Eighth Gaidar Forum at RANEPA

Fr om 12 to 14 January, the Russian Presidential Academy of National Economy and Public Administration (RANEPA) hosted the Gaidar Forum 2017, Russia and the World: Setting Priorities.

Leading Russian and foreign experts, politicians, economists, scientists, and representatives of the business community discussed the current socioeconomic situation, sustainable development possibilities, the obstacles and motivators for economic growth, the government's priority projects, attraction of investments, Eurasian integration and relations with foreign partners, as well as healthcare, education, personnel training and other issues.

Russian President Vladimir Putin sent greetings to the participants; Vladimir Mau, Rector of RANEPA, which has hosted the Gaidar Forum for eight years, read the President’s message. “These meetings are always notable for their highly relevant and diverse agenda, important participants and promising ideas,” Vladimir Putin said in his message. “I hope that the suggestions and recommendations that you make will help Russia meet social and economic goals the country is facing and strengthen international cooperation in overcoming common global challenges.”

The traditional visit of Russian Prime Minister Dmitry Medvedev was the key event of the forum. He spoke at the main discussion session, Russia and the World: Setting Priorities. The Prime Minister outlined the main barriers to economic growth. In his opinion, the risk of a lingering stagnation is a serious problem. “We need large-scale structural reforms,” the Prime Minister said. “That Russia has weathered the crisis much better than many forecasts had suggested does not mean that all our problems are resolved; normally, the economy has to show growth in potential and opportunities,” he added.

The task of reforming the economy needs to be addressed during the period of low commodity prices, the Prime Minister said. Given that the economy is in a vulnerable state at the moment, any structural solution should be extremely carefully balanced. Dmitry Medvedev also said the government needs to reduce excessive intervention in the economy; to promote competition; to improve the investment appeal of individual regions; and to restructure the public administration system.

The participants of the discussion included David Lipton, First Deputy Managing Director of the International Monetary Fund; Marek Belka, former Prime Minister of Poland (2004-2005) and President of the National Bank of Poland (2010-2016); Martin Wolf, Chief Economics Commentator with The Financial Times; Kevin Michael Rudd, President of the Asia Society Policy Institute (New York) and former Prime Minister of Australia (2007-2010, 2013); Paul Polman, CEO of Unilever Group, and others.

The first day of the Gaidar Forum started with a business breakfast – a panel discussion with members of Russia’s Foreign Investment Advisory Council organized with the support of Unilever Group. The experts looked at how Russian realities and investment climate have changed over the last 25 years, and tried to find the secret formula of steady growth and unfailing business stability.

Social issues were actively discussed at the forum. One of the opening debates, Social Development: Historical Lessons and Future Challenges, was attended by Deputy Prime Minister Olga Golodets; Minister of Labor and Social Protection Maxim Topilin; Chairman of the Russian Pension Fund Anton Drozdov; Rector of the Higher School of Economics (HSE) National Research University Yaroslav Kuzminov; and Chairman of the Federation of Independent Trade Unions of Russia Mikhail Shmakov. The experts pointed out Russia’s accumulated historical experience in social environment and described the current situation in this area. The speakers agreed that the labor relations and decent incomes are the main issues for the government, regardless of the economic situation.

The World Bank presented a report, Russian Federation Systematic Country Diagnostic: Pathway to Inclusive Growth, after break on the first day of the Gaidar Forum. The document analyzes the state of the Russian economy, identifies the greatest challenges facing the country and the key factors limiting its growth. In particular, the report noted that the need to reduce the level of premature mortality, improve people’s health, provide quality and affordable education, and improve the efficiency of the social security system.

Priority projects the Government has launched since the end of 2016 and their expected social impact were discussed by experts at the panel discussion, Priority Projects as a Factor of Economic Growth. The speakers who presented their reports included First Deputy Prime Minister Igor Shuvalov; Minister of Communications and Mass Media Nikolai Nikiforov; Minister of Construction, Housing and Utilities Mikhail Men; Deputy Chief of the Government Staff, Director of the Department of Project Activities of the Government Andrei Slepnyov; First Deputy Minister of Industry and Trade Gleb Nikitin; and Deputy Economic Development Minister Stanislav Voskresensky.

