III Plenary discussion “On the way to the New World Economic Order”

Published: March 31st, 2017

On theme of discussion:

The rapidly changing geopolitical situation in the world calls into question the existing economic, social and political models. Will the decline of globalization lead to the formation of new political and economic regional unions? How will the growing security problems and the migration crisis affect the development strategies of the countries of Europe and Asia? What will the world be like after Brexit, the implementation of D. Trump's policy, the settlement of the Syrian crisis? Where in the world will there be new growth points, including for the real economy? How to achieve balance of power and interests on the basis of respect and cooperation?

Robert Nigmatulin, Academician RAS, Director of the Institute of Oceanology, Russian Academy of Sciences

Daisuke Kotegawa, Executive Director representing Japan at the IMF (2007– 2010)
Alexander Nekipelov, RAS Academician, Director of the Moscow School of Economics of Moscow State University
Horst Telchik, Former advisor on foreign policy and security of ex-chancellor of Germany Helmut Kohl, chairman of the Munich Conferences on Security in 1999 – 2008
Vladimir Yakunin, Chairman of the Board of Trustees of the Research Institute “Dialogue of Civilizations”
Bakyt Torobayev, The deputy of the parliament of the 6th convocation of the Kyrgyz Republic, the leader of the parliamentary faction “Onuguu-Progress”
Helmut Scholz, Member of the European Parliament from the Left Party of Germany, member of the European Parliament’s International Trade Committee
Dmitry Strezhnev, Chairman of the Board of Directors of OJSC EuroChem MHC
Oleg Morozov, Member of the Federation Council Committee on Foreign Affairs

Brexit, the victory in the US elections for Donald Trump, the growing migration crisis, their impact on economic and political models, and the specific economic indicators necessary to overcome the stagnation of the Russian economy were discussed by the participants in the Third Plenary Discussion "On the way to the New World Economic Order." Moderator of the discussion, Academician of the Russian Academy of Sciences, Director of the Institute of Oceanology named after P.P. Shirshov Robert Nigmatulin noted that discontent with politics is now strong throughout the world.

Nigmatulin is perplexed, that We have 145 million people in the country, but only 1% of the richest people are now discussing the problems. But you will not even find a million people in our country who are satisfied with the economic order. Even in the US, pessimistic moods are strong. I really like Joseph Stiglitz's book The Great Separation. Inequality in society, or What do the remaining 99% of the population?". He singles out 1% of the richest people and everyone else. This is you and many others, including very wealthy people. How should we be? "-.

In his view, the problem of inequality is not only injustice. Anomalous inequality reduces the growth of the economy. The overwhelming majority of the population does not need economic growth, because they simply do not have purchasing opportunities. Robert Nigmatulin proposed the parameters of the new economic order.

"I think that the state budget should be about 50%, not 30% of GDP. The whole of Europe lives like this, in Scandinavia this indicator is even higher. Education expenses should be 20% of the budget, minimum wages should be at the cost of thousands of liters of gasoline, the average salary should be two thousand liters of gasoline," thinks the academician. The moderator noted that the tax on super profits should be introduced, it is necessary to reduce taxes on business, fuel and raw materials. The new economic order should be balanced in the interests of most people.

Daisuke Kotegawa, Executive Director of the International Monetary Fund (IMF) from Japan in 2007-2010, presented his vision of the world economic system in the margins of the Moscow Economic Forum. He began his speech with an evaluation of the policy of Donald Trump. In his opinion, it is focused on the development of the financial sector, rather than production. Trump's political approach, according to the expert, will significantly change the economy: financial capitalism widens the gap between the rich and the poor. Executives are paid a large number of bonuses, but the financial sector does not produce anything. Often financial products, derivatives, create an even more difficult situation for producing sectors of the economy, it is often difficult to determine their real value.

"Unfortunately, speculators will never acknowledge their negative impact on the market. They only think about profits and continue to make the same mistakes," stressed Kotegawa..

The most important factor for the restoration of the Russian economy was the confidence of the speaker in the banking system. For example, Japan occupies one of the first places in the world in terms of the volume of deposits of the population. More deposits open up opportunities for business lending and the development of the real economy. In Russia, Kotegawa notes, the level of confidence in banks is not high enough, citizens are afraid that banks will again take money from the population. This significantly reduces the credit opportunities of the financial sector. The government, according to the expert, should also support medium and small enterprises, protect them from attacks by big business. The most important role in advancing not only the Russian but also the world economy should be played by the lifting of sanctions from Russia, so it is necessary to wait for their cancellation, concluded the former head of the IMF.

Oleg Morozov, a member of the Federation Council Committee on International Affairs, said that key political players had ceased to adhere to the old order of world relations. According to the speaker, the rules established after the Second World War are violated today by absolutely all actors of the political field. The former relations collapsed with the collapse of the Soviet Union, when the victor emerged in the Cold War. Which, and it was obvious, took advantage of the situation, turning the world to equipping under the concept of a unipolar model of management.

As the military conflicts grew, Oleg Morozov said, the concept began to change. The culmination point in this process was the Syrian conflict. "Today, two powerful powers are involved in it, and this is no longer a unipolar model of governing the world," explained the expert.

