully rolled out in Goose Country.
The highlight and first step of shock therapy is to liberalize commodity prices.
The national government stipulates that the price of means of production will be liberalized from 1 to 80%.
At the same time, restrictions on income growth were lifted, salary increases for public employees were raised to monthly subsidies, and unemployment benefits were also increased.
In the first three months of price liberalization, the effects seemed to be immediate and obvious.
The long shopping queues have disappeared, and the shelves are full of products. The people of Goose Country, who are used to waiting in long queues for ticket-based shopping, seem to have seen the benefits brought by the reform.
But not long after, prices soared like a kite with its string broken. By April, the price of consumer goods was 15 times higher.
Russia originally wanted to use state-owned stores to stabilize prices. Unexpectedly, black market vendors colluded with state-owned store employees to resell the goods and make huge profits. The government's wishful thinking failed, and the market order was thrown into chaos.
Due to the premature liberalization of fuel and raw material prices, corporate production costs have increased sharply, with prices rising 14 times. Such high prices have discouraged buyers. The consumer market continues to be sluggish, and weak demand has in turn suppressed supply. Companies have reduced production one after another, and market supply and demand have Entered an infinite loop.
In the second step of shock therapy, fiscal and monetary "tightening" policies and price reforms were introduced almost simultaneously. Fiscal austerity is mainly about increasing revenue and reducing expenditure, increasing revenue and reducing expenditure.
All tax incentives will be cancelled, and all goods will be subject to a 28% value-added tax, and a consumption tax on imported goods will also be imposed.
In conjunction with the revenue-raising measures, the government has cut public investment, military spending and office expenses, incorporated extra-budgetary funds into the federal budget, and restricted local governments from using bank loans to cover deficits.
Tightening monetary policy includes increasing central bank loan interest rates, establishing a deposit reserve system, and implementing loan limit management to control money flow and curb inflation from the source. However, this time Zheng Fu miscalculated again.
Due to excessive tax burdens, corporate production has further shrunk, and the number of unemployed people has surged. The government has had to increase relief subsidies and direct investment, and the fiscal deficit has risen instead of falling.
The tightening of credit has caused serious shortages of working capital for enterprises, and enterprises have defaulted on each other, causing triangular debt to become increasingly serious.
The government was forced to relax monetary policy, 1 trillion rubles, 1 times.
Amidst the roar of the money printing press, fiscal and monetary tightening policies failed.
The third step in shock therapy is large-scale privatization.
Gaidar believes that the reason why reform is full of dangers and crises is that state-owned enterprises are not market players and the competition mechanism does not work. Price reform is like building a tower in the sand. It will collapse when it encounters any disturbance. In order to speed up the privatization process, Zhengfu initially adopted the method of giving away free of charge.
According to the evaluation of relevant experts, 1/3 of the total state-owned property value of Goose Country is about 1.5 trillion rubles, and the population is exactly 150 million. In the past, property belonged to everyone, but now it is distributed to individuals, and everyone must be honest and independent. share.
So every Goose countryman received a 10,000-ruble privatization security, and could freely purchase shares based on the certificate.
However, by the time privatization was officially launched, the situation had already changed. At this time, 10,000 rubles were only enough to buy a pair of high-end leather shoes.
Therefore, this measure has caused a large number of state-owned enterprises to fall into the hands of the privileged class and the nouveau riche. What they care most about is not the long-term development of the enterprise, but to resell it for profit as soon as possible. The employees neither receive dividends nor have the right to participate in decision-making. At this time, no one was paying attention to production and operation, and corporate efficiency was deteriorating. 1 Erzhengfu was disbanded.
The failure of shock therapy almost reduced the GDP of Goose Country by half, and its total GDP was only 1/10 of that of Country M.
The economic structure has also undergone significant changes. The fuel, electric power and metallurgical industries have become key sectors of the national economy, accounting for approximately 15% of GDP, 50% of the total industrial product structure, and more than 70% of exports.
The labor productivity of the actual economic sectors is extremely low. If the labor productivity of the raw materials and energy sectors is close to the world average, other sectors are far lower than the similar indicators of country M by 20% to 24%.
More than 70% of production equipment has a service life of more than ten years, which is twice as high as that in economically developed countries. This situation is a direct result of the significant reduction in domestic investment, especially in real economic sectors.
Foreign investment is unwilling to enter Goose Country, and the total amount of foreign investment absorbed is only US$11.5 billion. An overall reduction in science and technology development expenditures, insufficient investment, and insufficient emphasis on innovation have resulted in fewer and fewer products with competitive prices and quality in the international market. Especially in the civilian technology product market, they have been squeezed out by foreign competitors. , domestic goose products still account for less than 1%.
Residents' living standards have plummeted.
By the end of 2000, the total monetary income of people in Go was less than 10% of that of people in M, and their health conditions and average life expectancy were also deteriorating. Some experts estimate that it will take 15 years for the country's per capita GDP production to reach the level of Portugal or Spain, and to maintain an annual GDP growth rate of 8%.
"If the skin is gone, the hair will not be attached."
"Shock therapy" copies other people's practices, completely deviating from the national conditions of Goose Country, and failure is inevitable.
This is the most essential mistake made by the country's democratic reformers during the country's economic transition.
