Gaidar Forum 2018: Day Two

The morning of the second day of Gaidar Forum 2018 began with several open panel discussions.

One of them was an expert discussion titled "Russian Tax System: Vision of the Future". Its moderator was Rector of the RANEPA Vladimir Mau.

In 2018, Russia's tax system will celebrate its 20th anniversary. It began to be created when this country had neither tax legislation nor tax agencies nor taxpayers. Since then, it has passed a long way and accumulated a unique experience of building a tax system fr om scratch within the shortest possible period of time. A lot has been achieved, but there also have been many mistakes and unresolved issues. The next task will be that of determining the directions of further development. In the course of the discussion, the following issues were raised: new technologies and tax policy; globalization and competition of jurisdictions; integration of tax administration mechanisms and regulation of a variety of fiscal payments; an optimal balance between the efficiency of the federal tax system for businesses and its efficiency for budgets; judicial practice and tax policy.

The keynote report was presented by Chairman of the Committee on Budget Issues and Taxes of the State Duma of the Russian Federation Andrey Makarov.

In his report, Mr. Makarov put forth several fundamental statements, including the following: 1) today, prevailing legislation is an obstacle to the tax system's development; 2) the RF Tax Code has ceased to function as a directly applicable law; 3) the RF Tax Code is actually being revised by numerous recently passed by-laws; 4) it is necessary to make a choice — whether to 'rewrite' the RF Tax Code, or to alter the existing tax system; 5) today, our tax system is not competitive, because the tax load is on the rise; 6) it is necessary to distinguish between tax and non-tax payments; 7) additional money should be derived not fr om an increasing tax load, but by way of economic growth; 8) in order to generate additional tax revenue, it is necessary to more efficiently spend the available resources, rely on tax administration, and set priorities for budget allocation; 9) VAT, and indirect taxes in general, should not be raised — it is necessary to introduce tax on consumption; 10) by their nature, neither pension insurance nor medical insurance has anything to do with insurance per se, they represent a pure tax burden, and today this burden is being borne by hi-tech companies.

The discussion was participated by Chairperson of the RF Accounts Chamber Tatiana Golikova, RF Minister of Finance Anton Siluanov, and Head of the Federal Tax Service Mikhail Mishustin.

The head of the RF Ministry of Finance asserted that it was not intended to increase the existing tax load in the nearest future. According to him, the priority now was to trigger the shrinkage of the shadow sector, which should become the source for additional revenue to be used for covering expenditure.

Anton Siluanov said that it was necessary to alter the structure of the tax system in order to improve its competitive capacity, to readjust the tax system in such a way that it could become capable of working towards the main goal of economic growth, to introduce proper measures conducive to increasing the tax system's transparency and technological arsenal, so that it could become possible to trace the movement of goods from the customs to the cash desk.

RF Minister of Finance also answered the moderator's question concerning the announced tax amnesty. He believes that the results of the 2016 capital amnesty in Russia were far from being impressive – taxpayers filed only some 7,200 tax declarations; however, the RF Ministry of Finance hopes that the new amnesty, which was signed into law by the RF

President in 2018, will be more successful, because now Russia has proper conditions for capital repatriation.

'Of course, we — perhaps — have expected to achieve better results. But the main issue is trust: suppose the information on registered companies and bank accounts should be leaked to the media, then the law enforcement system will immediately make hue and cry and start to harass us, and so on', he explained.

Chairperson of the RF Accounts Chamber Tatiana Golikova dwelled on her own proposal, voiced on the previous day, that the welfare funds should be merged. In this connection, she emphasized the need to handle these welfare funds and welfare benefits with extreme caution.

