On September 27, experts of the Gaidar Institute took part in the panel discussion “Scenario Planning. Challenges and Threats of the Near Future. Applications for Private and Banking Business” within the framework of the Tashkent International Management Forum, which was organized by the Banking and Finance Academy of the Republic of Uzbekistan, the Russian Institute of Directors (RID), Kazan Federal University, and the RANEPA Graduate School of Corporate Management.

Vedev-27.09.2021.jpgDSM-27.09.2021.jpgAlexey Vedev, Doctor of Economic Sciences, Head of the Financial Studies Department, and Sergey Drobyshevsky, Doctor of Economic Sciences, Scientific Director, participated in the discussion as experts.

Alexey Vedev noted that the crisis that had hit the world economy was unlike any of the notable shocks of several recent decades. In the current conditions, the goal of achieving a sustainable economic growth trajectory remains a key issue. The pandemic produced negative shocks both on the demand and supply sides.

According to the year-end results of 2020, the Russian economy suffered a decline in GDP at the level of 3%, mainly due to the collapse of small and medium-sized businesses. The economic instability was produced by a variety of factors, one of them being the unstable Russian ruble. According to Alexey Vedev, this had to do with the fiscal rule, and also with the fact that target companies are not interested in a weak national currency and they strive to offset all their ruble-denominated costs.

Stagnation represents the main risk for the Russian economy, and so the key task for economists is to establish corrective growth, unless this situation is to be accepted as a new reality.

There is every reason to believe that from 2022 onwards, the Russian economy will slow down, which is associated with inflation acceleration in 2021. Real disposable personal income has been demonstrating growth, but the prospects for its ongoing growth appear doubtful in view of the current rise in inflation and the growing volume of mandatory payments on loans, as well as an increasing tax burden. The stably high demand in 2021 had a positive effect on retail trade turnover, and it is demonstrating a steady growth. At this rate, a return to the pre-crisis trend is expected in 2022.

Sergey Drobyshevsky began his presentation with a brief historical review of world systemic crises. Until 2007, the world had been experiencing high growth rates, which seemed to be the result of emerging economic and political innovations. However, in 2008, a global economic crisis broke out, thus shaping the future development trajectories of the world’s leading countries. It was called a structural crisis, because it spanned across different spheres of socio-economic life and triggered changes in the habitual economic policy paradigm, creating new conditions and models for doing business. These are systemic crises that we know from the experience of the Great Depression of the 1930s and the protracted crisis that hit the developed economies in the 1970s. They are characterized by several general patterns. One of these patterns is shaped by in-depth institutional and technological changes, which occur on a national level and worldwide and transform the technological base, thus bringing the economy to a qualitatively new performance and labor productivity level. Another characteristic feature is the difficulty in achieving a sustainable growth trajectory, which necessitates structural and institutional modernization. 

By way of conclusion, Sergey Drobyshevsky presented some alternative short-term and long-term global economic development scenarios. Under a favorable development scenario, the pandemic containment measures are lifted, and the priority development course that a country has chosen is oriented to promoting economic growth. However, there also exist unfavorable factors influencing the world economy, which have been discussed for a long time already. In particular, these include the risk of a crisis in the US financial and debt system, as well as the likelihood of an economic development slowdown in China and ongoing trade wars between the USA, China, and Europe. The correct choice of a development priority will make it possible to plan appropriate activities in every field, achieve some success, and find smart solutions to the global problems.

On the part of the Gaidar Institute, the forum was also attended by Executive Director Sergey Prikhodko, Director of the Center for Macro-Economics and Finance Pavel Trunin, and Head of the International Trade Department Alexander Knobel.