Conference and Seminar on "Investment Climate and Russia's Economic Strategy" Moscow, April 5–7, 2000
April 5-7, 2000
A three day conference/seminar on the "Investment Climate and Russia's Economic Strategy" was held in Moscow on April 5–7, 2000. The event was organized by the State University Higher School of Economics with the support of the World Bank and the IMF. Participants included representatives from government, the Duma, business, and academia, as well as from the international financial institutions (IFIs), including the EBRD and OECD, and foreign experts.
The event was divided into three sections. The first day featured a conference with wide participation of mainly technical experts. It was based on a large number of papers prepared by Russian experts and the IFIs covering a range of macroeconomic and structural issues, and divided into the following four working groups (running in parallel): (i) macroeconomic conditions for economic growth; (ii) institutional and structural limitations to economic growth; (iii) social policy and economic development; and (iv) state regulation of the economy--freedom and the rule of law. The second day featured a plenary session with addresses by Mr. Kudrin (First Deputy Minister of Finance), the chairmen of the four conference working groups (Messrs. Gavrilenkov, Shokhin, Yakobson, and Kuzminov) and Mr. Yasin (all HSE), Mr. Fischer (Acting Managing Director of the IMF), and Mr. Linn (Vice President for Europe and Central Asia at the World Bank). Several hundred people attended the plenary session, which was also open to the press. The third day featured a high level seminar with participation of business leaders and policy makers, in the format of a roundtable discussion of the main issues covered in the conference.
The agendas for the conference and seminar are shown below, along with the list of participants in the seminar. There is a link to Mr. Fischer's speech that was presented at the plenary session.
There was a high degree of consensus regarding the key macroeconomic and structural problems faced by the Russian economy as well as the priority areas of reform and direction of main policy steps. All agreed that there was no alternative to proceeding with the establishment of a market economy based on private initiative and entrepreneurship. The key challenge now was to improve the investment climate. This required preserving macroeconomic stability and broadening and accelerating structural reforms. The government needed to be streamlined through tax and expenditure reforms while providing greater clarity in relations between the different levels of government. In general, there should be increased deregulation of economic activities in tandem with a strengthening of the rule of law and weeding out of corruption. The process of bank and enterprise restructuring had to be speeded up through promoting competition and corporate governance and firming the procedures for exit of unviable businesses, including through bankruptcy. The restructuring process needed to be supported by a strengthening of the social safety net. These reforms should go a long way toward eliminating the problem of nonpayments in the economy. However, their success would depend intimately on the ability to foster broad based support and stand up to vested interests.
Convenors: O. V. Viugin, S. A. Alexashenko, Ye. Ye. Gavrilenkov Academic Secretary—B. E. Brodsky
| 10.00–12.00
|
(Chairman: Ye. T. Gaidar) | |
| Medium-term macroeconomic outlook Speaker: T. Laursen | ||
| Russia's economy: alternatives of development and
prospects of growth Speaker: A. R. Belousov | ||
| Russia's economic strategy (key theses) Speaker: Ye. Ye. Gavrilenkov | ||
| 12.00–12.15 | Coffee Break | |
| 12.15–14.00 |
(Chairman: I. S. Materov) | |
| Macroeconomic limitations for budget reforms in the short-term and
long-term perspective Speaker: A. V. Dvorkovich | ||
