Gaidar Forum 2014: Sessions arranged by Gaidar Institute’s specialists

Meetings moderated by Gaidar Institute’s specialists were held within the framework of the Gaidar Forum 2014, “Russia and the World: Sustainable Development”.


15 января

January 15

Gaidar Institute’s Director for Research, Executive Director of the Russian G20 and G8 Expert Council Sergey Drobyshevsky held a roundtable discussion on “From G20 to G8: Russia’s agenda”. The discussion was attended by Russia’s G20 Sherpa Svetlana Lukash; Gabriela Ramos, Chief of Staff of the Organization for Economic Cooperation and Development (OECD) and the OECD G20 Sherpa; Ambassador of Australia to the Russian Federation Paul Myler; Russia’s G8 Sherpa Alexey Kvasov; Member of the Government Commission for the Coordination of the Open Government Yekaterina Shapochka; Russian Union of Industrialists and Entrepreneurs (RSPP) Executive Vice-President Oleg Preksin; Roman Chukov, Russia’s B20 and B8 Sherpa and Chairman Y8 Russia 2014.

According to r oundtable moderator Mr. Drobyshevsky, the Russia’s Presidency of G20 has two benefits for Russia. First, Russia has gained international experience in the leadership of international economic associations, not political ones like the UN where Russia has the power of veto historically. At the same time, Russia managed to offer the agenda which is relevant for all and didn’t offer to solve any secondary issues. Second, the issues which Russia considered at the international level and the ideas it insisted upon are relevant for the Russian economy as well, namely budget system equilibrium, promoting investment in economic growth, sustainable development, and enhancing economic transparency. As a result, we received support of our internal economic policy. We, therefore, suggested the same thing that we need too. Besides, our economic course was acclaimed worldwide. The main challenge with the Russia’s Presidency of G8 and the difference fr om the Presidency of G20 in that this is a club of countries which according to their status address global political issues rather than economic ones. Let’s say, in G20 Russia presided as representative of a new class of emerging economies and was heavily supported by Brazil, China, India, whereas in G8 Russia represents only itself.


The agenda we offer is politically neutral enough to avoid redundant political debates and focus on more common issues such as terrorism, drug trafficking, man-made disasters etc. These are the issues on which Russia only may provide proposals on its own behalf, not a group of countries.


Svetlana Lukash commented on the main outcomes of the Russia's G20 Presidency. She noted that in 2013 the G20 achieved considerable progress. The agenda was focused on finding new sources of economic growth and job creation. Svetlana Lukash stressed that the G20 countries managed to find a consensus between the tasks of maintaining adequate rates of economic growth and adoption of mid-term national fiscal strategies. The discussion by the G20 of the issues of job creation and labor market policies in 2013 was marked by putting forward an integrated approach towards solving them. The idea behind this approach involves the need to coordinate policies on the labor market with macroeconomic, fiscal and investment policies.

Another important outcomes of the G20 work are highlighted in the St. Petersburg Action Plan which defines actions planned by the G20 for achieving strong, sustainable and balanced growth.


New themes for the G20 agenda that arose during Russia's Presidency included the issues of financing long-term I nvestment and combating tax evasion. Svetlana Lukash also mentioned significant progress made by the G20 in combating corruption, promoting energy sustainability and international development. Another positive and useful outcome for the whole international community was the decision, adopted by the G20 in St. Petersburg, to extend the standstill agreement on protectionism until 2016.
The Russia’s Sherpa paid particular attention to the role of the G20's active interaction with external stakeholders, including non-G20 countries, international organizations and the outreach groups (business, trade unions, experts, civil society and youth). “Overall, the Presidency has been recognized as very successful and innovative”, Svetlana Lukash concluded.


In her speech Gabriela Ramos also noted the success of the Russia's G20 Presidency, emphasizing the necessity for greater cooperation between the G20 and the G8. "Public opinion is divided about which group is more meaningful, which group is bringing the change that the world needs," she said, clarifying that there is no real competition between two groups but the division of labor. She also noted that these international institutions were designed to create ‘building blocks' for a safer, more dynamic and more trustful global economy. "Russia is chairing both groups consequently, making a very meaningful contribution to make the best out of each one," Gabriela Ramos noted.

Paul Myler in his turn emphasized that the G8 has historically been a group of leaders, who are willing to act and take responsibility to what is happening around them in the global environment. At the same time, interestingly enough, according to Mr. Myler, evolution is now occurring in the G20 - originally united to deal with global financial crisis. "It is a very interesting process to watch two agendas working with each other. I think it worked well last year with the UK's Presidency of the G8, and I think it's going to work well with Russia's and Australia's presidencies," noted the Ambassador .