The experts who participated in the session were President of the Russian Uni on of Industrialists and Entrepreneurs Alexander Shokhin; President of the All-Russian Public Organization Business Russia, Chairman of the Board of Directors of R-Farm Group Alexey Repik; President of the All-Russian Public Organization of Small and Medium-Sized Businesses Support of Russia Alexander Kalinin; Acting Governor of Ivanovo Oblast Stanislav Voskresenskiy; Governor of Ryazan Oblast Nikolay Lyubimov; Governor of Perm Krai Maxim Reshetnikov; and Head of the Department for Tax and Legal Consulting at KPMG (for Russia and the CIS), Public Ombudsman for Taxes under the Business Rights Commissioner under the President of the Russian Federation Mikhail Orlov.

The open panel discussion Business and the State: Models of Partnership in the IT Age was predominantly focused on IT technologies. According to the moderator of the discussion, First Deputy Head of the RF Government Maxim Akimov, these technologies have become the basis for a profound transformation of all aspects of social life, including the economic system, the state policy, and social relations.

The discussion was opened by Vice President of Cisco’s Innovative Development Guy Diedrich, who touched upon those new trends in IT technologies that are confidently expected to change our way of life. At the same time, he called cyber security the most important problem brought about by the advent of IT technologies.

CEO and Chairman of the Executive Board of Sberbank Herman Gref noted that there was no point in following all the latest developments in the IT field because these could not possibly be caught up with. Therefore the main issue on the agenda is the task of priority-setting for businesses — that is, which trends can be actually taken advantage of in each specific sphere, and which technologies will actually remodel our future. According to him, the CEOs and managers of companies have become paranoid in face of the rapidly changing technologies, as they are plagued by fear that they will not be able to catch up with them, and so will be among the losers. So, corporate managers, on one hand, must be open to the new world and follow all the relevant technological developments, while on the other, they must understand that they are responsible for setting correct priorities.

RF Minister of Economic Development Maxim Oreshkin spoke of the technologies designed to change the everyday life of this country. He believes that these technologies will be remote identification systems, automation based on artificial intelligence, and platform solutions. Thus, remote identification systems can eliminate the numerous intermediaries between consumers and suppliers of services, which is very important for the banking sector and state administration. Another tool that will bridge the gap between producers and consumers will be platform solutions, which are currently used in E-commerce, logistics, healthcare, and education. Mr. Oreshkin also expects that telemedicine can become an important factor in improving the quality of medical services in the regions.

In her presentation, Deputy Chairperson of the Central Bank of the Russian Federation Olga Skorobogatova touched upon the issue of banking security and the role of the RF Central Bank in introducing IT tools across the banking sector. She noted that with the introduction of continually improving new technologies, the bulk of banking services are now rendered in a remote mode. 'The role of the regulator is to promote security and to protect citizens' rights in the course of providing remote financial services. The Bank of Russia views its role as that of body capable of identifying risk zones and assisting in their elimination, as well as of understanding and building the model of a competitive market under the new conditions', explained Olga Skorobogatova.

The moderators of the morning expert discussion Trianon Dialogue: Development of Russian-French Education Cooperation were Academic Director of the Gaidar Institute, Rector of the Russian Foreign Trade Academy Sergey Senelnikov-Murylev; and President of University of Nice Sophia Antipolis Emmanuel Tric.

The Russian-French cooperation in the field of education and science is characterized by a large number of joint educational programs, student and academic exchanges, and joint research projects. Both countries are implementing multistage projects designed to strengthen the positions of universities in the international educational space, including projects aimed at the development of education export. A promising format of international educational cooperation is represented by network projects as exemplified by the Russian-French University founded in 2016. The initiative of the Presidents of Russia and France at their meeting on May 29, 2017 ushered in a new stage in the development of cooperation between the two countries in the form of the Civil Society Forum Trianon Dialogue. Science and education will be among the key elements of this format, thus giving momentum to the launch of new projects.

The participants in the discussion were offered the following issues for consideration: the strategies designed to strengthen the positions of Russian and French universities in the international market; the role of universities in the cooperation of civil societies of Russia and France; new formats of cooperation under the conditions of globalizing education (network projects in higher education); the experience of Russian-French cooperation in education and science; French-Russian University as a means for training personnel for the French companies in Russia. The session also included the analytical report presentation titled Russia and France in the Global Educational Space.

