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Will Russia offer anything new during G20 presidency?
Wednesday, 05 December 2012 21:07

Russia has become the presiding state of the Group of Twenty (G20) during a crucial period of development of the world in terms of both geopolitics and economics. The globalized world redistributes spheres of influence and offers several strategies to overcome the crisis. Will Russia be able to offer a new one?

Russia inherited the presidency in the largest forum of the world on Dec. 1 from Mexico. Russian President Vladimir Putin outlined the main tasks: the development of measures to encourage economic growth and job creation, promotion of investment, trust and transparency in the markets and effective regulation. "And of course, we are going to effectively use our presidency to address long-term national goals, to strengthen Russia's position in the management of the global economy", Putin wrote on the G20 website.

From these statements, one may distinguish three directions of work: Russia's geopolitical strengthening, solving national interests in relation to the world ones and the development of new ideas for overcoming the economic crisis and the development of the real sector of the world economy.

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As for the first issue, in terms of the geopolitical potential (the territory, international reserves, political influence, a permanent seat in the UN Security Council) Russia is ranked third or fourth in the world, and the world will have to pay attention to the country. It is clear that Russia needs to build a block with someone and it is clear with whom - the BRICS countries . Efforts are being taken already. In mid-November, Russian Finance Minister Anton Siluanov said the BRICS countries had developed a method of mutual support in case of the crisis in one of the countries with the use of swap mechanisms - it goes about the exchange of the currency of one country's for the currency of other countries. Furthermore, BRICS have launched the reform of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development in the direction of increasing their quotas. "The GDP index for the distribution of quotas should be decisive," said Siluanov.

A separate topic that Russia does not intend to forget is the promotion of economic growth in post-Soviet space. Two meetings are scheduled for December, at with CIS member countries intend to discuss their positions to subsequently delegate their promotion in the G20.

As for long-term national goals, Russia, like any sovereign country, has its own interests in the world economic system. For example, it is the reduction of the dollar share in international settlement. Then, of course, it is the increase of the growth of the Russian economy, which is linked to the world economy and is therefore stagnating. There are two strategies that rescue the world economy today: savings (Germany) and pumping the economy with money (the USA). Will Russia be able to propose a scheme of transition from speculative financial market to he real economy? For the time being, there is nothing new. Russian financial figures follow in the footsteps of neoliberalism.

They see the main cause of all the ills in the lack of the control body over the global financial system, which creates a huge shadow turnover (banking). It approaches the turnover in the banking sector and accounts for 86 percent of global GDP. This sector includes companies that specialize in working with securities, investment money market operators, insurers and other financial institutions.

There are many proposals to turn the G20 into the real governing body. Sergei Ivanov, who is responsible for Russia's presidency and the head of the presidential administration, suggested considering the organization of a supervisory body for the G20. How can this be done, even if its member - the European Union - can not agree on this inside? The U.S. is the main culprit of the debt crisis. America takes any requests to look into its budget deficit and public debt as interference in internal affairs. Nevertheless, one should discuss this issue and ask those question to the U.S. Congress to find out, for example, its attitude to the devaluation of the national currency for saving the real economy and thus the balance of payments?

Siluanov intends to offer to countries with large public debts to approve special programs to reduce their indebtedness. "It is important for investors to see a list of clear steps that could lead to a reduction in debt from 100 to 80 percent of GDP," the finance minister said. However, Siluanov did not specify any of those possible measures.

Why don't we see any specific programs of transition to the real sector? Because the shadow financial market feeds politicians and national budgets. Who buys the bonds of Spain, Greece, Portugal, and others? The governments of the United States, France, China, Germany, Japan, etc. do. Who profits from inflating financial bubbles? Wall Street and the affiliated executive and legislative power of the USA do. It would be naive to believe that the powers-that-be will simply turn down these mechanism of receiving money. At least one can try and regulate this market. Some Russian economists believe that there is a need to create a  umber of supranational centers in contrast to the U.S. Federal Reserve.

Many global problems have not affected Russia much yet. There is no disastrous unemployment, no debt crisis, no significant banking and no energy crisis in Russia. However, after Gaidar's reforms, we ended up in the same boat with the West and we have to swim in the same direction. The crisis has showed that  it is impossible to exist independently in today's world - the global market involves everyone, and co-operation is required here.

First Vice President of the Center for Political Technologies, Aleksei Makarkin, doubt that Russia will be able to achieve any significant dividends from the presidency in the G20. The Group of Twenty is an amorphous mechanism, where the chairing state does not impose its agenda, but simply aligns the interests of the parties to the framework of existing agreements.

The G20 includes Russia, the EU, Argentina, Australia, Brazil, Britain, Germany, India, Indonesia, Italy, Canada, China, Mexico, Saudi Arabia, the USA, Turkey, France, South Africa, South Korea and Japan. They provide 90 percent of the world's GDP; the countries are home to 80 percent of the world's population.

Lyuba Lulko


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