THE GAIDAR INSTITUTE TOOK PART IN THE ONLINE CONFERENCE “THE IMPACT OF EPIDEMIOLOGICAL CRISIS ON THE ECONOMIC DEVELOPMENT”
On August 10, the online conference took place organized jointly by Gaidar Institute and RANEPA. The event focused on the discussion related to the first lessons learnt from the global epidemiological crisis and its impact on global trends of the economic development.
Alexey Kudrin, Chairman of the Accounts Chamber of the Russian Federation, Georgy Idrisov, Assistant to the Prime Minister of the Russian Federation, Alexander Auzan, Dean of the MSU School of Economics, Laurence Kotlikoff, Professor of the Boston University and Head of the International Department of the Gaidar Institute, and Jeffrey Sachs, Professor of the Columbia University, took part in the online seminar.
Vladimir Mau, Rector of RANEPA, moderated the discussion. In his welcome address, he underlined that the key challenge that the world is facing now is associated with global competitiveness and highlighting of managerial competences.
Discussants shared their opinion on the impact of pandemic on the economy of Russia and the USA, the most effective methods to combat the pandemic and the expected changes.
As Georgy Idrisov, the Assistant to the Prime Minister of the Russian Federation underlined that morbidity is still declining in Russia not as fast as desired. However, the authorities managed to resist the pandemic efficiently. Major part of measures were taken based on the current evaluation of the situation and the forecasts, having proved the correct actions implemented by the Government.
Georgy Idrisov believes: “It is safe to say that Russia manages the pandemic better than many other countries do, which has been proved by low mortality and high level of targeted social support, as well as the economy and social sphere recovery rate”.
Alexey Kudrin, Chairman of the Accounts of Chamber, agreed that entirely, the anti-crisis policy is coping with its tasks. He said that one of the key challenges for Russian economy for the next 10-20 years is the dependence on the oil rent, and therefore, Russia must develop other, non-resource based economic sectors.
“The pandemic has also exacerbated the risk of nationalization of a number of Russian companies, especially those mostly affected by the pandemic, in particular, airlines and a number of others, which will find it difficult to survive without state support. By supporting such businesses, the state often gets into their capital. Meanwhile, the share of the public sector in the economy in the past 20 years has anyway grown to 46-48% of GDP. Hopefully, It would be nice to overcome this risk and promote the development of private sector. Thus, we need decisive measures in the coming years to support small and medium-sized businesses”, Alexey Kudrin stressed.
The Chairman of the Accounts of Chamber has also noted the Russia’s performance backlog demanding the digitalization of production in order to overcome it.
Alexey Kudrin assumes: “Digital economies and online commerce, have scored a big win, including in Russia, but this has not become a trend yet. Other risks persist: the backward quality of government regulation in a number of industries, insufficient spending on health and education”.
According to Jeffrey Sachs, Professor of Columbia University, American economy has also faced considerable decline, nonetheless, the USA managed the pandemic even worse than Russia.
Jeffrey Sachs highlighted: “Due to a poor government policy we failed to curb the pandemic. There are 15 000 new cases diagnosed daily in the USA. Around 1 000 people die every day, and on the whole, we have already lost about 160 000 people. The President wished the economy to develop and he underestimated COVID-19. He wanted to avoid businesses shutdown, lockdown and restrictions. Many measures were imposed on the level of individual states. As a result, we lack any national policy towards containing the epidemic.”
According to Jeffrey Sachs, the pandemic has exacerbated inequality in the country, as the rich demonstrated lower mortality rates than minorities.
Laurence Kotlikoff, Professor of the Boston University and Head of the Gaidar Institute International Department, agreed that the US economy is close to collapse. According to him, “there is a high probability of bankruptcy for the fifth part of companies in the United States. In particular, a large wave of bankruptcies is expected in retail trade, tourism, among pension funds."
Laurence Kotlikoff underlined: “We observe a dramatic economic collapse. The economic decline can be much more severe than in 2008.”
Alexander Auzan, Dean of the MSU School of Economics, expressed his vision of the current crisis based on a historical retrospective, comparing it to the plague epidemic in the Middle Ages. He assessed the epidemic as a civilizational crisis, which can lead to global institutional shifts and a change in the trajectory of the world community development.
