The G20 common coordinated actions would help to find new drivers of growth
Dear colleagues, I would like to highlight the importance of the G-20 countries' actions for the benefit of trade and investment growth in conditions when the global economy has not been placed yet on a path of sustainable growth. Moreover, due to the lack of investment resources and formation of new international financial and economic reality, where former models and traditional tools are outdated, destabilized emerging markets may pose an immediate threat.
Ongoing structural shifts in global trends have led to the equation of growth rates in developing and developed economies. During 2000-2010 difference in the average GDP growth in developed and developing countries was about 4.4%, in 2014-2015 it dropped to 3.4%. According to the IMF forecast, in 2016-2017 it will decrease to 2.5%. Some developing countries have low costs for natural resources as the basis of their international competitiveness. Such economies frequently become less attractive for the foreign investors when the GDP per capita reaches “middle income” area.
Adaptive economic policy, constant improvement of human capital as well as high quality of institutions are coming to the forefront of sustainable development of every economy. Thus, if these elements are close to those of the developed economies, emerging economies would be able to maintain high growth rate in new economic reality.
On the one hand, currently it is difficult to name countries that are able to demonstrate high growth rates in the long run. On the other hand, the explosive growth of technologies has led to a slowdown in demand for raw materials and their de-emphasis as a factor of growth and investment attractiveness.
Turnover of world trade is significantly reducing; global challenges as well as security issues are escalating. There's an urgent need to find new drivers of growth as soon as possible. The G20 common coordinated actions would help to solve these problems in a more effective way.
It should be noted that trade itself is not directly an engine for economic growth, but it is a factor of development. Moreover, today many countries have imposed restrictions on investments, that affect trade growth.
In this context, Russia's economic policy aims at strengthening of potential growth. That could be achieved through more effective and efficient use of labor resources, capital formation through investment attraction, and finally through increasing labor and capital productivity.
This goal could be achieved through the following set of measures:
- increase in investments in high-tech and innovative sectors, as well as science, education and healthcare,
- more intensive adoption of energy saving technologies,
- boost of innovation of large state-owned companies, including development of supply systems of small and medium-sized innovative companies,
- expand tax credits for R&D and accelerate depreciation of high-tech equipment.
Alongside, it is essential to focus on smart investment policy, which is based on three main pillars: firstly, creation and maintenance of investment resources; secondly, arrangement of conditions for the transformation of domestic savings into domestic investments, which include macroeconomic and regulatory measures aimed at higher level of business confidence and improvement of business environment. Thirdly, stimulation of investment activity through the mechanisms of state support.
Complex implementation of these measures, which are aimed at extensive and intensive development of production factors, could ensure strengthening of economic potential with long-term and stable dynamics.
In this regard, we welcome establishment of the G20 Trade and Investment Working Group , aswell the active and efficient work. During the Chinese presidency it resulted in a range of documents that, in our view, would enforce the G20 members to concentrate their efforts on growth achievement, investment attraction and strengthening the role of the WTO.