A. Kvasov highlighted in his speech the role of the G8 and the Russia's Presidency in this club this year. He noted that t he modern world is characterized by a constantly increasing number of challenges and risks, and the demand for better governance is growing. He also added that the process of division of responsibilities between different instruments of international political governance included substantial changes being constantly monitored and supervised both by the fora and civil society.


Speaking of the agenda of the Russia's G8 Presidency which started on January 1, 2014, Alexei Kvasov stressed that the priorities of the G8 originated fr om the concerns that are vital for international community nowadays. The core objectives of the Russia's G8 Presidency will include: cooperation in the fight against drugs, fight against terrorism, resolution of conflicts, global management of natural and man-made disaster risks and global health security (including emerging I nfections and food safety). According to the Russian Sherpa, the implementation of these priorities in the year of Russia's Presidency will be based on two major principles, namely - risk management, in contrast to the reaction to the challenges, and maximization of the socio-economic impact of G8 decisions and initiatives. Furthermore, the agenda will certainly include such important topics as global economy and international trade; attention will be paid to t he issues of financial crimes, migration and international development assistance.


Speaking on the importance of interaction with the G8 outreach partners, Alexei Kvasov noted that the work in the year of the Russia's G8 Presidency will include such non-governmental formats as Business 8, Civil 8, Youth 8, Parliamentary 8, and the Global University Summit (GUS-2014).


Another important G8 agenda item this year will pertain to continuing the discussion launched in 2013 on promoting data openness. Ekaterina Shapochka stressed in her speech the undoubted significance of the topic of open government for the G8 and the entire world. According to the s peaker, this year's discussion will be determined by two main subjects: enhancing the e ffectiveness of the state through openness and promoting openness for prosperity and improving the quality of life. "Economic evaluation of the contribution fr om public disclosure of data to the economy is about $4 trillion. But many countries increasingly start to appreciate the social effect, which occurs when the government has commitment to be open," Ekaterina Shapochka said.

Oleg Preksin said that RSPP's experience of leading the Business 20 will be used for the organization of this year's work as well. According to the Russian Business 8 Sherpa, the main areas of this outreach group work this year will be the issues of global development (including the Millennium Development Goals), the business climate and non-commercial risks (including risks of natural disasters and terrorism). "The subject of risk management is a major one. The business community intends to share the concerns for hese risks with the government," stressed Oleg Preksin.


Roman Chukov in his turn reminded that the initiative to establish the format of youth summits originated from Russia in 2006. He said that the third stage of competitive selection of the Russian delegation to the Y8 Summit Russia 2014, which will be held in Moscow in May, is currently underway.


Gaidar Institute’s Director of Center for Real Sector Georgy Idrisov held a roundtable on “Institutional opportunities and constraints in the development of energy markets”. The discussion was attended by a wide range of international experts. Energy has long been playing a leading role in the development and functioning of the global economy. Agricultural, transport, industrial sectors, businesses, and households will keep even more being dependent upon energy, because the society constantly seeks a better quality of life. The trend towards higher mobility, urbanization and integration into the global economy will facilitate the use of and the dependence upon energy. Historically, the human civilization shows that the extensive use of energy has unique features, extra burden of responsibility for sustainable development assumed by the state and business. The responsibility refers to the environmental protection, health, security, lifestyle, and economic relations in the society. The experts considered the following issues in the course of discussion:

•    Accessible and sustainable energy challenges;
•    Natural resource rent and economic growth;
•    Oil and gas economies’ experience in managing the natural resource rent;
•    Opportunities and constraints in attracting investment in the Russian mining sector;
•    Experience and prospects of independent companies in the Russian oil and gas sector;
•    Future economic growth and demand for energy resources;
•    Electric-power industry’s sustainable growth and development.


Factors and current constraints of economic growth; potential GDP estimates; the effect of structural and business component on GDP growth; internal systemic risks and structural disproportions; financial incentives and financial instability risks, as well as the issues such as how stable the external environment can be in the long-term perspective; how critical external investment is;  whether the growth model is focused on the internal demand or export; whether the mineral resource rent is a barrier or a cushion to reforms were considered as part of the panel discussion “Macroeconomic forecast until 2030”.