The discussion was opened by First Deputy Minister of Education and Science of the Russian Federation Valentina Pereverzeva, who noted Russia's interest in the experience accumulated by France in the field of education, and also the important fact that France was the country that topped Russia's list of international educational programs, the two countries having signed more than 200 joint agreements between universities.

This theme was further developed by Olivier Guillaume, Counselor for Cooperation and Cultural Action at the Embassy of France in Russia. He noted that there indeed existed prospects for cooperation, but there were also three major challenges. The first one is the ever-increasing number of students in France – by about 4% per annum. So it becomes more difficult to sel ect international students. The second challenge is the high number (150,000 per annum) of foreign students in France. These facts point to the need to deal with language barriers and the ability to issue dual degrees. The third challenge is posed by the task of finding the best ways of combining education and research. In this country, these two fields used to exist separately, and we must merge the institutions actually capable of combining these functions. It is necessary to involve the best doctorants in these activities. By way of summing up, Mr. Guillaume suggested that next year's theme should be University of the Future.

Pascal Cauchy, Attache for University Cooperation at the Embassy of France in Russia, described the current cooperation in the education sphere. He remarked that one important theme is internationalization, including studying and research at universities. Another relevant theme is mobility. Our two countries have impressive experience of welcoming foreign students. The USSR actually received students from foreign countries, while foreign students studied in France at the time when she possessed an overseas colonial empire.

Mr. Cauchy believes that the language of studying is important, and so far no answer has been given to the question as to whether studies should be conducted in a country's national language or in English. There also exist questions with regard to compatibility of study courses and the sources of funding. When students arrive in their thousands, the financial issue inevitably gains in relevance.

According to Mr. Cauchy, possible solutions can be provided by curricula specially developed for foreigners. In this connection, the language issue arises once again, with the question as to whether an additional language learning course should be added.

The inclusion in international rankings gives rise to thoughts regarding international competition. And Russia also faces these challenges - for example, the issue of the size of university. In France, universities are merging. Their cooperation should not be based on improvisation, universities must think very carefully about the forms of their cooperation.

President of University of Nice Sophia Antipolis Emmanuel Tric continued the theme of ongoing changes in universities. He said that today, France is undergoing a revolution in education, similar to that experienced in 1968. One of the elements of that transformation is the new methodology practiced in establishing international links; thus, cooperation is strengthening.

Mr. Tric pointed to the fact that in France, 95 universities are merging into clusters. It is expected that by doing so, they will be able to attract resources and develop international cooperation more easily. Besides, research universities must be involved in territorial development.

A special presentation was delivered at the session by Igor Bartsits, Director of the Institute of Public Administration and Civil Service at the RANEPA. According to his statement, Russia currently receives less than 1% of the total profits in the global education market. Our standing in international rankings is likewise not very brilliant. At the same time, there are many similarities between the education systems of Russia and France, but the majority of joint programs are oriented to Master's degree. At present, the two countries still differ in the length of their education courses, the content of curricula, and only few students participate in joint programs (up to 10 students per group). Historically, Russian universities stayed apart from international cooperation. However, now we may hope to establish cooperation with the world's leading universities on equal terms.

Director of the International Department at the RF Ministry of Education and Science Igor Ganshin in his presentation underlined the fact that cooperation with France had always been important for Russia. The key word in this connection is dialogue, which involves, beside the ministries, also civil society. A certain limitation to cooperation is absence of foreign language skills (in Russian and in French), and it takes longer time to master either of the two languages than it takes to learn English.

The Ministry works in various directions, one of them being the removal of administrative barriers, including those that apply to students. In addition, according to Mr. Ganshin, the existing normative base regulating the international Russian language sections should be altered. These sections are already more than decade old. Simultaneously, a campaign designed to promote the Russian language in France has been launched.