| Issues in public expenditure policy Speakers: A. Morozov, M. Sandberg | ||
| Budget policy and economic growth Speaker: A. N. Illarionov | ||
| Tax policy and administration for Russia Speaker: J. Davis | ||
| 14.00–15.00 | Lunch | |
| 15.00–17.00 | (Chairman: W. Schrettl) | |
| Factors and limitations of Russian economy growth in
the post-crisis period Speakers: G. O. Kuranov, I. S. Materov | ||
| Banking system restructuring in Russia Speakers: D. S. Hoelscher, W. Alexander, M. Fuchs | ||
| The model of debt and sovereignty path: the Russian
default of 1998 Speaker: A. D. Smirnov | ||
| 17.00–17.15 | Coffee Break | |
| 17.15–19.00 | (Chairman: S. V. Aleksashenko) | |
| Investment programs Speaker: V. V. Kossov | ||
| Capital flight from Russia Speaker: P. Loungani | ||
| Structural factors of investment growth Speaker: B. E. Brodsky | ||
| 19.00 | Summing up | |
Convenors: A. N. Shokhin, V. V. Radayev, A. A. Yakovlev Academic Secretary T. V. Pustovalova | ||
| 10.00–12.00 | (Chairman: A. N. Shokhin) | |
| Overview of structural reforms in Russia after 1998 financial crisis Speaker: S. A. Vasiliev | ||
| Structural and institutional constraints on economic growth Speaker: A. A. Yakovlev | ||
| Competition and entry in Russian industry Speaker: H. Broadman | ||
| Restructuring of RAO UES Speaker: V. Yu. Sinyugin | ||
| Enterprise Restructuring Speakers: I. Goldberg, A. Watkins | ||
| Foreign economic relations as an important factor of
economic growth Speaker: A. V. Kuznetsov | ||
| Proposals on the agro-industrial sector development concept Speaker: E. V. Serova | ||
| 12.00–12.15 | Coffee Break | |
| 12.15–14.00 | (Chairman: A. N. Shokhin) | |
| Corporate governance in Russia: is there any chance of
improvement? Speaker: D. V. Vasilyev | ||
| Corporate governance and the Russian enterprises'
performance Speaker: P. V. Kuznetsov | ||
| Forming corporate control models in the Russian
industry (from surveys of enterprises) Speaker: T. G. Dolgopyatova | ||
| Corporate governance problems in the
telecommunications industry Speaker: D. B. Zimin | ||
| The role of law in transaction strategies of Russian
enterprises Speaker: K. Hendley | ||
| 14.00–15.00 | Lunch | |
| 15.00–17.00 | (Chairman: V. V. Radayev) | |
| Institutional traps: is there a way out? Speaker: V. M. Polterovich | ||
| Financial situation of Russian enterprises Speaker: P. A. Karpov | ||
| De-monetization of the Russian economy Speaker: J. Litwak | ||
| Barter and arrears in Russia: Principles of a solution strategy Speaker: C. Mumssen | ||
| From the economy of non-payments to a cash
economy Speaker: A. N. Klepach | ||
| Prospects for direct investment to Russian economy
(example of Italian producers of durables) Speaker: C. Boffito | ||
| 17.00–17.15 | Coffee Break | |
| 17.15–19.00 | (Chairman: A. A. Yakovlev) | |
| Major vectors of institutional transformations in Russian economy Speaker: V. V. Radyev | ||
| How rational a small businessman's behavior
is Speaker: A. Yu.Chepurenko | ||
| Promoting competition and entrepreneurship Speaker: S. Fries | ||
| Russian enterprises: some aspects of assessing
investment attractiveness Speaker: I. V. Lipsits | ||
| Institutional limitations of Russian enterprises' investment behavior Speaker: Yu. Danilov | ||
| Overriding institutional limitations while realizing
investment potential of high-technology firms Speaker: I. B. Gurkov | ||
| 19.00 | Summing up | |
Convenors: L. I. Yakobson, Ye. Sh. Gontmakher Academic Secretary—S. N. Smirnov | ||
| 10.00–12.00 | (Chairman: L. I. Yakobson) | |
| Principles and main elements of social strategy Speakers: E.Sh. Gontmakher & V. V. Trubin | ||
| Functions of the social policy in economic growth
mechanisms in the present-day Russia Speaker: K. I. Mikulsky | ||
| Social orientation of economic mechanisms Speaker: L. S. Rzhanitsyna | ||
| Strengthening of the role of the state in ensuring
social progress Speaker: I. A. Ilyin | ||
