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  • Moscow hosts Think 20 Meeting

Moscow hosted Think 20 Meeting

The Think 20 Meeting took place in Moscow on December 11 as part of Russia's G20 presidency. Representatives of leading global think tanks exchanged opinions on the most important issues on the global economic agenda.

Ksenia Yudaeva, Chief of the Presidential Experts’ Directorate and the Russian G20 Sherpa, focused her opening remarks on the important role that think tanks play in maintaining contacts between the expert community and government officials and supporting an ongoing exchange on how to make the work of the G20 more effective, as well as outlining the most important priorities for the current and future work of the group.

She also said that the focus of the meeting, Fostering Economic Growth and Sustainability, reflects the main goals that the G20 has been working to achieve from the very start: studying the main reasons behind the economic crisis and finding ways for initiating a recovery.

Some of the ideas proposed by the experts during the Think 20 Meeting will be included in the agenda for the December 12 G20 Sherpas' Meeting, Yudaeva said. She spoke about the plans and priorities of Russia's G20 presidency.

The G20 Finance Track will be based on the traditional G20 agenda during the year of Russia's presidency, Deputy Finance Minister Sergei Storchak said. It will continue focusing on issues raised over previous years. He also informed the audience that G20 finance ministers will meet in Moscow on February 15-16, 2013.

The main results of the Think 20 Meeting will be presented at the conference Fostering Economic Growth and Sustainability to be held in Moscow on December 13, 2012.

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Opening remarks by Ksenia Yudaeva, Chief of the Presidential Experts’ Directorate and the Russian G20 Sherpa:

Dear ladies and gentlemen, let me start. First of all, welcome everybody to Moscow! We are very happy to see you here in this wonderful city. And in this hotel where you can actually cite the famous children poem which starts with the phrase "And from our window you can see the Red Square". So from the windows of this hotel you really can see the Red Square. And I think it's the only place in Moscow where you can see the Red Square from your windows.

Well, I am Ksenia Yudaeva, Russian Sherpa. Some of you know me quite a while and you also know that I used to be the member, probably I still feel like I'm a member of Think Tank community. So when Mexico started its initiative of Think 20 last year, I thought that I definitely strongly support this idea, and I'm a strong believer in Think Tanks and in their ability to bring new ideas, creativities, new look in the official governmental process. And I really hope that our meeting today will bring the abovementioned new ideas on how to make the G20 more efficient, on how to approach the main problems which the world economy has already confronted and will confront in the future and which the G20 needs to address right now or in the future.

Let me introduce Co-chairs of this meeting. This is Vladimir Mau, he is absent for the moment but he will come up later. This is Andrés Rozental, my old friend. Andres is the President of his own consulting firm, Rozental & Asociados. And Mike Callaghan, from Lowy Institute. And this is the institute which makes a lot of contributions to the G20 agenda and Think 20 process. I would also like to welcome Sergei Guriev from the New Economic School and John Kirton, co-director and founder of the G20 Research Group of the University of Toronto, who will chair the sessions.

The main topic of our meeting today is Fostering Economic Growth and Sustainability, and we all know that the G20 was created exactly for these purposes, for purposes of fostering economic growth and sustainability. And major agenda for the G20 is:first, to stop crisis, when we have crisis, and second, to come up with efficient mechanism to support growth and to prevent crises in other times or during the times of the crisis as well.

The discussion today will be structured along three main sessions, which will provide contributions to three major areas of the G20 agenda. The first one is Reinvigorating Economic Growth: Macroeconomic Issues and Fiscal Sustainability. The second one is Trade and Foreign Direct Investments: Tools to Restore Growth and Pave the Path Towards Convergence. The third one is Enhancing Sustainable Development: Finding Enduring Sources for Shared Global Growth.

These areas, as I said, cover the G20 agenda, which always includes topics on economic growth, on trade and on development.

