Freedom from the State

Participants of the St. Petersburg Economic Forum identified the main obstacle to the country's development

By the end of this year, Russia should rise one more step and become the sixth largest economy in the world. This forecast was given by First Deputy Prime Minister Igor Shuvalov at the St. Petersburg Economic Forum . “SWOT analysis of the Russian economy - global challenges and opportunities until 2020” - this was the theme of the second, “Russian” day of the forum. Almost all forum participants tried to answer questions about the strengths and weaknesses, opportunities and threats of the Russian economy, which is what the abbreviation SWOT stands for. And time after time they came to the conclusion that the most useful thing for the country’s economy would be to reduce government intervention in it .

“Historically, strategic thought in Russia is based on two well-known postulate questions: who is to blame and what to do. Usually you and I get stuck on the first question. But I think that for the first time we began to look very carefully at long-term problems, and, in fact, we have a bunch of other two questions: what to do and how to do it. I think this shows the seriousness of our intentions,” said Minister of Economic Development Elvira Nabiullina.

“In an innovative society , an excess of state is as dangerous as its deficiency,” said Mr. Shuvalov. It was he who, in the absence of Prime Minister Vladimir Putin, who never appeared at the St. Petersburg Forum, had the right to tell on behalf of the Russian authorities how they intend to develop the country’s economy and support investments. He named five main problems standing in the way of Russia's development. “The first problem is that we suffer from the psychology of catching up. The second is an energy trap. The third is lagging skills. The fourth is an unhealthy lifestyle and the fifth is the state’s desire to increase its influence and the desire of many to force the state to influence,” noted the first Deputy Prime Minister

All the participants in the discussion without exception spoke about the excessive activity of the state. Freedom from such government activity looked like a new slogan, like doubling GDP by 2010 used to be.

“Many criticize the authorities for their desire to penetrate into all spheres. On the one hand, there is a desire of the bureaucracy to interfere more and more in economic activities. On the other hand, there is a strong desire to induce the state to take such actions,” Mr. Shuvalov said. Presidential aide Arkady Dvorkovich also agreed with him. "There is not enough economic freedom in Russia. The state is still trying to influence where it is no longer needed," he said.

First of all, the state must moderate its appetite for regulating the activities of state-owned companies . According to Mr. Shuvalov, failures of state regulation turn out to be much more painful than market failures, since the state is slower to respond to the challenges of the current situation. The state will minimize the participation of officials on the boards of directors of state-owned companies, replacing them with professionals, he said. True, this does not cancel the creation of new state corporations. “We believe that they are needed precisely for regulation where market agents cannot act independently. We created them and, probably, in some areas we will create them, but we will create them in such a way that they work absolutely openly, according to the rules of corporate governance,” explained Mr. Shuvalov.

The freed up space in the economy will have to be taken up by new investment projects. Evidence of how promising it is to invest in Russia was presented in abundance at the forum.

Even the president found time to meet with foreign investors. “There is a trillion dollars in this room,” President of the World Economic Forum Klaus Schwab introduced Dmitry Medvedev to those gathered for the meeting. “Our meeting today is not just a tribute to an established tradition. Life itself has shown that only such direct dialogue can change the situation for the better,” Mr. Medvedev began his speech.

He told businessmen about “five important things” that, from his point of view, they would be interested to know. Firstly, the Russian authorities intend to transfer the economy to a new technological level. And therefore they are interested in investing in a variety of sectors of the economy. “So far, the share of foreign direct investment in GDP is about 5%, and it is mainly concentrated in retail, construction and raw materials industries,” the president said. In order to change the situation and provide clear guidelines to investors, a law was adopted to restrict the access of foreigners to strategic sectors of the economy. “This law is very similar to the American one, but I specifically compared the texts - our law is simpler,” Mr. Medvedev did not fail to note. He also said that the possibility of introducing tax benefits for companies involved in the education and treatment of their employees is currently being explored. And finally, the Russian authorities have set themselves the task of creating a “absolutely independent court.” “The investment climate, and as a lawyer I understand this very well, is measured not only by laws, but also by the level of enforcement,” Mr. Medvedev encouraged investors.

The next day, Igor Shuvalov also held a meeting with foreign investors, but what he promised them in exchange for investment remained unknown.

Russian business, meanwhile, has prepared its own proposals. By analogy with the 2020 strategy, the president of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, called business ideas “2012” - 12 points that must be completed by 2012. In particular, adopt an anti-raider package of laws and consolidate exchange platforms. Predictably, among these measures there was a decrease in government appetite. “One of the problems of business is the excessive presence of the state in the economy. It is good that this topic has become the leitmotif of this forum,” Mr. Shokhin summed up the two-day discussion.

Vera SITNINA, St. Petersburg