| Social reforms in transition economies: first steps and
their lessons Speaker: L. S. Degtyar | ||
| Social orientation of economic mechanisms Speaker: L. A. Gordon | ||
| Social dynamics, social capital and economic
development Speaker: I. Ye. Diskin | ||
| Social factors of economic growth Speaker: V. V. Kulikov | ||
| Social factors favorable for capital willing to work in
Russia Speaker: B. V. Rakitsky | ||
| The Russian society's moral climate as economic
development environment Speaker: O. L. Shakhnazarov | ||
| Social policy in a federative state Speaker: S. N. Smirnov | ||
| 12.00–12.15 | Coffee Break | |
| 12.15–14.00 | (Chairman: Ye. Sh. Gontmakher) | |
| Re-production of workforce and social
policy Speaker: D. F. Shavishvili | ||
| Integration of employment in the system of
macroeconomic factors of economic growth Speaker: L. S. Chizhova | ||
| On controversies between the policy of employment
and the macro economic stabilization policy Speaker: A. V. Kashepov | ||
| Assessment of investment costs for creating direct
and related jobs Speaker: A. S. Semenov | ||
| Job separation as an efficient government policy
measure in the lab market Speaker: M. G. Kolosnitsyna | ||
| Social partnership and the development of the
economy Speaker: V. K. Kashin | ||
| Tasks of optimizing the government personnel
policy Speaker: L. S. Ruban | ||
| Russian labor values in the context of international
comparisons Speaker: V. S. Magun | ||
| 14.00–15.00 | Lunch | |
| 15.00–17.00 | (Chairman: L. I. Yakobson) | |
| Reports by representatives of P&G ("Start" Labor Fund and restructuring of AK "Novomoskovskbytkhim" [1997-1999]), Norilsk Nickel (On social implications of the coal sector restructuring). | ||
| 17.00–17.15 | Coffee Break | |
| 17.15–18.00 | (Chairman: L. I. Yakobson) | |
| Russia: Note on social protection Speaker: H. Sederlof | ||
| Living standards: conceptual and parametric
approaches Speaker: V. M. Zherebin | ||
| Regional specifics of differentiation of population by
current cash revenues Speaker: V. N. Bobkov | ||
| Problems of overcoming poverty in the
country Speaker: V. G. Zinin | ||
| From the new poor to the middle class: a strategy of
transition Speaker: L. N. Ovcharova | ||
| Problems of optimizing the price policy and
household incomes Speaker: S. V. Pronin | ||
| Capitalization of insurance contributions (premiums)
in mandatory and voluntary social insurance systems in Russia: possibilities and
prospects Speaker: G. P. Degtyarev | ||
| 18.00–19.00 | (Chairman: L. I. Yakobson) | |
| Housing policy as an economic development
factor Speaker: N. B. Kosareva | ||
| Single-industry cities: socio-economic problems and
solutions Speaker: V. Ya. Lyubovny | ||
| Strategy of reforming health services Speaker: S. V. Shishkin | ||
| Investment situation in Russia's tourist
industry Speaker: P. M. Shulgin | ||
| Education as an instrument of the social and
economic development Speaker: T. L. Klyachko | ||
| 19.00 | Summing up | |
Convenors: Ya. I. Kuzminov, M. P. Afanasiev, Yu. A. Tikhomirov Academic Secretary—N. V. Rostovtseva | ||
| 10.00–12.00 | (Chairman: Yu. A. Tikhomirov) | |
| Modernization of the state Speaker: Ya. I. Kuzminov | ||
| On the system of legal support of the economy Speaker:Yu.A. Tikhomirov | ||
| The sphere of state regulation and control Speaker: E. N. Renov | ||
| Development of legislation in the management of economy field Speaker: I. L. Bachilo | ||
| Legal means and boundaries of the state regulation of
the economy Speaker: O. M. Oleynik | ||
| Defects of the market: normative regulation Speaker: Ye. A. Kulkov | ||
| State influence on economic relations in Russia Speaker: V. D. Mazayev | ||
| 12.00–12.15 | Coffee Break | |
| 12.15–14.00 | Speaker: Ya. I. Kuzminov | |
| Anti-corruption priorities in Russia Speaker: S. V. Stepashin | ||
| Corruption in Russia Speaker: J. Roaf | ||
| Anti-corruption policy in Russia Speaker: G. A. Satarov | ||