Several discussions on the first day of the Gaidar Forum 2017 were devoted to regional issues, including New Regional Policy, Best Innovation Cluster Management Practices, and Rating Results of the Association of Innovative Regions of Russia.

The participants of the New Regional Policy discussion tried to decide whether we need to concentrate management in the hands of the Federal Center, or provide more independence to the leading regions and cities.

“Strong regions are pillars of the country,” President of Tatarstan Rustam Minnikhanov said in his speech. The discussion was also attended by regional leaders. Maxim Reshetnikov, Minister of the Moscow government – Head of the Economic Policy and Development Department, shared Moscow’s experience of spurring economic growth through internal sources – greater efficiency and mobilization of tax and non-tax revenues. Another speaker, Deputy Economics Minister Alexander Tsybulsky, stressed that the solutions developed will later form the basis of the framework document, and then the strategy of spatial development the Ministry is now working on, and invited the panelists to further cooperation. Special attention was paid to the interaction between the country’s constituent regions and the federal Government.

Eleven leading clusters were presented at the session, Best innovation cluster management practice, moderated by State Secretary – Deputy Minister of Economic Development Oleg Fomichov. The experts shared their experience in creating unique "smart technologies" and agreed that shortage of qualified personnel is becoming a major issue, so many regions are opening training centers in collaboration with universities.

The Innovative Business in the Regions of Russia and Innovation Development of the Regions of Russia rankings were presented by the Association of Innovative Regions of Russia. The discussion was moderated by Ivan Bortnik, Advisor to the General Director of the Foundation to Promote Innovation. The participants included Minister of Economy of the Republic of Tatarstan Artyom Zdunov; State Secretary – Deputy Minister of Economic Development Oleg Fomichov; speaker of the Tomsk Region legislature Oksana Kozlovskaya and others. The discussion focused on the following questions: what regions of Russia are friendlier to innovative business; which rankings reflect the actual situation with innovation in the country's constituent regions for 2016 more objectively.

International issues were also discussed during the first day of the forum: Europe after Brexit, Immigration vs. Emigration, and Patterns of Sustainable Development as Defined Today.

The Brexit discussion was attended by Chief Economics Commentator of The Financial Times Martin Wolf; Vice-President of the European Parliament Alexander Graf Lambsdorff; President of Václav Klaus Institute and former President of the Czech Republic (2003-2013) Václav Klaus; Director of the Centre for Globalization and Governance at the NOVA School of Business and Economics Jorge Braga de Macedo; President of the European Forum Alpbach and former European Commissioner for Agriculture and Fisheries (1995-2004) Franz Fischler; and Director of the Center for European Policy Studies (CEPS) Daniel Gros. The experts discussed the current situation in the euro area and its immediate future.

The Patterns of Sustainable Development session focused on current issues in meeting sustainable development goals in the interaction of the business community, government institutions and NGOs, and the Paris climate change agreement.

The first day of the forum also featured discussions of the banking industry, Global Crises and the Challenges for Central Banking: Implications for Macroeconomic Policy, and Banking Services without Banks.

The keynote report at the first discussion was delivered by Jacob A. Frenkel, Chairman of JP Morgan Chase International, Chairman of the Group of Thirty (G30) Board of Trustees and former Chairman of the Bank of Israel (1991-2000). The second discussion was devoted to the changes in the financial system due to the development of innovative financial and technology platforms that enter into competition with regular commercial and investment banks.

January 13, the second day of the forum, included a major debate, Sustainable Economic Growth: A Model for Russia, wh ere Chairman of the Board of the Center for Strategic Research Foundation (CSR) Alexei Kudrin presented his report. The expert noted that economic recovery required drastic measures, because the old model is no longer working. The discussion of the report was attended by First Deputy Chairman of the Central Bank Ksenia Yudaeva; Accounts Chamber Head Tatyana Golikova; Finance Minister Anton Siluanov; Central Bank Governor Elvira Nabiullina; Minister of Economic Development Maxim Oreshkin; Cyril Muller, World Bank Vice President for Europe and Central Asia; and Deputy Chairman of Vnesheconombank Andrei Klepach.