Vice-Rector of MGIMO University Andrey Baykov shared the experiences of his higher educational establishment. Since 1991, it has collaborated with Sciences Po (university) and borrowed a lot from its best practices, including the subjects included in the curricula and Master's degree courses.

Leading Researcher of the Gaidar Institute for Economic Policy Irina Dezhina described the current Russia-France cooperation in scientific research on the basis of her recently completed study, which included 39 interviews with Russian and French scientists working in a variety of fields. The core questions were concerned with the start of cooperation and the reasons for its termination, the key problems, and the factors determining cooperation stability. The key role in establishing contacts belongs to conferences and publications, through which scientists can learn about the studies conducted by their peers. The existing problems mostly have to do with finances and logistics. The French side has also noted the pressure associated with the need to prepare publications, which complicated the life of Russian scientists and prevents them from properly getting involved in their planned studies. And finally, partnership stability is determined in the main by two factors – its scale and duration (very modest so far) and language fluency. English is not used in every field of science, while being fluent in a partner's native language grants substantial social and cultural advantages.

Dmitriy Grishankov, General Director of the ASR, told the audience about his own international ranking of Moscow universities (titled Three Missions of University), wh ere Moscow State University turned out to be ranked much higher than in the better-known international rankings. The estimations did not include the reputation index, being based only on quantitative data with due regard for national specificities (for example, the number of winners in school contests, etc.).

The next speaker was Vladislav Grib, Chairman of the Russian Professors Assembly and Head of the Department of Civil Society at MGIMO University. He emphasized the essential role of professional researcher associations as elements of civil society. Then, Dean Associate of Neoma Business School Celine Davesne described the activities of French businesses in the education sector. Thus, in particular, her own institution can acts as an educational consortium and study the actual needs of Russian and French businesses.

The French participants in the subsequent discussion focused on the increasing difficulties in visiting Russia for businesses, caused both by the new visa regime and the problems with finding appropriate partners in Russia, difficulties in doing business in some Russian regions and arranging on-site training courses at Russian companies. Nevertheless, the tone of her report was definitely optimistic: business cooperation needs to be further developed.

Alexander Radygin summed up the discussion by saying that it provided opportunities for fruitful exchange of opinions, helped identify the problems that must be taken in consideration and overcome by applying joint efforts. The undoubtedly positive aspect of this activity is that the set of bilateral cooperation formats is constantly being expanded.

The Open Dialogue titled Contemporary Challenges for Public Administration focused on the global challenges that determine the new requirements to public administration. In his opening address, RANEPA Rector Vladimir Mau noted that the advent of modern technologies had made countries compete not in their proximity to resources, but by the level of development of their public administration systems, which must become more comfortable to deal with for businesses and individuals. In his opinion, the future role of the State will be reduced to ensuring the sustainability and predictability of that system.

In his presentation, CEO and Chairman of the Executive Board of Sberbank Herman Gref outlined the public administration goals in the IT age. He believes that the fundamental goal is to make the public administration model more flexible and to implement in the existing public administration system the IT tools elaborated in the business sector specifically for businesses. 'It is necessary to rely on the best practices available in the business sector. Best practices can only be created in a competitive environment – only by businesses. Therefore it is necessary to adapt these practices to the public administration system in order to improve its flexibility', said Mr. Gref.

In his opinion, the core component that can unify the entire public administration reform is platform. 'When we speak of business, we frequently use the word platform or platform solutions, by which we mean aggregates, huge capacities, data processing factories', explained Mr. Gref.

He went on to say that 'megadata and artificial intelligence help make the decision-making process more precise. Success in management, in business is determined by the number of correct decisions. Their precision depends on availability or lack of information, which is derived from data. One must avoid making decisions in conditions of uncertainty and lack of information'. Then Mr. Gref pointed out that some elementary decisions like the issuance of a passport, certain documents, or pensioner ID cards, must be effectuated without human participation, on the basis of an algorithm.

