Day two of 2018 Gaidar Forum: Summing up
The results of the second day of the Ninth Gaidar Forum, a major economic and political conference opening the business season of the year, have been summed up.
On January 17, Russian and international experts discussed issues of social and economic development, the consequences of globalization for the economies of the world, digitalization, educational, and current financial, economic and social trends during panel and expert discussions, open dialogues and interviews.
The second day program featured the main panel discussion, Business and State: Models of Partnership in a Digital Age. The speakers discussed the role of the state in the age of the digital economy; considered how and how quickly countries will cope with today's challenges, and described new models of partnership between business and the state. The moderator, First Deputy Chief of the Government Staff Maxim Akimov, invited the experts to talk about digital transformations that affect the whole world, changing business models and relationships between business and the state. Vice-President for Global Innovations at Cisco Guy Dietrich said digital tools link about 70 billion people and objects today, and by the end of the digital era, by 2020-2030, this system will connect 500 billion devices. “From this perspective, cybersecurity will remain an important trend as well as a challenge accompanying technological progress,” he said. Sberbank President Herman Gref mentioned another trend, the growing availability of artificial intelligence technologies not only to large corporations, but also to medium and small companies.
The speakers at the panel discussion, Digital Society: Causes and Legal Consequences of the Destruction of Intermediaries in Financial Markets, considered the future of the digital economy 10 years from now. They tried to figure out the reasons behind the recent explosive interest in cryptocurrencies and the ICO, whether the recognition of cryptocurrencies would change the views on the monetary and budgetary policies models, and what comes first in these processes, cryptocurrency or the blockchain technology. The moderator, RANEPA Professor Konstantin Korishchenko, asked the participants to share their views on how strongly the growing automation and penetration of new technologies, such as blockchain and cryptocurrencies, would affect the demand and prospects for financial intermediation tools.
Chairman of the State Duma Financial Market Committee Anatoly Aksakov suggested that the emergence of cryptocurrencies was a response to the excessive regulation of financial processes. According to Deputy Finance Minister Alexei Moiseyev, the shrinking of the financial intermediation segment should not be attributed solely to the emergence of blockchain; this process should be considered within the logic of the larger postindustrial society development. In this regard, the difference and advantage of digital tools is the absence of physical restrictions on customer service; and their disadvantage is the high level of cyberthreats and risks associated with the protection of the players’ interests.
The participants in the expert discussion, The Impact of Historical Inertia: is a Strategic Shift Possible? focused on the problem of Russia's long-term economic development. The moderator, Rusnano head Anatoly Chubais, opened the discussion be reminding the audience of the rather modest GDP growth in 2017, a mere 2%, despite the apparent economic growth, the budget deficit giving way to a surplus, and inflation kept in check. “The pace of our growth is lower than those in developed countries. Translated into Russian, this means that we are going to accumulate the backlog,” he said.
The new trajectory of Russia’s sustainable economic growth was the subject of discussion The Sustainability of Economic Growth in Russia and in the World. The moderator, Rector of the Russian Foreign Trade Academy Sergei Sinelnikov-Murylev, noted that in 2017, the Russian economy returned to positive GDP growth rates after two years of decline. The world economy grew by an estimated 3.6%-3.7% last year, which was close to the levels of global growth in the prosperous 2000s. Speaking about Russia’s economic growth, Minister of Economic Development Maxim Oreshkin said that 2017 was the year Russia completed its successful macroeconomic policy reform. Central Bank Governor Elvira Nabiullina also noted positive changes in the economic sphere: “The Russian economy has become more resistant to shocks, less vulnerable to falls and changes in oil prices.”
Nevertheless, the strong dependence on the oil and gas sector of the Russian economy still persists. President of the Center for Strategic Research Pavel Kadochnikov also noted positive changes in the Russian economy, including investment growth, lower interest rates, growth in exports, primarily non-commodity ones, lower inflation, macroeconomic stability and a revival of the business cycle.