During the second day of the Gaidar Forum, the speakers not only covered the current economic situation in Russia, but also recalled some lessons of the past century. One of the opening debates, 1917-2017: Lessons of the Bygone Century, was dedicated to the October Revolution of 1917. The experts discussed a wide spectrum of issues related to the preconditions of the 1917 and its consequences and their impact on modern society.

At the same time with the debate about one of the most significant historical event for our country, the second day of the forum featured a discussion, Europe from Lisbon to Vladivostok: Dream or Reality? The experts discussed the current relations between Russia and European countries and the possibility of creating a free trade zone. The participants included President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin and Executive Chairman of the Board of the East Office of Finnish Industries and former Prime Minister of Finland (1991-1995) Esko Aho.

Gaidar Forum experts considered the global energy market situation at the panel discussion, The Global Energy Market in New Conditions: What Do the Technology Revolution and Concern about Climate Change Bring to the World Energy Debate? The speakers expressed their opinion about what the Paris Agreement gives to the world. Other issues for discussion included whether a world price for CO2 emissions is possible; the prospects of renewable energy development in the context of subsidies reduction; and what the world fuel and energy balance will look like in 20 years.

On the second day of the Forum, experts also discussed the positive and negative effects of competition in the panel session, Competition Policy Priorities. The moderator, Chairman of the State Duma Budget and Tax Committee Andrei Makarov, said the government should not interfere with competition, but at the same time has to take care of the social security of those affected by competition results.

Representatives of the banking sector discussed the state of the Russian financial infrastructure during the session The Financial Infrastructure of Economic Growth. The speakers included Vnesheconombank Chairman Sergei Gorkov, First Deputy Chairman of the Bank of Russia Sergei Shvetsov, President and Chairman of VTB 24 Mikhail Zadornov, CEO of Analytical Credit Rating Agency Ekaterina Trofimova, Resident Representative of the IMF in Russia Gabriel Di Bella, and Deputy Finance Minister Alexei Moiseyev.

Another discussion on banking issues was held in the second day of the Gaidar Forum. During the session, The Strategy and Tactics of the Monetary Policy of the Central Bank of Russia, experts discussed priorities for monetary policy and optimal reaction to inflationary shocks; ways to improve the efficiency of the transmission mechanism of monetary policy; ways to manage the inflation expectations of economic agents.

SME support was another major issue tackled during the forum. Representatives of executive authorities, small and medium enterprises, banks and corporations discussed ways to expand the business community, which would help stimulate economic growth, during the panel discussion, Wh ere the Talk Ends and Assistance to Small and Medium-Sized Businesses Begins, at the Gaidar Forum 2017. The discussion focused on the policy of lending to small and medium-sized businesses and, in particular, Program 6.5 to promote small and mid-sized business development.

The panel discussion, Technological Challenges and Economic Dynamics: What is Really Going on?, on the second day of the Gaidar Forum 2017 covered technological foundations for economic growth and new qualitative indicators to assess the economic situation. The speakers included CEO and Chairman of Sberbank Executive Board Herman Gref; Chairman of the Rusnano Management Company Executive Board Anatoly Chubais; Director of Industry Development Fund Alexei Komissarov, and Head of the Federal Service for State Statistics Alexander Surinov.

Issues of education and human resources were addressed at two sessions during the second day of the forum, the panel discussion In Search for Future Leaders and the public meeting of the National Board of Business Education Quality Assessment (NASDOBR), New Approaches to the Assessment of the Quality of Training of National Professional Managers.

Regional leaders and government representatives participated in one of the final discussions of the second day of the Forum, Inter-budgetary Relations and the Delineation of Powers: Medium- Term Challenges. The experts examined nteraction of the federal budget with budgets of other levels and the possible new tools and approaches to financial policies.