According to the moderator, Director of Center for Macroeconomics and Finance at Gaidar Institute Alexey Vedev, a panel discussion on long-term forecast of the development of the Russian economy is extremely important. Having reached the pre-crisis level following a recovery growth, GDP and industrial production growth rates began to steadily slow down since the middle of 2012. Positive external environment, above all, global oil prices beyond $100 per barrel have ensured positive growth rates in the key macro indicators. However, the internal demand’s growth rates (estimated as GDP on consumption less export plus import) have been declining consistently. High growth rates in the production output (more than 5% on an annualized basis) were observed exclusively in the period of correctional growth in the Russian economy. In the second half of 2011 industrial production reached the pre-crisis values of output, marking the onset of the next industrial development phase characterized by stalling growth. Growth rates declined from 5% to 0 throughout a period of six quarters to stop in 2013. Since Q3 2012, however, investment programs apparently slowed down in the Russian economy against the backdrop of declining output of investment products. It is important that most production facilities began to reduce output prior to reaching the pre-crisis output volumes. Production of equipment and machinery, electrical equipment, and building materials was 25%, 16%, and 8% below the pre-crisis level, respectively, at the end of the 10th month in 2013. The key question is the reasons for and sustainability of downtrends in growth rates (all the way down to a fall) in the principal development indicators in the real sector and the financial sector of the Russian economy. Late in 2013 the reference trajectory of economic growth in 2013 –2030 declined from 4.0% (the second scenario of the forecast in March 2013) to 2.8%. Most importantly, the innovative option as reference scenario was replaced with the energy and resource-based option. The innovative option was characterized by accelerated investment trend in economic growth, creating a modern transport infrastructure and competitive high-tech production facilities, whereas the energy and resource-based option was intended to upgrade the fuel and energy sector and the mineral sector of the Russian economy.


“Forecasts may be treated differently,” Deputy Head of the Ministry of Economic Development and Trade of the Russian Federation Andrey Klepach. They may be treated either as a kind of fortune-telling or a toolkit needed for the budget rather than life. And it should be conservative. Forecasting is a sort of digitalized national policy, i.e. what the state intends to do in the three years to come or in the long-term period ”. “Speaking about the forecast for the past 2013, there were two forecasts. The forecast which the Government adopted as the principal one for the budget was focused on high growth rates of 3% or more, and it was a conservative forecast which initially expected 2.5%, and then was downgraded to 1.8%”, said Andrey Klepach.


Director of Center for Macroeconomic Research at OAO Sberbank of Russia Julia Tseplyaeva noted that Sberbank forecasts 2.2% – 2.3% in 2014, however, 2% might seem to be high if nothing is done.


According to Head at Economic Expert Group Evsei Gurvich, prediction of a 5% economic growth in Russia is a dream unsupported by reality, because a 4% growth is the ceiling which the Russian economy can afford with high crude oil prices. “Our inability to compete is a constant drag on the economy, especially in oil and gas sector”, he noted.


The panel discussion was also attended by Managing Director at HSBC Christian Deseglise; leading economist at Agricultural Bank of China Xian Sun Tzo; Deputy Director of the Institute for National Economic Forecasts, RAS, Marat Uzyakov; Head of Long-term Strategic Planning Department at Ministry of Finance of the Russian Federation Maxim Oreshkin; and Head of Macroeconomic Processes Analysis and Forecasting Department at the Center for Macroeconomic Analysis and Short-Term Forecasting, RAS, Dmitry Belousov.


Head of Tax System Development Department at Gaidar Institute Natalya Korniyenko moderated a roundtable on “Legal and fiscal environment in the Customs Union member countries”. The discussion was attended by Head of Tax Policy Department at Eurasian Economic Commission Nurmatbek Mambetaliev; KPMG Russia’s partner Mikhail Orlov; senior researcher at Gaidar Institute Natalya Postnikova; senior researcher at Gaidar Institute Elena Velikova.


Mrs. Velikova presented a report on “Comparative analysis of legal regulation of entrepreneurial activity of foreign nationals within the Customs Union and the Common Economic Space” which covers the current situation and short-term prospects of the Eurasian integration, defines the role of nationals’ entrepreneurial activity in the national economy and integrated unions. The report was focused on the legal regulation of foreign nationals’ entrepreneurial activity; certain related aspects of international treaties on avoiding dual taxation; migration legislation requirements to foreign nationals’ entitlement to entrepreneurial activity.