Well, today we have a meeting of Think 20, tomorrow Civil 20 and Business 20 will also meet to shape the agenda. And the idea of the Russian presidency is to use Outreach a lot as a source of new ideas and as a way of cooperating between government, business, think tanks, civil society and other communities.

And one innovation, which we introduce here this year, is as follows. Tomorrow during the sherpas' meeting chairs of today's sessions will present to sherpas some of the ideas which we will discuss today.

There used to be a great deal of criticism for the G20 in a sense that it organizes business events, civil society events, think tank events but those ideas are never used in the official agenda. So we would like to change this and we introduce a new approach, when your ideas will be reported to sherpas and for them to be utilized in their own discussion and in the G20 Leaders' agenda.

Now let me tell you just a few words about the three objectives of the Russian presidency. Well, I think most of you already know, we decided not to introduce any new items to the agenda and rather concentrate on the traditional agenda, boosting sustainable, inclusive and balanced growth and job creation around the world. And we would like to ensure continuity of the dialogue on all the existing issues to facilitate further implementation of the previous commitments. And as for new ideas that we would like to suggest, we would like to implement them within the existing agenda rather than create a new agenda.

Russia believes that the discussions on all the interconnected issues of the G20 agenda should be organized around three overarching priorities focused on starting the new cycle of economic growth. And our priorities are growth through quality jobs and investments, growth through trust and transparency, growth through effective and efficient regulation. And these three priorities, all of them, as you have noticed, concentrated on growth, will be the lens through which we will look on the traditional areas of the G20 agenda. And let me just quickly remind you of these areas. This is Framework for Strong, Sustainable and Balanced growth, jobs and employment, international financial architecture reform, strengthening financial regulation, energy sustainability, development for all, enhancing multilateral trade and fighting corruption.

And to support the Russian presidency's focus on boosting economic growth and job creation, two new topics will be introduced, including financing for investment and government borrowing and public debt sustainability. As I already said, we would like to promote a result-oriented and pragmatic approach during our presidency's year which implies streamlining  the working formats and meetings along two central tracks - sherpas and finance ministers, and relevant working groups.

Another innovation, which we are planning to introduce, is a Joint Meeting of Finance and Labour Ministers. We will conduct extensive outreach with think tanks, civil society, business, youth organizations, labour etc. And we would also like to have excessive outreach consultations with other countries and country groups. And Ambassador Vadim Lukov from the Ministry of International Affairs who is present here, can tell you more about this.

So let me stop here and welcome you once again in Moscow and wish you an interesting, energetic, rewarding discussion, and I believe it will also be helpful and meaningful for the G20 sherpas meeting, here in Moscow.

And let me give the floor to Sergei Storchak, Deputy Minister of Finance, who will tell you a little bit more about Financial Track. Thank you.

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Opening remarks by Sergei Storchak, Deputy Finance Minister of the Russian Federation:

Good morning to all! Thank you, Ksenia, for starting presenting our position. As far as my part of the job is concerned, I would like to say that we, I mean those who are responsible for the Finance Track of the G20 Presidency, would keep to the conservative side, we are not going to widen the circle of people who will participate in our discussions, it would be still the closed club. So, please, rely on Ksenia's wide approach uniting a lot of different tracks as this one Think 20, Youth 20, Business 20 and others - all these serious jobs.

Well, we would be quite conservative from this point of view. The first Meeting of the Ministers of Finance will take place in the middle of February here in Moscow. We are now working on the agenda. I can not say, that agenda of the first meeting would be highly innovative one, probably we would better keep to the traditions of the club keeping in mind that we would definitely discuss risks faced by the world economy and financial markets, with understanding that the risks should not be discussed broadly, with these big references to general tendencies, to the rate of growth, rate of regulations, rate of growth of credits, deal average levels, etc.. We would prefer to concentrate on the concrete risks.

