Economic growth: after communism

On March 20-21, 2002 the Institute for the Economy in Transition held an international conference "Economic growth: after communism" in Moscow.

The conference was attended by leading experts in economic science and public administration. A central issue of the conference was to define the ways of consolidation of economic growth, creation of conditions for ensurance of sustainability of rapid growth of the Russian economy. All the speakers highly praised development of the Russian economy after the crisis of 1998.

In the framework of the conference the following people presented their speeches: Director of the Institute for the economy in transition and state Duma Deputy, Yegor Gaidar, First Deputy managing Director of the IMF, Anne Krueger,  Professor at the University of California in Los Angeles, Arnold Harberger, Minister of labor and social development Minister, Alexander Pochinok, the First Deputy of finances Minister of Russia, Alexey Ulukaev, the Presidential Advisor for economy, Andrey Illarionov, Deputy Chairman of the budget Committee of the State Duma, former Russian Finance Minister Mikhail Zadornov, Deputy Minister of economic development and trade Arkady Dvorkovich, head of the Working center of economic reforms under the RF Government Vladimir Mau, Deputy Chairman of the management Board of RAO UES of Russia Sergey Dubinin, senior fellow of the Center for global development and Institute for international Economics William Easterly; Berkeley Professor Barry Eichengreen, Professor of the University of Iceland in Reykjavik Thorvaldur Gylfason, Professor at Indiana University, Bloomington, Michael Alekseev, senior fellow at the American Enterprise Institute, Washington, Leon Aron, First Deputy Chairman of the Central Bank of the Russian Federation Tatiana Paramonova, senior associate Carnegie Endowment, Washington, Anders Aslund, Deputy Chairman of the State Duma Irina Khakamada,  Professor at Duke University Robert Conrad, Chief economist at Citigroup in Russia Niklas Sundstrom, Chairman of the budgetary Committee of the State Duma of the Russian Federation Alexander Zhukov, Head of the Center for demography and human ecology of IEF RAS Anatoly Vishnevsky and others.

The speech of Anne Krueger contained a high assessment of the results of development of the Russian economy for the previous three years and economic policy held by Russian authorities. The banking reform, strengthening property rights and the reform of natural monopolies were named priorities of the economic policy in Russia. In a separate presentation the speaker proposed the participants of the conference her vision of world financial architecture and the prospects for its reform.

Alexey Ulukaev in his report reviewed the outcomes of the 2001 and described major trends in financial policy for the near future as essential precondition for the consolidation of economic growth. Mikhail Zadornov stated the vision of this problem from the point of view of the legislator, who considers that for economic growth it is necessary to form a stabilization fund, go to the medium-term (three-year) budgetary planning, to include the dynamics of tariffs of natural monopolies in budget planning, to ensure the deepening of the fiscal federalism.

Yegor Gaidar warned against the dangerous arrogance of economists and politicians seeking to artificially maintain economic growth. This theme was further developed by Vladimir Mau, according to whom the artificial stimulation of economic growth can result in major economic failure. Economic policy-oriented growth should correspond a simple criterion: it should avoid populism and be clear  for the average investor, reader of Financial Times. Andrei Illarionov, on the basis of the detailed analysis of macroeconomic factors of economic development of the 1990s marked the threats that are in the way of economic growth of Russia at present. Among them he named as the main the policy of strengthening the ruble real exchange rate and a refusal to contain growth of tariffs of natural monopolies.

Arnold Harberger presented a detailed system of arguments against the real ruble appreciation in Russia. Sergey Dubinin, on the contrary, insisted on the necessity of the real appreciation of ruble and tariffs of natural monopolies, which, in his opinion, should stimulate structural reforms.

Alexander Pochinok considered the problems of deepening of reforms in the social sector. The main conclusion from the speech of the Minister of labour and social development has become unexpected for the major part of the audience. Instead of the usual complaints on the lack of allocation of budget funds for social support mechanisms he has called for a deep restructuring of current budget expenditure on social needs in order to radically increase the efficiency of their use.

Barry Eichengreen and William Easterly expressed their views about the reasons for the lack of effectiveness of the international financial institutions and have offered their vision of reform. Naturally, their recommendations were significantly different. Thorvaldur Gylfason dwelled on the issues of the impact of natural resources on economic growth prospects. This influence, in his opinion, is in most cases negative.

At the conference was also organized the work of several sections devoted to the discussion of macroeconomic, institutional and political factors of economic growth, international financial institutions in Russia, budgetary and tax policy and economic growth, the structure of the Russian agrifood sector, social policy and regional aspects of economic growth, the dependence of economic growth and natural resources.