Speaking of the legal regulation of foreign nationals’ entrepreneurial activity, Mrs. Velikova dwelled on the consideration of all levels of legal regulation of entrepreneurial activity: international legal and national ones, stressing that the provisions of the civil codes of the countries within the Customs Union and the Common Economic Space on nationals’ entrepreneurial activity are very similar, although there are differences in the legal regulation of this matter. The expert noted that the civil legislation of the countries within the CU and the CES don’t confer the entitlement to entrepreneurial activity conducted by the nationals of the member countries. Speaking of the differences, she pointed out that in Kazakhstan an individual entrepreneur only may be a national of Kazakhstan or the orlaman (Kazakh repatriate); there is no obligatory registration as individual entrepreneur subject to certain conditions; individual entrepreneurship may be conducted either by the individual entrepreneur him/herself, or jointly with his/her spouse. There is no obligatory registration as individual entrepreneur (for certain types of activity) in Belarus, like in Kazakhstan, except that there is a lim it imposed on the number of individuals (physical bodies) who are entitled to work for an individual entrepreneur (not more than three individuals who are the members of his/her family, next of kin). Foreign nationals may be individual entrepreneurs in Russia and Belarus, unlike in Kazakhstan.


Mrs. Velikova pointed out to the differences between bilateral agreements on the procedure for sojourn of nationals of a CU and CES member country in another member country which contradict the four basic freedoms of integrated unions: free movement of goods, services, capital, and labor force. The requirements provided for by the bilateral agreement between Russia and Belarus, whose respective provisions should be applied to Kazakhstan, are more consistent with the basic freedoms. Mrs. Velikova suggested to update and amend the bilateral international agreement between Russia and Kazakhstan on the procedure for sojourn of nationals or conclude a respective multilateral agreement between all the counties within the Customs Union and the Common Economic Space.


Mrs. Postnikova in her report on “Creating economic conditions for the development of the financial sector and investment inflow to the Customs Union member countries” presented the history of legal and contractual basis of the Common Economic Space, dynamics of the financial market indicators in the EuroAsian Economic Community member countries in H2 2013 and macroeconomic indicators, as well as predicted values of the economic development key indicators in Russia, Belarus, and Kazakhstan for the period until 2016.  [Presentation to the report]


16 Января

January 16

Head of International Center for Fiscal Sustainability Research at Gaidar Institute, Boston University Economics Professor Laurence Kotlikoff held an expert roundtable on “Fiscal gap in Russia and the U.S.A.: How close or far we are” which covered such issues as the threat of fiscal gap in Russia, fiscal gap in European countries, and comparison between Russia and the United States, measures of narrowing the fiscal gap in Russia, forecasting the principal parameters of the Russian budget system. The discussion was moderated by Deputy Head of International Center for Fiscal sustainability Research Maria Kazakova.


The federal budget deficit (as well as the national debt) can’t be explicitly indicative of a fiscal sustainability degree, because it leaves aside implicit budget commitments, namely expenditures of future periods. The fiscal gap is an indicator which under certain prerequisites allows just certain aspects of fiscal sustainability to be estimated. This indicator derives from the state’s budget restriction over the entire period to infinity, whereby the reduced to the current time government’s future expenditures, including national debt service costs, are covered with future revenues. The fiscal gap is therefore a measure of balancing the current fiscal policy and reflects the value of the government’s future expenditures which is not covered with future revenues.


Historically, the fiscal gap has been estimated for about two decades. However, this indicator has been estimated only for the United States and European countries. The Gaidar Institute Center’s estimates show that under the reference scenario of economic development the fiscal gap in Russia is predicted Rb 890 trillion in the long-term perspective, or 8.4% of the present value of the predicted GDP in Russia. The Russian fiscal gap is estimated through the following stages:


–    Demographic and macroeconomic forecasts until 2100 including population, labor force, GDP and GDP per labor force unit forecasts;
–    Forecasting budget system expenditures including pension provision and social costs;
–    Forecasting budget system revenues including oil and gas revenues;
–    Estimating the fiscal gap.


Gaidar Institute experts’ estimates are based on the official forecast of the Ministry of Economic Development of Russia (MED) and the Federal State Statistics Service of Russia (Rosstat) until 2030 under three scenarios, namely pessimistic, principal, and optimistic ones. The MED’s macroeconomic forecast until (April 2013) was used, except that GDP until 2030 corresponds to the MED’s forecast. The demographic forecast until 2100 is based on the Rosstat’s forecast of total population and labor force until 2030 (the scenarios differ in estimates of life expectancy, fertility, and migration). The forecast of GDP per labor force unit is based on the assumption that growth rates of GDP per labor force unit converge to 1.7% (the United States after 2022, according to the forecast of the Bureau of the Budget of the US Congress). The GDP forecast after 2030 is product of the labor force and GDP per labor force unit forecast. We obtain three scenarios of GDP forecast based on various assumptions on demography and labor productivity.


