The IXth annual Valdai Club Summit, held from October 21st until October 25th in St Petersburg and Moscow, was attended by EURUS Professor Piotr Dutkiewicz. The theme of this year’s Valdai Meeting was the Russian economy and its future. The argument put forth by Russian colleagues, in a report prepared prior to the Valdai meeting, and debated by the leading Russian and foreign experts was Russia’s future economic development and its dependency on the availability of oil export revenues and institutional development. Out of this report, four scenarios were proposed and debated amongst experts attending the Valdai meeting, however all scenarios boiled down to two types of factors. One group of factors involves the nation’s domestic resources, which many of experts in the Valdai meetings agreed that Russia has great resources, both human and natural. But many experts noted that these resources are not being fully utilized. Thus, the second group of factors involved the conditions and rules that allow these resources to be used effectively. Within this group, the possible options for Russia’s economic growth discussed were built on mobilising domestic resources, mainly by increasing governance efficiency, helping small- and medium-sized enterprises and involving the creative class.
In general, the scenarios presented at the meeting ranged from worst case to best case scenario. The best case scenario for Russia is oil prices remain high and successful reforms are undertaken, which would allow it to outpace global economic growth. However, a large concern amongst the Valdai participants was the lack of institutions in Russia, which, according to one expert, goes deeper than developing them to include the issues stemming from corruption, political instability and independence of the Russian courts.
Piotr Dutkiewicz, one of three panelists allowed to ask Russian President Vladimir Putin longer questions on the final day of the meeting, formulated his questions around the improvement of the institutional setup in Russia, securing better property rights for small- and medium-sized enterprises as well as the issue of management, particularly at the local level. Based on the week’s discussion with various experts, Professor Dutkiewicz drew the conclusion that Russia’s future depends on how well the nation’s domestic resources are utilized. More specifically, there are three issues that need to be addressed. First, the quality of governance at all levels from the top all the way down to the local level need to be addressed. Second, true partnerships with the creative classes need to be built, not to mention with the local businesses. Lastly, stable conditions for increased domestic and foreign capital need to be guaranteed.
In a recent interview with Professor Dutkiewicz, his sense was that Russian President Vladimir Putin remains confident about Russia’s future economic development. In response to Professor Dutkiewicz’s questions, President Putin stressed any changes to the rules and conditions within Russia would be incremental. According to President Putin, strengthening the Russian courts and securing property rights is relatively easy when compared to the task of tackling corruption. For this reason, the mantra of the Russian officials, during the Valdai meeting, was the issue of corruption would be a long-term and difficult endeavour. However, one of the Valdai participants indicated, President Putin’s ability to address the issue of institutional development would be secondary to holding together different sections of the Russian population and maintaining social stability. The reason for this, according to Professor Dutkiewicz, was President Putin’s nervousness about the growing opposition movement in Russia. Professor Dutkiewicz, in his interview following the Valdai meeting, indicated President Putin aimed to alleviate some of this pressure by creating new political parties, which would no longer make these groups anti-systemic.
Unfortunately, President Putin’s nervousness about the growing opposition movement in Russia lead some experts to wonder whether the political will to change the system was there. Moreover, others, focusing on the Russian political infrastructure, expressed their fear that stagnation at the highest levels of executive power would potentially effect President Putin’s political resolve to bring about the much needed reforms. The stagnation within the executive experts were referring to was President Putin’s relations with Prime Minister Dmitry Medvedev. At the final meeting of the Valdai summit, Professor Dutkiewicz and other experts got the sense that both the President and Prime Minister were working together, which put to rest the idea of stagnation at the executive level. Through a closer analysis of President Putin’s responses to the Valdai experts questions, he seems optimistic about Russia’s future economic development and that the necessary reforms will be incrementally put in place. According to Professor Dutkiewicz, if there is political will to change than the effects will be noticeable, however the most important thing is gaining the momentum to bring about change. Only time will tell which direction President Putin will take Russia’s economic development.
For more on the IXth Annual Summit of the Valdai Discussion Club, please visit the Valdai International Discussion Club website.