“There is a situation when 3 billion people all over the world were in the quarantine lockdown for two months, and this is an important experiment that is taking place in relation to values and ethical preferences,” Alexander Auzan believes.
Alexander Auzan claims that the very fact of forced isolation raised doubts about many things, namely, from scientific paradigms to the effectiveness of health systems and the values of democracy. Auzan believes that a balance is required between the transformation of digital assets into a driver of development and reasonable support for the most affected industries, primarily small and medium-sized businesses.
Vladimir Mau, Rector of RANEPA, moderated the discussion. In his welcome address, he underlined that the key challenge that the world is facing now is associated with global competitiveness and highlighting of managerial competences.
Discussants shared their opinion on the impact of pandemic on the economy of Russia and the USA, the most effective methods to combat the pandemic and the expected changes.
As Georgy Idrisov, the Assistant to the Prime Minister of the Russian Federation underlined that morbidity is still declining in Russia not as fast as desired. However, the authorities managed to resist the pandemic efficiently. Major part of measures were taken based on the current evaluation of the situation and the forecasts, having proved the correct actions implemented by the Government.
Georgy Idrisov believes: “It is safe to say that Russia manages the pandemic better than many other countries do, which has been proved by low mortality and high level of targeted social support, as well as the economy and social sphere recovery rate”.
Alexey Kudrin, Chairman of the Accounts of Chamber, agreed that entirely, the anti-crisis policy is coping with its tasks. He said that one of the key challenges for Russian economy for the next 10-20 years is the dependence on the oil rent, and therefore, Russia must develop other, non-resource based economic sectors.
“The pandemic has also exacerbated the risk of nationalization of a number of Russian companies, especially those mostly affected by the pandemic, in particular, airlines and a number of others, which will find it difficult to survive without state support. By supporting such businesses, the state often gets into their capital. Meanwhile, the share of the public sector in the economy in the past 20 years has anyway grown to 46-48% of GDP. Hopefully, It would be nice to overcome this risk and promote the development of private sector. Thus, we need decisive measures in the coming years to support small and medium-sized businesses”, Alexey Kudrin stressed.
The Chairman of the Accounts of Chamber has also noted the Russia’s performance backlog demanding the digitalization of production in order to overcome it.
Alexey Kudrin assumes: “Digital economies and online commerce, have scored a big win, including in Russia, but this has not become a trend yet. Other risks persist: the backward quality of government regulation in a number of industries, insufficient spending on health and education”.
According to Jeffrey Sachs, Professor of Columbia University, American economy has also faced considerable decline, nonetheless, the USA managed the pandemic even worse than Russia.
Jeffrey Sachs highlighted: “Due to a poor government policy we failed to curb the pandemic. There are 15 000 new cases diagnosed daily in the USA. Around 1 000 people die every day, and on the whole, we have already lost about 160 000 people. The President wished the economy to develop and he underestimated COVID-19. He wanted to avoid businesses shutdown, lockdown and restrictions. Many measures were imposed on the level of individual states. As a result, we lack any national policy towards containing the epidemic.”
According to Jeffrey Sachs, the pandemic has exacerbated inequality in the country, as the rich demonstrated lower mortality rates than minorities.
Laurence Kotlikoff, Professor of the Boston University and Head of the Gaidar Institute International Department, agreed that the US economy is close to collapse. According to him, “there is a high probability of bankruptcy for the fifth part of companies in the United States. In particular, a large wave of bankruptcies is expected in retail trade, tourism, among pension funds."
Laurence Kotlikoff underlined: “We observe a dramatic economic collapse. The economic decline can be much more severe than in 2008.”
Alexander Auzan, Dean of the MSU School of Economics, expressed his vision of the current crisis based on a historical retrospective, comparing it to the plague epidemic in the Middle Ages. He assessed the epidemic as a civilizational crisis, which can lead to global institutional shifts and a change in the trajectory of the world community development.
“There is a situation when 3 billion people all over the world were in the quarantine lockdown for two months, and this is an important experiment that is taking place in relation to values and ethical preferences,” Alexander Auzan believes.
Alexander Auzan claims that the very fact of forced isolation raised doubts about many things, namely, from scientific paradigms to the effectiveness of health systems and the values of democracy. Auzan believes that a balance is required between the transformation of digital assets into a driver of development and reasonable support for the most affected industries, primarily small and medium-sized businesses.