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Medvedev shares how to make Russia world’s top economy

June 20, 2011, 10:40 UTC+3
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MOSCOW, June 19 (ITAR-TASS) - The 15th Petersburg International Economic Forum went on according to the customary scenario, but it radically differed from that of last year in topics and aims. While a year ago its participants tackled the existentialist question - "Is there any life after the crisis?" they were more interested this time in specific forms of development as well as rates of reforms' progress.

Besides, forum participants were also interested in the question of the 2012 presidential elections in Russia. Uncertainty in this question, forum participants admitted, introduces nuances in their action plans with Russia. Vice-premier Alexei Kudrin was even forced to admit that political risks and uncertainty concerning periods of reforms are one of reasons of capital outflow from Russia against the background of high oil prices.

According to his forecasts, reforms "will substantially accelerate after the elections". "They (reforms) will be materialized in any case, no matter who will be a president from our tandem or anybody else - this is explained by the fact that these are ripe questions, they will be resolved by people who will come to power," said the finance minister.

But Western participants in the forum were not satisfied with this reply. It is not by chance that the moderator of the final plenary meeting and editor-in-chief of The Wall Street Journal Robert Thomson could not refrain from a direct question to Dmitry Medvedev whether the president would announce his decision on Saturday.

But the president referred to an improper format of the meeting and suggested to "maintain the intrigue: "I shall tell my decision. Don't worry. I shall not avoid this happy lot. I cannot do it in such a way as to withhold my decision from the Russian people and all interested persons. The announcement will be made very soon."

Incidentally, according to general opinion, Medvedev launched a programme at the opening of the forum, clearly overstepping the limits of the last year of the presidential term, although he made a reservation that his modernization project "should be materialized, irrespective of who and what posts will take over the next few years".

The head of state's statement was evidently to the liking of Western forum participants that his choice is not on the way of state capitalism, but on the development of private enterprise and encouragement of private investments. At the same time, he insisted on rapid moves: "It's wrong to aim only at calm and measured growth; this is a mistake. Another stagnation may hide behind a notorious stability. Therefore, it is necessary to change everything quickly and resolutely what interferes with breakthrough development."

The president spoke of introducing market institutes and supporting those who "consciously risk their money and prestige". He suggested five priority steps in the process of the country's modernization: accelerated privatization of state property, decentralization of the centre's powers, higher quality of judiciary's work, struggle against corruption, Russia's integration in the world economy by establishing an International Financial Centre in Moscow and dumping of restrictions on floating of Russian securities abroad.

He also reported a decision to slash the tax load on business by lowering the maximum rate of mandatory insurance contributions in the next year from 34 percent to 30 percent and to 20 percent for small and medium businesses. Kudrin later explained that the decision is taken for the next two years and then it will be finalized over following years.

It's interesting that virtually nobody raised this topic this time apart from Medvedev who traditionally sharply spoke of stepping up struggle against corruption. Incidentally, US Ambassador to Russia John Beyrle complained of this fact, regretting that despite his request, this question was not put on the official forum agenda.

Russian forum participants spoke in an insisting way to the West concerning the WTO. Minister for Economic Development Elvira Nabiullina even warned that if no progress is reached on all the remaining questions by the end of July, "the process of accession may stretch for years".

The task of reaching a visa-free regime with the European Union and later with the US was dealt with in the same vein. Incidentally, Beyrle promised considerable progress in this question after an arrival in Moscow a high-powered delegation from Washington this year.

Of course foreign investors were interested in a programme of privatization in Russia. Their aspirations were satisfied to a considerable extent in this respect. Forum participants and reporters learnt about privatization plans as to the part of state stocks in such giants as Sberbank ("share of 25 percent plus one stock is enough to control all processes in the bank," bank chief Gref claimed), Alrosa (10 percent in 2012-2013 according to Kudrin), the titanium corporation VSPO-AVISMA (block in 2013-2014 according to forecasts of Rostekhnologii head Sergei Cherezov) and some others.

Nabiullina said to the joy of Russian and foreign investors that the state would not impose additional bans on floating the state block of shares abroad.

The discussion around Internet was a benchmark of time. The topic of the role of the World Web in the present-day world was also raised at other major international forums this year.

Medvedev who regretted that his G8 colleagues turned out to be more conservative on this question than he, suddenly joined the panel discussion in St. Petersburg, which was attended by Russian and foreign Internet gurus.

Internet's future is more than promising, and responsible politicians should understand this right away, incidentally, as well as those who are preoccupied with the economy. Medvedev gave precisely this signal to discussion participants."Internet has turned from a communication medium into a most powerful political factor. One, who ignores this, does not understand anything in present-day life," the president said.

The task of establishing an International Financial Centre in Moscow probably won the greatest response. Medvedevemphasized that "a Centre should be an inseparable part of the entire economic mechanism. Changes should be made not only in the financial sector, but also in related economic spheres".

Though first vice-premier Igor Shuvalov intimated that it would be necessary to fight other ambitious countries for the Centre, for instance, Kazakhstan which suggests Alma-Ata for this role, the president already firmly decided that the IMC will be in downtown Moscow (in place of departments to be withdrawn from Moscow's centre) or outside the Moscow Motor Circular Road.

Discussions of forum participants put into bold relief another president's idea: expansion of Moscow borders and creation of a Moscow Federal District.

Of course the forum also had purely numerical measurements. For instance the total length of discussions, sessions, roundtables and seminars topped 100 hours at the Lenexpo pavilions over the three days of work. This is apart from briefings, news conferences and signing of documents.

Forum participants signed dozens of agreements which include the long-awaited Russian-French contract on sale of two helicopter carriers Mistral for 1.2 billion euros. Another two will be built later. The United Shipbuilding Corporation received a 140-billion-rouble credit from Sberbank. The federal network company EEC signed a big contract with American Cisco on introduction of intellectual technologies in building networks.

The Skolkovo Fund and the Massachusetts Technology Institute will establish jointly the Skolkovo Institute of Science and Technology. The list of contracts is long.

According to Petersburg Mayor Valentina Matvienko, her city alone will receive 100 billion roubles in investments, while Nabiullina assessed the total sum of contracts, concluded at the forum, at 200 billion roubles.

The 2012 forum will be held already after the presidential elections.


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