| Does corruption eliminate failures of the
state? Speaker: M. I. Levin | ||
| Principles of building government service Speaker: A. G. Barabashev | ||
| Corruption in Russia and problems of criminal law
resistance to it Speaker: K. F. Shergina | ||
| Russia: Public administration reform: Issues and Options Speaker: Neil Parison | ||
| 14.00–15.00 | Lunch | |
| 15.00–17.00 | (Chairman: Ye. A. Kulkov) | |
| Judiciary protection of businessmen Speaker: O. V. Boikov | ||
| Contractual disputes: ways of their
settlement Speaker: A. A. Auzan | ||
| Prospects of the administrative law
development Speaker: A. V. Fedosenko | ||
| 17.00–17.15 | Coffee Break | |
| 17.15–19.00 | (Chairman: Ya. I. Kuzminov) | |
| Economic and social reforms: controversies at the
regional level Speakers: V. N. Leskin, A. N. Shetsov | ||
| Fiscal decentralization in Russia: Economic performance and reform
issues Speaker: E. Dabla-Norris | ||
| Intergovernmental fiscal controversies Speaker: Ye. S. Sapiro | ||
| Budget federalism Speaker: D. Sutherland | ||
| Fiscal federalism in the Russian Federation: Problems and reform
options Speaker: A. M. Lavrov | ||
| Decentralization of power and economic growth in
Russia: What should a "strong center" be like? Speaker: L. I. Polischuk | ||
| Federalism dejure, regionalism de facto Speaker: A. V. Butakov | ||
| 19.00 | Summing up | |
| Thursday, April
6 | ||
| 13.00–14.00 | Registration of participants | |
| 14.00–14.15 | Welcoming remarks of Ya. Kuzminov | |
| 14.15–14.30 | Representative of the Russian Federation Government A, Kudrin (State University—Higher School of Economics) | |
| 14.30–14.45 | Convenor of the section I Ye. Gavrilenkov (State University—Higher School of Economics) | |
| 14.45–15.00 | Convenor of the section II A. Shokhin (State University—Higher School of Economics) | |
| 15.00–15.15 | Convenor of the section III L. Yakobson (State University—Higher School of Economics) | |
| 15.15–15.30 | Convenor of the section IV Ya. Kuzminov (State University—Higher School of Economics) | |
| 15.30–16.00 | J. Linn (the World Bank) | |
| 16.00–16.15 | Coffee break | |
| 16.15–16.45 | I. Visco (Organization for Economic Cooperation and Development) | |
| 16.45–17.15 | S. Fischer (International Monetary Fund) | |
| 17.15–17.45 | Ye. Yasin (State University—Higher School of Economics) | |
| 18.00 | End of plenary session | |
| April 7, Seminar Program |
||
| 1. Should the thrust of reforms be continued, should the implementation of the designed measures be intensified, or should the course of reforms be reversed? How? The role of IFIs. | ||
| 2. Is it true that the main factor contributing to growth and higher efficiency is enterprises restructuring? How soon can direct and indirect subsidies be discontinued and fair and equitable competition be installed? How should economic deregulation be achieved? What is the role of regional authorities in streamlining competition? | ||
| 3. Barter and non-payments: underlying causes and impact on economic development. Is the inefficiency of the non-market sector the main factor supporting the barter-arrears economy? What measures should be taken to monetize the economy, inter alia, to address payments through off-shore zones and curb capital flight? | ||
| 11.45–12.00 | Coffee break | |
| 1. Banking system and financial markets. What should be the role of state and foreign banks in the Russian banking system? What is the future of Sberbank? What type of financial system is preferable for Russia? Does Russia need a national insurance system or would foreign insurance companies be sufficient once the insurance market is fully liberalized? | ||
| 2. What is the role of the government in economic modernization? What measures could facilitate anti-corruption efforts? What services could the government delegate to the private sector and on what terms? How important is the judicial reform and how to ensure the independence and accessibility of courts? Is there a need for vigorous industrial reform? Is there a need for a public service reform? | ||