Integration of digital technologies in the legal relationship system was considered at the expert discussion, Legal Risks of Digitalization. The experts pondered the following questions: are foreign legal means of digitalization acceptable in Russia? Is legal classification of cryptocurrencies a cyberthreat or an incentive for economic development?
The participants in the open dialogue, Reflections on Central Banking, Protectionism and Globalization, focused on the banking sector’s development and changes in the central banks’ policies in the new global economic conditions. “The most important task of central banks is to support the macroeconomic, price, and financial stability,” said First Deputy Governor of the Central Bank of Russia Ksenia Yudaeva who moderated the session. Russian and foreign experts examined the mechanisms of monetary policy, highlighted advantages and disadvantages of standard and non-standard banking policy tools.
The second day program featured three sessions devoted to the public administration reform and training of civil servants; the experts considered the challenges to modern public administration and sought ways to make it more effective. The reports at the three sessions – The Competencies Needed by CIS Civil Servants: Finding Answers Together, Only Together: Public Administration Reform for Citizens, and Contemporary Challenges for Public Administration – discussed how the selection systems and systems of government employee development should be changed; what specific steps must be taken to make the state apparatus fit for the future; and how global challenges shape new requirements for public administration.
During the open dialogue, Contemporary Challenges for Public Administration, the speakers discussed how the model of public administration should be changed, what resources should be used and how the selection systems and systems of government employee development should be changed. The moderator, RANEPA Rector Vladimir Mau, noted that in the last two or three years, debates on public administration have become one of the key issues on the agenda. Sberbank President Herman Gref explained that simple processes should be delegated to automatic algorithms. One of the fundamental tasks is to give the public administration model more flexibility, he added. “Business is developing in a competitive environment. We need to try to transfer the best practices from business to public administration,” he said before outlining the tasks that need to be addressed: increase the public administration system’s adaptability; establish new institutions – third generation universities, healthcare, and a new system of social assistance. All these processes need to be combined in the public administration reform. “We came to the conclusion that today’s key trend is an attempt to build the government system as a platform,” the expert said.
During the expert discussion, Russian Tax System: Vision of the Future, Russian experts, government officials, and regional leaders discussed how new technologies and tax policy correlate and how globalization affects the jurisdictions of countries; they also talked about the competition of jurisdictions, integration of administration and regulation mechanisms of various fiscal charges.
The tax policy was also discussed at the Conceptual Framework for International Tax Policy session. Representatives of tax authorities, educational institutions and businesses analyzed the future of the transfer pricing rules as the mechanism for allocation of the taxable base of multinational companies between countries; the impact of Russia’s tax agreements on the domestic tax legislation; and possible approaches to the taxation of foreign companies with a virtual presence in Russia.
Two sessions – Macroeconomic Review of the Organization for Economic Cooperation and Development for Russia: Interim Results of the Study and EU-EAEU: Is There Potential for Developing Interaction? – focused on the specifics of modern political and economic integration. During the presentation of the study, experts analyzed Russia’s regional development and gave recommendations for the development of the country's economy.
Education and training of modern business leaders was also discussed during the second day of the forum. The participants of the session, How to Train Business Leaders of the Digital Economy, drew a portrait of a modern business leader. The speakers talked about the differences between the new generation of leaders and the previous ones, and whether business schools should change their approaches to training leaders.
The increasing role of education was covered at the open dialogue, Trends in Education: Challenges, Expectations, Reality. The speakers discussed the place of Russian education in the global context, and the role of reforms in finding the balance between economic demands and the level of education in the country. Rector of the Higher School of Economics Yaroslav Kuzminov spoke about the current situation at various education levels. In general school education, Russia is rapidly catching up with the international leaders and already ranks with the top 25. In vocational training, our country lags far behind advanced economies like France and Germany. “Average college funding here is comparable with the financing of schools in the regions,” the expert explained. In universities, there is a mixed picture. We are ahead of China in terms of growth; half of Russian students choose correspondence programs, while only 15% of Russians are involved in lifelong education. For comparison, in Sweden, 63% of adult citizens are enrolled in training programs (42% in Germany).