'The current goal of public administration is not to try to reproduce the experiences of yesterday, even if these represent best practices, but to move forward and try to live in the future. Public administration is changing its shape, it is becoming convenient and less noticeable for individuals. Public administration must provide correct data processing. In future, it will become more service-oriented,' concluded Mr. Gref.

The discussion was continued by Vice-President and Head of Institutions and Society at the Center for Strategic Research Mariya Shklyaruk, who presented a number of proposals for public administration reform elaborated by the Center. She stated that the core problem encountered in the course of public administration reform started back in 2004 had been its consistency in absence of strategic priorities. 'We would change something in one sphere, while at the same time we would fail to make the necessary changes to public administration, there was no effective elaboration of strategic priorities, and to a certain degree strategic priorities were altogether absent', explained Ms Shklyaruk.

She argued that the main barrier to the development of businesses and the national economy at large had remained the rigid regulatory environment: 'Since 2004, we have talked a lot about improving the conditions for doing business, the regulatory environment. But judging by Russia's indices of regulatory environment comfort for businesses (EFW 5C, WGI RQ), it stably ranks low. This means that businesses continue to operate in face of innumerable administrative barriers'.

Besides, Mariya Shklyaruk outlined the goals and directions of public administration reform. Thus, the goal of public administration reform must be its orientation to performance in the interests of individuals and businesses in a proper cultural, value-oriented and practical context. She pointed out that many decisions represent only imitation of real activity — they are adopted, but not implemented in actual practice.

Then Ms. Shklyaruk described the four key directions in the ongoing public administration reform:

1. Strategic management: strategy implementation by building a regulatory management system.

2. IT-based public administration (platform).

3. State-of-the-art human resources management: implementation of a human resources life cycle model.

4. Comfortable regulatory environment: deregulation, function reduction, modern regulatory policy.

On the whole, public administration reform must become an efficient instrument for launching other key reforms.

Besides, Ms. Shklyaruk elaborated on the theme of public administration as an online platform, previously discussed by Herman Gref. 'Online platforms may become a suitable feedback tool. We are certain that up to 50% of public services are rendered on an instant basis. This will produce a systemic effect on the decision-making process in the public administration sector', concluded the expert.

The afternoon panel discussion focused on The Sustainability of Economic Growth in Russia and in the World. Its moderator was Rector of the Russian Foreign Trade Academy, Academic Director of the Gaidar Institute Sergey Senelnikov-Murylev.

In 2017, the Russian economy once began to display a positive growth rate of real GDP after a nearly two-year-long decline. The global economic growth index for last year is estimated to be 3.6–3.7%, which is already near the world economic growth rates typical of the untroubled 2000s. In particular, positive growth rates could be seen in nearly every member state of the European Union and in Japan. At the same time, it cannot be confidently affirmed that the consequences of the 2008–2009 crisis have been overcome on a global scale, and as far as Russia is concerned, there is no certainty that it has entered a new trajectory of sustainable growth, and that there is no threat of a new recession, even within the short-term period 2018–2019.

The participants discussed the following issues: the factors of economic growth recovery in 2017 and the necessary conditions for growth in 2018-2019; whether Russia has indeed switched to a new growth model; the transformation of global risks as a threat to the growth of the Russian economy; whether the Russian economy is truly becoming less dependent on changes in oil prices; how robust the new budgetary rule is; a new look at the budget maneuver – the transition from the task of restoring growth to its stable trajectory; whether the investment climate in Russia has changed; can we speak of the start of a new wave of growth in the global economy.

The participants in the discussion were Governor of the Central Bank of the Russian Federation Elvira Nabiullina; RF Minister of Economic Development Maxim Oreshkin; RF Minister of Finance Anton Siluanov; Chief Executive Officer of the World Bank Kristalina Georgieva; Chairman of the Board of Directors of Renova Group, President of Skolkovo Foundation Victor Vekselberg; President of the Center for Strategic Research Foundation, Leading Researcher of the Gaidar Institute Pavel Kadochnikov.