| 3. How to reform natural monopolies in the short-term? | ||
| 13.45–15.00 | Lunch | |
| 1. General macroeconomic issues and prospects, the link between macroeconomic issues and structural reforms. Should a decline in growth be expected as a result of the drop in energy prices and the diminishing effects of devaluation? | ||
| 2. How important is the elimination of the inefficient non-market sector in the real economy? How quickly should it be eliminated, or would a spontaneous restructuring be more preferable? | ||
| 3. Public debt and capital flight. Could capital flight be curbed over a short period to repay debts, or should there be a comprehensive debt restructuring scheme implying a partial debt write-off to allow Russia to revive its economy and pay out its debts? | ||
| 4. Fiscal issues and tax reform. Tax burden and public expenditures. The concept of tax reform. | ||
| 16.45–17.00 | Coffee break | |
| 1. Labor reform. Is there a need to set statutory wages and working hours? How to cut employment and dismissal costs? | ||
| 2. Pension reform. Would it be expedient to immediately introduce a funded payment system? How to provide incentives for employers to create a voluntary pension insurance system? | ||
| 3. Social support of economic modernization and structural reforms. How to ensure cooperation between business and the government in the social support of restructuring? How to ensure targeted social safety and increase the share of the poor in social transfers? | ||
| 4. Housing and utilities reform. How to accelerate the pace of reforms? | ||
| 5. What is the role of international financial institutions in the social support of modernization? | ||
Author(s)
TitlePrakash Loungani and Paolo Mauro
Research Department, IMFCapital Flight from Russia Christian Mumssen
European II Department, IMFBarter and Arrears in Russia: Principles of a Solution Strategy Neil Parison , ECSPE, World BankRussia: Public Administration Reform: Issues and Options Alexander Morozov, ECSPE, World Bank
Mark W. Sundberg, SASPR, World BankRussia: Issues in Public Expenditure Policy John M. Litwack, OECD
Douglas Sutherland, OECDThe Demonetisation of the Russian Economy: Causes and Policy Options Aleksei Lavrov, Ministry of Finance,
Government of the Russian Federation
John M. Litwack, OECD
Douglas Sutherland, OECDFiscal Federalism in the Russian Federation: Problems and Reform Options Hjalte S. A. Sederlof, ESCHD
The World BankRussia: Note on Social Protection Stilpon Nestor and Ms. Fianna Jesover,
OECDOECD Principles of Corporate Governance on Shareholder Rights and Equitable Treatment: Their Relevance to the Russian Federation James Roaf, European II Department, IMFCorruption in Russia Mark Dutz, Steven Fries, Maria Vagliasindi
EBRDPromoting Competition and Entrepreneurship in Russia William E. Alexander and David S. Hoelscher,
Monetary and Exchange Affairs Department,
IMF
Michael Fuchs, ECSPF, World BankBanking System Restructuring in Russia Csaba Csaki, ECSSD, Vera A. Matusevich,
ECSSD,
John D. Nash, ECSSD
The World BankAgricultural Policy Issues for Russia Era Dabla-Norris and John Norregaard
Fiscal Affairs Department, IMF
Jorge Martinez-Vazquez
Georgia State UniversityFiscal Decentralization in Russia: Economic Performance and Reform Issues Thomas Laursen (coordinator) European II
Department IMFMedium-Term Macroeconomic Outlook Victoria Summers, Fiscal Affairs Department,
IMFTax Policy for Russia Richard Highfield and Katherine Baer
Fiscal Affairs Department, IMFTax Administration for Russia Itzhak Goldberg, ECSPF &
Alfred Watkins, ECSPF, The World BankEnterprise Restructuring Jack Diamond, Fiscal Affairs Department
IMFPublic Expenditure Management Harry G. Broadman—The World BankCompetition and Entry in Russian Industry
Title