Additionally, in forecasting we also used the data on the natural resource reserves, in particular recoverable reserves of crude oil and natural gas (based on the data provided by the Ministry of Energy of Russia (Minenergo)). Furthermore, the share actually produced resources depends on a scenario.


The budget expenditures forecast is based on the assumption of that a part of the expenditures depends on demographic parameters, factoring in age distribution of the population and the dynamics of GDP per labor force unit. Such expenditures include expenditures on healthcare, pensions, education, social policy, and communal services. Non-demographic expenditures include national defense, security and law enforcement, nation-wide issues, national economy, and are expected to be fixed as percentage of GDP.

The forecast of revenues includes, first, the oil and gas revenues forecast factoring in different prices under different scenarios and depletion of resources. Second, revenues determined by demographic factors (pension insurance contributions) are forecasted. And, finally, other revenues (profit tax, income tax, taxes on imported goods and other revenues) are expected to be fixed as percentage of GDP.


Considering these assumptions, under the principal scenario for long-term budget stabilization primary deficit should be reduced 8.4% of GDP in 2013 and all the succeeding period

  • either through a 29% increase in revenues (taxes) ;
  • either through a 22% contraction of expenditures ;
  • through a certain combination of the foregoing measures.

The results obtained by Gaidar Institute’s specialists may cause surprise, because Russia has huge reserves of energy resources and financial assets which exceed Russia’s official debt. At the same time, one should realize that Russia’s energy resources are finite, which is not the case with expenditures. Additionally, it is the Russia’s population ageing along with its pension system’s huge commitments and other budget commitments associated with ageing of the population (e.g. healthcare) that result in such a considerable fiscal gap.


To compare: the fiscal gap in the United States is currently accounting for 10% of the present value of the future GDP in the country. Such a fiscal gap in the United States has been caused by population ageing in combination with excessive growth in transfer payments to elder persons in per capita terms, in particular state-financed healthcare benefits provided as part of such programs as Medicare and Medicaid. Such benefits has grown since 1970 and their growth rate doubled that of GDP per capita. In the decades to come these indicators are predicted to keep growing at a faster rate than GDP per capita. Today, the US pension expenditures and healthcare expenditures are beyond $30,000 per pensioner, doubling the per capita income in Russia.


Certainly, the value of fiscal gap in Russia obtained by Gaidar Institute’s experts should be interpreted with due regard of simplifying assumptions accepted during estimation. Nonetheless, our conclusions can be used for the development of recommendations on how to secure budget equilibrium in the long-term perspective. Furthermore, the fiscal gap estimation algorithm allows the effects of changes to the current fiscal policy to be measured.


Presentations to reports:

Head of International Trade Department Akexandr Knobel held a roundtable on “Economic growth and the development of institutions in Russia in the context of interaction with the external world”.

While globalization processes develop worldwide, any particular country’s integration with the rest of the world and international trade as part of this integration have an increasing effect on the development of the economy, institutions, fiscal policy. Russia constitutes no exception to this rule, and the Russian economy’s dependence on global markets adds further credence to this. The development of Russia and its interaction with other countries is combined with the specifics of natural resource dependence and related extra economic, trade and fiscal risks which must be considered along with the Soviet era legacy and the need to learn from the economic history.
The experts considered the following issues during the discussion:

•    Specifics of the development of integration processes in resource-rich countries;
•    Potential effects of economic integration with the developed countries;
•    The effect of export costs upon trade and economic development;
•    The depth and effects of Eurasian integration;
•    The regional policy lessons.

Lead legal counsel of Gaidar Institute, researcher at Applied Economic Research Institute under the Russian Presidential Academy of National Economy and Public Administration (RANEPA) Irina Tolmacheva moderated a roundtable on “Developing endowments in Russia”. An important task to be addressed with the participation of non-profit organizations is to support such a mechanism, make it recognizable by government authorities, society, mass media. The participants in the session – experts, representatives of non-profit organizations and asset managers – discussed some topical issues. 