The second day of the forum ended with the panel discussion, Religious and Ethnic-Cultural Diversity: Development, Stability, Security. Politicians, scientists, religious and public figures spoke about education and interaction of cultures and ethnic groups in the process of building Russia's unified civil identity.

The third, final day of the forum opened with the discussion The New Tax Policy in Russia: What Changes May Lie Ahead After 2018? The issues raised at the session refer to President Vladimir Putin’s annual Address to the Federal Assembly, in which he stressed the importance of improving the tax legislation with due account of the needs of businesses and manufacturers, and giving up inefficient tools. According to his instructions, the year 2017 should be devoted to the discussion of options for fine-tuning the tax system to meet the economic growth goals. The discussion was attended by Chairman of the State Duma Budget and Tax Committee, session moderator Andrei Makarov, Finance Minister Anton Siluanov, Minister of Economic Development Maxim Oreshkin, RSPP President Alexander Shokhin, and President of the Russian Chamber of Commerce Sergei Katyrin. Experts agreed to join efforts of legislators, financiers and business associations to begin, in February-March, the elaboration of proposals for implementing President’s instructions for the tax policy.

Participants of the panel discussion, Smart Cities Technologies: Opportunities to Improve the Quality of Life of the Population and to Solve the Infrastructural Problems of Russian Cities, discussed national and international practices of Smart City technologies and barriers to their implementation. Foreign experts shared their experiences in using smart technology in modern cities. Chairman and Managing Director of Silverline Group Farook Mahmood said that by 2024, India plans to create 100 Smart Cities, which, according to preliminary estimates, will require investment of some 60 billion dollars in their basic urban infrastructure. Technical Leader of Smarter Cities Business in Central and Eastern Europe at IBM Nikolai Marin noted that the introduction of Smart Cities should not be seen as an end in itself but as a tool for sustainable development, and talked about the Smart City features in Madrid, Barcelona and Dublin. Head of the Critical Infrastructure Protection at Kaspersky Lab Global Markets Andrei Suvorov spoke about the risks arising from the cyber-physical Smart City technologies development.

The education system came into the focus of several discussions at the forum. The third day included the sessions, Business Education as a Development Driver for Russian Business: Business Schools, Corporate Institutions and Training Centers – Competitors or Partners?; Business Education: the Role of Emotional Intelligence and Adaptability to Changes," Business education: the role of emotional intelligence and adaptability to change? and University 3.0: The Future is Coming.

The latter discussion, University 3.0: The Future is Coming, was attended by Ludmila Ogorodova, Deputy Minister of Education and Science; Viktor Sadovnichy, Rector of the Lomonosov Moscow State University; RANEPA Rector Vladimir Mau; Yaroslav Kuzminov, Rector of the Higher School of Economics National Research University; Andrei Sharonov, President of the Moscow School of Management SKOLKOVO; Oleg Kharkhordin, Rector of the European University in St. Petersburg; Frédérique Vidal, President of the University Nice Sophia Antipolis; and Evgeny Kuznetsov, Deputy General Manager and Program Director at RVK.

During the discussion, the leaders of universities and experts discussed the role and place of entrepreneurship in the context of higher education institutions’ work, and the new structure of higher education. Vladimir Mau identified 10 criteria for a ‘qualifying’ University, including individualization and continuity of education, a universal language, the knowledge of experts, a strong humanitarian component, and global competition.

The concluding session of the Gaidar Forum also focused on the role of business education in the modern world. President of AMBA International Sir Paul Judge who delivered the keynote report explained how the business education is changing in the modern world and stressed the importance of lifelong learning. The discussion was also attended by RANEPA Rector Vladimir Mau; Laurie Bristow, Ambassador of the United Kingdom to the Russian Federation; Veniamin Kaganov, Deputy Minister of Education and Science; AMBA CEO Andrew Main Wilson; and Sergei Myasoyedov, Vice-Rector and Director of Institute of RANEPA Business Studies, President of the Russian Association of Business Education.