Giulietto Chiesa, an Italian who spent nearly 20 years as a journalist in Moscow, commented: “It’s because the country’s democratic reformers ignored the country’s own traditions and characteristics and lost the spirit of the country. , copying and copying neoliberalism and modern monetarism that are also controversial in the West, and the result is that Goose Country has fallen into the disastrous situation it is today.”
Historically, due to the failure of reforms, Gaidar of Goose Country had to resign.
Ye Liqing was also forced to announce in 1 article that he would abandon the "shock therapy" reform, and in 1 article it was wrong to try to copy the Western economic practices in the reform."
In fact, the medical term "shock therapy" was introduced into the economic field by US economist Sachs in the mid-1980s.
Shock therapy was first proposed when Sachs was hired as an economic adviser to Bolivia.
Bolivia is a small, economically backward country in South America. Due to the long-term turbulent political situation and the government's continuous mistakes in economic policies, the resulting economic problems have accumulated in large quantities but have not been resolved, eventually leading to a serious economic crisis.
1 The budget deficit amounts to about 1/3 of GDP, and the inflation rate is as high as 24,000%.
100 million US dollars, the interest payable is nearly 1 billion US dollars, which exceeds the export revenue. During this period, residents' living standards dropped by 30%, and the national economy was almost on the verge of collapse.
It was precisely in the face of such a dangerous economic situation that Sacks, who was employed at the time of crisis, boldly proposed a set of economic programs and economic policies. The main contents were: implementing tight financial and fiscal policies, reducing government spending, canceling Subsidies, liberalizing prices, implementing trade liberalization, stabilizing the exchange rate through currency devaluation, further reforming the administrative and tax systems, privatizing parts of the public sector and enterprises, rescheduling debt and accepting foreign aid, etc.
Since the implementation of this set of economic programs and policies has a strong impact, it may cause huge shocks to the economic life of the society in the short term, and even lead to a state of "shock". Therefore, people use medical terms to refer to Sachs The set of economic programs and policies proposed to stabilize the economy and control inflation are called "shock therapy."
In summary, shock therapy is aimed at the serious imbalance of total social supply and demand. Starting from controlling total social demand, strict administrative and economic measures are adopted to forcefully and significantly reduce consumer demand and investment demand in a short period of time, so that the total social demand will be reduced. Supply and demand achieve an artificial balance to curb hyperinflation and restore economic order.
This kind of policy regulation has an obvious emergency nature.
Because the balance of total social supply and demand requires not only controlling excessive social total demand, but more importantly, stimulating the effective growth of sluggish total social supply.
The practice of macroeconomic operation proves that the former is easy to achieve in a short period of time, but the latter requires a long time and great efforts to be effective.
Since the regulation of shock therapy focuses on the general needs of society, and the implementation of measures is relatively intensive, it is easy to achieve immediate results.
This is the secret of the miraculous effect of shock therapy in Bolivia, and it is also the essence of the original meaning of shock therapy. The difference between "shock therapy" and the gradual approach lies not in the content and goals of transition, but in the sequence and intensity of reform.
Specifically, in terms of macro policies, "shock therapy" requires more stringent fiscal austerity; in terms of economic liberalization, "shock therapy" advocates taking a one-step approach to achieve liberalization of prices, foreign trade, and free currency convertibility; in terms of private In terms of economic development, we emphasize rapid realization and do not hesitate to adopt free distribution methods for this purpose.
With the joy of winning the first battle, Sacks excitedly came to the Goose Country and Eastern European countries that had just undergone drastic changes, and continued to sell his shock therapy.
However, this time the shock therapy he peddled has a new meaning compared with the original one, that is, in addition to completing the conventional mission of stabilizing the economy, suppressing inflation, and eliminating the foreign debt crisis, it must also shoulder the important task of completing economic transition.
Sachs summarized the shock therapy he peddled this time into three transformations, namely stabilization, liberalization and privatization.
The so-called stabilization means to quickly curb hyperinflation, restore economic order, and stabilize the macroeconomy through strict contractionary fiscal and financial policies and a series of mandatory measures to suppress total social demand.
The so-called liberalization refers to the liberalization of prices through "one-step price reform", the liberalization of foreign trade through the abolition of state monopolies on foreign trade, and the liberalization of foreign exchange through the abandonment of foreign exchange controls and monopolies.
The ultimate goal of implementing price, foreign trade and foreign exchange liberalization is to activate the market mechanism to the maximum extent so that it can play its due regulatory role in social and economic life.
The so-called privatization is to privatize the state-owned economy through the reform of property rights systems such as return, sale, lease, and shareholding reform, and ultimately shape and establish the main body of the market economy.
Sacks believes that only by adopting this shock therapy, which includes the three modernizations, can China and Eastern European countries successfully complete the transition from a planned economy to a market economy in the shortest possible time.
Russia and other countries in Eastern Europe showed extremely strong interest in the alluring shock therapy peddled by Sachs. They all invited Sacks to serve as government economic advisers to these countries and participate in the formulation and implementation of shock therapy. Most countries in China and Eastern Europe have eagerly implemented shock therapy.
In fact, Yang Ming already knew that at this time, Russia and even Ukraine and other countries after the collapse of the Soviet Union had begun to implement shock therapy economies.
Among them, next, the worst ones are Goose Country and Ukraine.