Mrs. Tolmacheva opened the session and made a report on the performed scientific and research work on building up and using endowments in 2013. The relevance of the study is determined by the need to further develop this innovative tool – NPO endowment – introduced into the Russian practice by the adoption of the Federal Law “On the Formation and Usage of Endowment of Non-Profit Organizations” No. 275-FZ of 30.12.2006. Endowment characteristics and basic results of the work associated with proposals on streamlining laws and regulation for endowment were presented to the participants in the session.

Head of NPO and Social Investment Department at ZAO Gazprombank – Asset Management Lyudmila Panteleeva reported on the evolution of the endowment market in Russia since 2007 and its current status. She noted that the preset rate of development has been maintaining positive trends, new endowment funds tend to emerge, endowment assets have been growing.

Deputy Director General of TRINFICO Property Management LLC Dmitry Sokolov told about investment specifics and modern investment trends in endowment funds. He also noted that endowment assets have been growing at very high rates. However, Russian assets account for merely 0.04% of GDP vs., e.g., 3% in the United States. Furthermore, Mr. Sokolov told about long-term challenges confronting asset managers, namely ensure a real yield of 5% and prevent endowments from inflation-related impairment. According to D. Sokolov, alternative investment strategies (real estate, venture companies, commodity markets etc.) should be expected to grow in the near term.

Chairman of the Board of the Phystech-Union on Support and Development under the Moscow Institute of Physics and Technology (MIPT), Director of the Strategic Development Center under the MIPT Yury Alasheev pictured the evolution of the US endowment model. According to Mr. Alasheev, endowment funds in modern US higher education institutions constitute one of the three main business lines along with education services and research activity. Mr. Alasheev believes that the MIPT as non-profit organization at the stage of establishing its own endowment fund in Russia and having an adverse experience of cooperation with a foreign asset manager needs to establish a tradition to donate to the Alma Mater among the graduates.

Head of the Endowment Group at the Financial University under the Government of the Russian Federation Olga Subanova reported on the available resources provision for sustainable development of Russian endowment funds. She noted that the Financial University’s experience of fundraising to its own endowment. According to Mrs. Subanova, Russian endowments develop through mutual efforts of stakeholders of long-term development of non-profit organizations: the endower – NPO – asset manager. When she asked whether endowments in Russia can provide resources for sustainable growth in this country, Mrs. Subanova answered that, of cause, they can, to the extent that the endowment concept is popularized, the issue of shortage of fundraising specialists addressed etc. (programs of co-financing of raised endows, the development of professional practice standards). 

Executive Secretary of Russian Donors Forum non-profit partnership of endowment organizations Natalya Kaminarskaya summed up the results of the session. Seventy percent of endowments in Russia are registered in the area of education and science. The participants expressed their mutual opinion of having to do a lot to achieve the values of foreign endowments, including introduce amendments to laws, develop the culture of endowing, enhance transparency of asset managers and endowments. Special emphasis was paid to endowment funds’ strong need to create their own well-known brand.

Presentations to reports:

Director of the Center for Macroeconomics and Finance Pavel Trunin moderated a roundtable on “Monetary policy amid economic turbulence” which was attended by representatives of the Bank of Russia, expert community, research and financial institutions. The participants in the roundtable discussed main challenges in the monetary policy faced by the Bank of Russia. The following main challenges were covered : 

- the importance of maintaining a stable banking system against the backdrop of aggravating problems in the consumer lending ;
- the need to further slow down inflation under the circumstances when at the 2013 year end the Central Bank of Russia failed again to achieve the stated goal for inflation ;
- problems in ensuring further increase in the money supply amid high degree of depletion of the collateral against which banks may obtain refinancing from the Central Bank of Russia ;
- the need to factor in slowdown of economic growth rates in conducting the monetary policy.
Foreign exchange policy was an important issue covered in the discussion. Overall, the participants in the roundtable were unanimous in that the policy of enhancing flexibility of the ruble is effective. Furthermore, it was emphasized that the Bank of Russia had made a lot to enhance the effectiveness of its interest rate policy, yet, of cause, it has potential for further development.
The participants in the discussion noted that the Bank of Russia should pay more attention to explaining its policy, including but not limited to the development of more detailed guidelines of the unified national monetary policy.