The massive scale of education, individualization, and use of technology are the main trends of higher education in Russia today, according to RANEPA Vice-Rector, Rector of the Russian Foreign Trade Academy Sergei Sinelnikov-Murylev. According to the expert, from 50% to 80% of Russian high school graduates enter universities. In this regard, there is a growing qualitative gap in education. Various aspects of education were also considered at the sessions: How to Train Business Leaders of the Digital Economy, and Fintech Fight: Participants and Reasons. The Role of Universities.
Russian-French cooperation in education and science was discussed during the session devoted to Trianon Dialogue. The participants analyzed the strategy of strengthening the positions of Russian and French universities in the international educational market. “A modern university is unimaginable without international cooperation,” said First Deputy Education and Science Minister Valentina Pereverzeva. More than 5,000 Russian students are studying in France, while more than 1,000 French people are educated in our country, she added. Rector of the Russian Foreign Trade Academy Sergei Sinelnikov-Murylev and President of the University of Nice Sophia Antipolis Emmanuel Tric moderated the discussion.
Corporate responsibility and the modern business leaders’ contribution to sustainable development were analyzed at two sessions, New Technologies and Corporate Social Responsibility. How Business Schools Can Implement Principles for Responsible Management Education and Strategic Breakthrough Triangle: The Future of Corporate Programs.
The expert discussion, Long Legacies: Persistence of Social, Spatial and Economic Trends over Centuries, covered longterm trends in social mobility across countries, longterm social mobility, global human development and inequality in welfare, as well as sustainable spatial distribution from ancient times to modern populations. A related topic was discussed at the session, The Impact of Historical Inertia: is a Strategic Shift Possible? The speakers were to answer the following question: how can we overcome the dominance of historical inertia over economic development?
The participants in the session on Lasting Legacy of the 2018 FIFA World Cup: Economic and Human Factors considered Russia's economic development through the prism of the 2018 World Cup. What legacy, economic and social, will Mundial leave behind?
The second day program also included the sessions, Increasing the Effectiveness of the National Immunization System, The New Life of Big Cities: Risk and Decision Analysis, Sustainable Development of Agribusiness: The Role of Agricultural Losses and Food By-Products, Agrifood Sector: Will Russia Break into the World Market?, and Succession of Generations in the Modern World: Technology, Demography, Geopolitics.
The participants of the second day discussions included international political analysts, economists, academics, leaders of Russian regions, representatives of the Russian and foreign political elite, and business leaders: General Director - Chairman of the Board of Russian Railways Oleg Belozerov; General Director of Fintech Association Sergei Solonin; Chairman of the Board of Directors of SAFMAR Financial Investments Oleg Vyugin; Chairperson of the Russian Accounts Chamber Tatyana Golikova; First Deputy Governor of the Central Bank of Russia Ksenia Yudayeva; Chairman of the Board of Directors of ABH Holdings SA Petr Aven; Governor of the Bank of Spain Luis Maria Linde de Castro; Counselor for Cooperation and Cultural Action for the Embassy of France in Russia, Director of the French Institute of Russia Olivier Guillaume; President of AACSB International Tom Robinson; Vice President, Chief Officer for Europe, the Middle East and Africa at AACSB International Timothy Mescon; RANEPA Vice-Rector, Director of RANEPA Institute of Business Studies, President of RABE Sergey Myasoedov; RANEPA Professor, Director of RANEPA Center for Russian Studies, Emeritus Fellow of St Antony's College at the University of Oxford Carol Scott Leonard; President of the Russian Academy of Sciences Alexander Sergeyev; Chief Economist, Deputy Chairman of Vnesheconombank Andrei Klepach; Rector of the Higher School of Economics Yaroslav Kuzminov and others.