Elvira Nabiullina said that the Bank of Russia had expected that towards the end of 2017, the Russian economy would recover after the crisis, and this was actually what happened. 'We expected that by the end of 2017, the period of recovery after the crisis-triggered downfall, if we may call it so, will be over. In fact, this did happen', she stated. Thus, the Russian Federation in 2017 demonstrated a growth rate of GDP 'approximately in those volumes and at those levels as the Central Bank had expected'.

'This is a potential growth rate, given the existing structure of the economy. In a certain sense, we are now at a turning point. Now the question is — how and on the basis of what can we grow further. Macroeconomic stability has allowed the economy to decline just moderately, but the future rate of economic growth is a challenge for us', explained Ms Nabiullina.

She also reminded the audience that, according to the RF CB's estimations, the RF economy in 2018 would grow at a rate of 1.5–2%.

In this connection, the Bank of Russia Governor warned against the euphoria that may be caused by high prices of oil, because uncertainty was still present on the oil market. 'We must, nevertheless, be very attentive to the risks to financial stability and oil prices. Now there may be a certain euphoria caused by high oil prices, but we all understand that uncertainty in the oil market has always existed, and it continues to exist,' warned Ms Nabiullina.

She informed the participants in the session that the Bank of Russia considers the inflation target set at 4% to be correct, and disagrees with the proposals that the target should be altered. 'It was suggested that we should alter the inflation target, set it at 2% as in the developed countries. We strongly disagree. We believe that for the Russian economy, which is going to be diversified, to undergo structural changes, 4% is the correct target figure,' she said, and added: 'In no case, even when one means well, can the target be changed, because the benefit of low inflation is its predictability, and that businesses and people can begin to trust us — that inflation will indeed stay at that level.'

According to Elvira Nabiullina, the RF Central Bank's policy aims at maintaining the inflation index close to 4% and minimizing any upward or downward deviations from 4%. 'Regretfully, such fluctuations do happen. We must admit this fact. And judging by our estimations, in the medium term inflation is faced with stronger risks of going above 4% than of plunging below that level,' she said.

Low inflation means a host of positive effects for the population and businesses alike, noted the Bank of Russia Governor. 'Our estimations have shown that if inflation were higher, personal incomes here would have been 'eaten up' even more quickly; it is low inflation that allows consumption to grow, increases consumer trust, and we can see it in actual practice — that consumption growth has occurred on the basis of low inflation,' argued Elvira Nabiullina.

'Therefore in my opinion, for the people this is an absolute good: low inflation, when salaries, incomes, savings are not being 'eaten up', and incomes can be planned with higher certainty. And for businesses, too, low inflation means predictability and a basis for lowering rates.'

'The more stable is the rate of inflation, the more rapidly we will be able to ease our monetary policy, and the earlier it will become neutral. So far, it has been moderately tough. The neutrality level for monetary policy is somewhere around 6%. Under the present conditions, our key rate is still above that level.' Then she added: 'Nevertheless, I would like to point out that low inflation is not simply a lucky combination of circumstances or an accident. It is, in fact, the upshot of a consistent policy.'

RF Minister of Economic Development Maxim Oreshkin called 2017 the year during which the RF economy finished its adaptation to the new external conditions, and the year of success of structural reforms. 'If one attempts to describe the year 2017 in a single phrase, I would say that this was the year of final adaptation to the altered external conditions and the year of completion of truly successful structural reforms in macroeconomic policy.'

Speaking of the development prospects for the Russian economy, the RF Minister of Economic Development stated with assurance that its year-end growth index for 2018 will certainly exceed that of the previous year. 'We will demonstrate stronger growth in 2018 than in 2017 — I think this is certain,' said Mr. Oreshkin. He also noted that, for example, Goldman Sachs predicted growth in the RF economy by 3.3% over the current year. 'But I believe that so far there have been no grounds for such optimism,' remarked the Minister.

