This is CBSI on the world.

I'm John Batson.

To Russia, the economy under sanctions, severe sanctions.

Michael Bernstom of the Hoover Institution is my guide.

PBS headline in these last days.

Russia's slowing wartime economy pushes Kremlin to increase taxes and fees.

The Kremlin needs money to keep its finances

study, and it's clear where President Putin intends to get an increase in value-added tax, VAT,

22% from 20, expected to add as much as $1 trillion as $12.3 billion to the state budget. The increases

contained in legislation making its way through the Russia's parliament. Michael, a very good evening

to you've been talking about the shortfall in the budget for some time. As the price of oil

declines, the gap in the budget climbs. It doesn't look like they have a

fix. It looks like they're slowly turning up the taxes. Does it fill the gap? Are they still

behind? Good evening to you.

Well, the evening to you, it doesn't fill the gap for a much, much bigger reason. There is this old traditional American saying since the

regional administration, maybe even before, that the best remedy against budget deficit is

economic growth. Because when economy grows, you have even at the same tax rates, you collect more

revenues and you close the budget gap. So the problem in Russia is not

even fiscal. The problem is overall economic growth. They've exhausted their sources of growth.

They have labor shortages. They have capital shortages. They have high expenditures on the war.

They have hand expenditure on social programs. And because of that, they have the budget deficit,

which by our standards is small, 2 to 3% of GDP, but it's very, very difficult for them to close

...