A roundtable on “Governmental intervention: close to a redline” was moderated by Head of Institutional Development Department at Gaidar Institute Konstantin Yankovsky and included a few reports on the domestic and foreign experience in state expansion. The session was attended by Director of Energy Policy Institute Vladimir Milov; Deputy Head of Foreign Economy and International Relations Department of the Moscow Government Vakhtang Partsvania; senior researcher at the Center for Political Economy and Regional Development at Gaidar Institute Sergey Zhavoronkov; Alexey Ulyanov from the Federal Antimonopoly Service of the Russian Federation (FAS).
Mr. Milov presented a comparative analysis of the development of oil and gas industry in Russia: production was growing steadily in the former case, whereas stagnated in the latter case. Growth figures also plunged in the oil industry as it became more regulated.

Mr. Partsvania told about the Moscow energy sector and a conflict of interests between the state as asset owner (seeking a profit) and the regulator (seeking low tariffs) which seems to be settled in favor of monopolies’ profit and consumer losses.

Mr. Yankovsky presented data on budget deficit in the developed countries and linked the long-lasting budget deficit in time of peace with the universal suffrage and the emergence of a large group of spending units.

Mr. Zhavoronkov told about paradoxes of “combating discrimination” which has acquired a new meaning of forced statistic parity between men and women in all occupations despite that statistics of admissions to various facilities shows stark gender-related differences in preferences.
Mr. Ulyanov told about analysis of the FAS’s practice. The analysis shows that the FAS have mostly been investigating into cases against small and medium-sized businesses, whereas cases of prosecution against large enterprises have been rare. He also focused on the threat of delegating special powers to civil servants under the pretence of protecting competition.


A roundtable on “How is inflation forecasted in Russia?” was moderated by Marina Тuruntseva (Applied Economic Research Institute under the Russian Presidential Academy of National Economy and Public Administration (RANEPA), Gaidar Institute) and dedicated to methods used in predicting various types of inflation in Russia at horizons which differ in length, specifics of these methods and related issues.

The roundtable was attended by Gennady Kuranov (the Ministry of Economic Development of the Russian Federation), Luybov Strizhkova (Institute of Macroeconomic Research under the Ministry of Economic Development of the Russian Federation), Alexandr Shirov (Institute for National Economic Forecasts under the Russian Academy of Sciences), Vladimir Salnikov (Center for Macroeconomic Analysis and Short-Term Forecast), Natalya Raiskaya (Institute of Economics under the Russian Academy of Sciences), Jakov Segiyenko (Institute of Economics under the Russian Academy of Sciences), Alexandr Frenkel (Institute of Economics under the Russian Academy of Sciences), Maxim Petronevich (Gazprombank), Yekaterina Astafyeva (Applied Economic Research Institute under the Russian Presidential Academy of National Economy and Public Administration (RANEPA)), Victoria Petrenko (Gaidar Institute).

Presentations to the reports:

Head of Tax System Development Department at Gaidar Institute Natalya Korniyenko attended a roundtable on “Enhancing Russia’s competiveness in international trade: the role of technical regulation” and made a report on “Enhancing the technical regulation framework in protecting intellectual ownership rights in the Russian Federation”.
Тезисы доклада [Theses of the report]

17 января

January 17

Director of Center for Political Economy and Regional Development Irina Starodubrovskaya held a roundtable on “Urban areas and agglomerations amid urbanization: the Caucasian refraction”. Such issues as social challenges of intensive urbanization, traditions and modern in the presentday North Caucasian urban areas, urban community, and conflicts I n the North Caucasus were covered at the roundtable.

Senior researcher at Gaidar Institute Konstantin Kazenin made a report on “Social motives and the conflict potential of urbanization: the case of small and medium-sized urban areas in the North Caucasus”. In particular, Mr. Kazenin noted that urbanization in the presentday North Caucasus differs from a “classical” urbanization in that in urban environment the former offers less breakage of the links established by the traditional rural society. Anticipating further development of migration to urban areas, as well as identifying the conflictogenic potential of urban environment should be based on analysis of motives for moving from rural areas to a particular urban area. For this purpose, a survey was conducted at a few small and medium-sized urban areas in the North Caucasus (at least 50 interviews in each of the surveyed towns). Three specific features pertaining to the urban community which are decisive I n making a decision to move to a particular town were identified.

Mr. Kazenin presented key conflictogenic factors available at North Caucasian small and medium-sized urban areas, namely ethnically driven deployment of posts at local governments, jobs in the state-funded sector; land allotment for development; norms of the “traditional society” in family life (intergenerational conflict).