RF Minister of Finance Anton Siluanov declared that in 2018, the RF budget would be drawn up with a surplus if the current level of oil prices should persist. 'This year, we plan that deficit will be at 1.3% of GDP. But if the market situation remains the same as today, we will achieve a surplus', he said. According to the RF Ministry of Finance's estimations, the RF federal budget surplus in 2018 will be slightly below 2% of GDP, given that the situation remains favorable.

The Minister also promised that the RF Ministry of Finance, by means of its operations in the foreign exchange market, would prevent the ruble from strengthening very sharply. 'This year, the budgetary rule will enable us not only to flatten the exchange rate, as we have already said. True, oil prices have increased, the exchange rate has somewhat strengthened. But now we have started operations in the forex market, buying foreign currency in accordance with the budgetary rule, and we will not let the exchange rate to rise sharply.' In this connection, the Minister noted that the ruble's strengthening is 'an equivalent of death' for some industries, 'because then imported goods instantly arrive, we lose our competitive capacity, and so on'.

Pavel Kadochnikov presented the forecast prepared by the Center for Strategic Research and the Gaidar Institute, in particular that in 2019–2020, the Russian economy might achieve a growth rate of 3%, and in 2024 – 4%. Meanwhile, the input of investment in that growth rate may amount to 2 pp.

In this connection, the expert warned that in conditions of a certain revival across this country's economy, it would be best not to change the rates of the main taxes, keeping them at their current level.

Victor Vekselberg agreed that growth had indeed taken place in the Russian economy, but it varies broadly across industries. As for Renova Group, in 2017 it performed successfully: the volume of investment jumped by 50%. This year, the group plans to increase its capital investment by another 50% – to 100bn.

The Chairman of Renova Group focused on the 'still persistent trends' that slow down development in the business sector. Among these, he pointed to the restricted access to financial resources, and particularly to long-term loans, saying that loans are still hard to get for business companies, including medium-sized ones, and to the continual hyperactivity of the controlling agencies, which is a manifestation of the general lack of trust in businesses.

Besides, according to Mr. Vekselberg, the load on businesses in real terms is on the rise in the Russian Federation, although the main taxes have remained stable. 'Yes, no doubt, the

fundamental components of the tax system – profits tax, personal income tax, VAT – have remained stable for a sufficiently lengthy period of time, and it can be hoped that they will not be changed in the short term. But at the same time, a lot of governmental acts are being issued, which are altering the real load on businesses.'

Then Mr. Vekselberg explained that he meant, in particular, the decisions concerning the introduction or abolition of tax exemptions, adjustment of certain tariffs, the environmental protection measures introduced in connection with regulatory acts. 'Taken together, these numerous alterations result in a situation wh ere the real load on businesses is growing, the stability with regard to the main tax parameters notwithstanding,' complained the CEO of Renova Group.

Besides, the business community expects that the authorities should practice more transparency when adopting some decision or other. 'I should like to draw your attention to the fact that the business community, and particularly the Russian Union of Industrialists and Entrepreneurs, have repeatedly raised that issue before the government and the president, asking that the procedure of introducing alterations would be more open and public, preceding the adoption and actual implementation of the proposed measures.' According to Mr. Vekselberg, the dialogue with the authorities is indeed underway, but frequently there appear certain mechanisms that fail to produce, in actual practice, the effects desired by the government.

Chief Executive Officer of the World Bank Kristalina Georgieva noted that the year 2017 had not been simply good — it had been excellent: for the first time in a decade, 'that which must grow (GDP), did grow, and that which must decline (inflation), did decline'.

Speaking on Russia, Ms Georgieva pointed to the improved investment climate, positive results yielded by the support of the IT sector, and better predictability.