So if at our today's and tomorrow's meetings the think tanks representatives and people from business will concentrate on risks which we're all facing, particularly business is facing, we would appreciate it very much. Not me only, also my people from the Ministry here, we would be of full disposal, of high attention, eager to see how you treat the current conjunctions and understand your perception of what real risks do exist for creating jobs and speeding up economic growth. And definitely, we will start with updating our commitments, I mean the G20 commitments on the Framework for sustainable growth. It was a big step forward taken in Pittsburgh and elaborated further in Toronto and further occasions by our leaders to introduce this framework of commitments by the leading world economies. And we understand that it was good at the beginning. Now we're facing a very delicate situation when commitments and real policy action measures or policy actions do not coincide. Something is needed to be done and from this point of view we are going to be quite aggressive, trying to push leading economies to fulfill the commitments, particularly in terms of  implementing the promises on budget deficits and debt coefficients, as it was promised earlier.

So, the second main stream of the Track of Ministers of Finance would be financial regulation. From my point of view, in the field of financial regulation the G20 has reached biggest success, come up with the most impressive results. There are lots of different signs of this - I have just mentioned a couple of them. For instance, the so-called methodology "Too big to fail" that just chose 29 global banks for the purpose of closer supervision of their activities,  having in mind the routes of the recent crisis, plus Basel 3 agreement and OTC derivatives agreement, as well.

Hardly would anyone argue that we have managed to reshape the Financial Stability Board, we are on the eve inauguration of this club as a new international organization.

For Russia this comprehensive financial regulation agenda would mean a lot for a very simple reason. What is being discussed, what is being introduced mostly is for the developed economies. But still, Russia as an emerging economy, as the G20 presidency pledges to keep hand on this activities and, if necessary, to stimulate this discussions, and we are going to do it during the coming year.

And just a couple of words about our personal goal, to exclusively Russian proposal for the upcoming agenda. Ksenia has already mentioned them. One is financing for investment. Our first proposal was simply investment financing, but our friends from Australia proposed to change the title to be more understandable for those who are not directly involved. So, financing for investment means choosing the right source of investment, the right source of finance for the long-term investment put in a broader context. So, what we are looking forward to is seeing what kind of policy measures can be taken to stimulate the switch from one source of investment to another.

For decades bank credits were the main source of financing economic activities. Now we are facing excessive leveraging almost everywhere. So, what should be used as a substitution for bank lending? This is the question that we need to find the right answer to: whether it would be equity markets, whether it would be more multilateral banks involvement or whether it would be once again public finance. So we need to make the right choice agreed with economic conjunction.

And a few words about the debt issue, namely, debt management, as Ksenia described, government borrowing and public debt sustainability. Well, you know, we are now living for a number of years in the situation when almost each day mass media are reporting on debt issues, dealing with one country or with another, with the new one and so forth. But still, the G20 keeps its sight from direct involvement in discussing debt issues of different dimensions. On this crossroads we can discuss either the best ways of debt restructuring, or we can discuss the future of sovereign borrowings and debt sustainability. We would prefer to discuss the future, not looking backwards and trying to find the right solution in terms of debt restructuring, with the attempt to set up formal mechanism for debt restructuring. Well, nothing happened with this initiative and we know why. Whatever you are going to propose, statutary approach to the debt restructuring,   would be debt negotiation between sovereign, obligor and its creditors, in the end. So we are keeping to this position that while we are thinking on the future and try to see what can be done in the sovereign's commitment to keep to some set of advanced agreed rules, for the sake of accurate, let us use this word, accurate behavior on world's financial markets.

It is important for all of is in the global economy we all, I mean, all big nations, both borrowers and investors, while borrowing, buying, selling our bonds from and to the investors and  while investing in bonds issued by other sovereigns or corporates, when, for example, it is needed to manage our reserve funds.

So this is the general concept of issues for the Finance Track for the coming year. In the course of discussions I would prefer to hear due criticism, whether it is a right approach or not, in particular - in terms of whether we really can put the border between the equity market, as the source of financing, and debt market, or whether we should stimulate or reshape both. Thank you for your kind attention.