In the opinion of the speaker of the Federation Council, it is possible to restore the balance in the relations of the major political players following the following principles and actions: to recognize that the rules established after the Second World War do not work, nullify mutual claims, form a new order that would suit absolutely all parties.

Academician of the Russian Academy of Sciences, director of the Moscow School of Economics of Moscow State University Alexander Nekipelov stated in his speech the crisis of the current model of globalization. The latter, according to the speaker, was understood not only as a process of combining flows of goods and services, but also as the process of forming a homogeneous economic environment throughout the world. Today this approach does not justify itself.

Nekipelov cited the example of the United States: today the country sets itself the task of returning the real sector of the economy, which has long occupied no more than 20% there. A highly developed sphere of services, primarily financial, previously brought the United States and other states huge money, and nobody worried about the real sector. However, to date, the financial sector has discredited itself, it does not cope with the tasks assigned to it. From action on the grounds of universal interests, it is necessary to move to assess the interests of professional, national and other groups, Nekipelov is sure. Thus, the decision-making mechanism itself has changed, a climate of uncertainty has been created.

"We have entered a long period when we will have to work out new rules for the economic game in the global economic sphere. This process is inevitable, since it has deeper foundations than simply changing the political situation in specific countries," stressed the economist.

The place of Russia in the world division of labor was determined by Dmitry Stepanovich Strezhnev, General Director of EuroChem OJSC. "If our country has the same dynamics of the economy that it has in the last 5 years, then the country will lose its place in the economic pie," the expert believes.

According to Strezhnev, in order to make the economy of our country grow, certain changes and a political shift are necessary, healthy, competitive economic growth must be formed. First of all, Strezhnev noted dependence on foreign creditors. To solve this problem, it is necessary to create a national financial system with normal assets and liabilities. In addition, one must have a more or less predictable course, the country should be competitive.

The speaker also stressed that without national money the country will be dependent on international markets, and cited Japan and Germany as an example, the countries that began to grow from the creation of a national monetary system. Another important aspect, according to the speaker, is the formation of demand.

"We are doomed to independent politics, doomed to conflicts, we cannot name a country with which we have good relations," notes the expert. Creating a positive business environment for Russian business, external demand is a priority for development, convinced Strezhnev. Creation of a stable tax system, conditions for Russian capital, maintenance of competition in the capital market, organization of a fair system of courts and police, in the speaker's opinion, should underlie the economic development of the state. "He who works, eats. Only work will lead us to a normal history, "concluded Strezhnev.

In his report, Bakyt Ergeshevich Torobaev, a deputy of the sixth convocation of the parliament of Kyrgyzstan, leader of the parliamentary faction Onuguu-Progress, spoke about the trade and economic situation in the Central Asian region, integration of Kyrgyzstan in the Unified Energy System, and prospects for expanding the market of the EAPC countries within the framework of cooperation with the SCO.

For Kyrgyzstan, as a country that has passed the post-industrial period and is currently experiencing economic crisis, it is very important not to stay out of the integration processes, believes the expert. Torobayev stressed the importance of Kyrgyzstan joining the EAEC. It is possible to create conditions for production in the country, believes the expert.

According to the speaker, the EAEC should cooperate with the SCO, because economic activity is now shifting towards Asia, China and India. Torobayev noted that the concept of the new economic order today meets not only the interests of Kyrgyzstan, but all the countries of Central Asia. In the context of the creation of the common market of the EAEC, the new rules will contribute to the further development and improvement of the terms of trade, the possibility of increasing the export potential for local producers, and eliminating existing obstacles in the transport of goods. For Kyrgyzstan, the issue of access to modern technologies is topical, so the first thing that needs to be done quickly is to bring all technical regulations and standards in line.

Helmut Scholz, member of the European Parliament from the Left Party of Germany and member of the European Parliament's International Trade Committee supported his colleagues, saying that new rules for regulating economic relations in the world are needed. One of the key points in the creation of a new world order of politicians is the establishment of interaction between economic actors, which will ensure the conformity of production goals with the goals of society.

As a supporter of the postwar values ​​of self-determination, equality and peaceful standards of coexistence of states, Scholz is confident in the possibility of an economic balance that takes into account differences in the level of development of countries. At the same time, the sustainable development strategy proposed by the UN, by some countries is supported only in words, since the real instruments of influence on the economy are in the hands of other organizations such as the WTO and the EU. The speaker called for assessing technological development in terms of its impact on society and production.

The deputy is sure that only concerted actions will lead to the development of the international economy, including with an amendment to environmental issues that can not be ignored. Of course, the issue of decision-making should take into account the opinion of citizens - this, in the opinion of Scholz, is called the democratization of the international economy.

Vladimir Yakunin, chairman of the Board of Trustees of the Research Institute "Dialogue of Civilizations", called the current model of the world system unsustainable. "The coming crisis of the current model is inevitable, it is very unstable," Vladimir Yakunin said. The speaker noted the pain points, which it is already impossible to ignore.

New models of the world order, first of all, will focus not on changing statistical indicators, such as GDP or the level of public debt, but on the development and correlation of economic measures with all spheres of human life and its needs. According to Yakunin, a person will mean not a narrow group of beneficiaries, but a society in a broad sense, at least the most politically and economically active part of it. In international relations, the tendency will be to build relations based on equality and solidarity development, taking into account national and cultural characteristics.