Head of Applied Institutional Studies Department at Gaidar Institute Vladimir Komarov held aroundtable on “Efficient governance in a knowledge-driven economy: social involvement opportunities” which was attended by Executive Director of Wikimedia RU NPO Stanislav Kozlovsky; senior lecturer at Lomonosov Moscow State University Vitaly Tambovtsev; Head of Institutional Analysis Department, Faculty of Economics at Lomonosov Moscow State University Vladimir Ivanov; Head of Economics of Science and Innovations Department at the Institute of World Economy and International Relations of the Russian Academy of Sciences Irina Dezhina; senior researcher at Gaidar Institute, Head of Innovation Economy Department at Gaidar Institute Vera Barinova; Deputy Director General of the Moscow State-Funded Entity “Innovative Development Center” Pavel Swistunov; senior researcher at RANEPA Alla Sorokina, Deputy Executive Director of the Association of Innovative Regions of Russia (AIRR) Anton Chuklin.
The experts considered the following issues during the discussion:New trends in knowledge management, open innovation ;

  • New trends in knowledge management, open innovation ;
  • Social capital quality and opportunities for social participation ;
  • Joint works technologies and tools , crowdsourcing ;
  • Open data and e-government ;
  • Urban and regional projects, engaging local communities.

In his presentation Vladimir Komarov stressed a new role of social involvement in the economy. According to the moderator, the developed countries have recently been upgrading the existing governance model, introducing social knowledge and competence (intellectual potential of the society) at all levels of decision-making, thereby providing a new to economic growth factors in the economy. Regarding traditional growth factors such as labor, capital, and technologies, the following material changes have been considered: first, a new role of corporate effort and team work has been maturing; second, the priority of human and social capital has been increasing; third, network information and communication technological solutions reducing the costs of team work and exchange of knowledge have been engaged.


A roundtable on “Using the WTO tools for the benefit of national agricultural producers” was held at the same time. Its moderator, Director of the Agricultural Policy Center under the Russian Presidential Academy of National Economy and Public Administration (RANEPA), PhD in Economics, Natalya Shagaida, noted that discussions on the agricultural industry in Russia in t he context of WTO are normally of adverse nature. This is reasonable, because a country needs some time after its accession to change its custom paradigm of state support of the agricultural sector.

Speaking of state support, they normally provide data on budgetary subsidies to the agricultural industry. In Russia, however, more than 2/3 of the support was provided through transfers from consumers of agricultural products: the state used to impose import duties on a wide range of agricultural products to maintain higher internal prices, the population and processing enterprises used to pay such prices for agricultural products, and it was agricultural producers who generated revenues from this.
Abolishing or reducing the duties – if the existing amount of support is intended to be retained – requires stronger budget support. Indeed, in the EU member countries, e.g., agricultural subsidies are much higher. However, increasing agricultural budget expenditures depends, on the one hand, on the budget capacity at all levels, on the other hand, the lim it on the level of aggregated supportive measures provided for by the Protocol of Accession of the Russian Federation to the World Trade Organization (WTO). Even if the current level of support is retained, after 2016 it would exceed the level permitted by the Protocol of Accession.

Why others are allowed, whereas there is lim it on Russia? This is because Russia provides about 60% of public support measures which are amber box. Amber box measures are subject to limits. However, these measures are aimed at what is most vital for technical and technological modernization, not increasing production of most of the products being in short supply. However, the same issues of modernization and incentives are being faced by the governments of other countries which address these issues within the framework of the WTO Agreement, i.e. the WTO offers mechanisms enhancing sustainability of agricultural production, and Russia has to learn how to use them.

This is why a survey was conducted in 2013, including a study of mechanisms of adapting Russian support of the agricultural industry to the WTO requirement. For instance, even adapting the existing measures of support under the State Program until 2020 will allow the volume of amber box measures to be reduced from 60% to 24%, although the industry will keep receiving subsidies. Additionally, possibilities to enhance support without having to breach the WTO Agreement were identified. Chief researcher of the Russian Presidential Academy of National Economy and Public Administration (RANEPA) Professor Vasily Uzun presented the results of the survey at the roundtable.
Representatives from countries having different kind of adaptation experience shared their knowledge on how to take advantage of the opportunities offered by the WTO in undertaking modernization and providing incentives for manufacturing: Martin Petrik (Germany, Deputy Head of Department of External Conditions for the Development of Agriculture and Policy Analysis under the Institute of Agricultural Development in Central and Eastern Europe), Urgita Stakenene (Lithuania, Head of Rural Development Department at the Ministry of Agriculture of Lithuania), Mikola Pugachev, Deputy Director of National Research Center “Institute of Agricultural Economics”. The reports presented at the roundtable sparked a lively discussion.