Davos 2016: feeble voice of Russia, beat on the USA and suspended diving of the Celestial Empire
23 January is the last day of World Economic Forum in Davos. The correspondent of Realnoe Vremya Albert Bikbov sums up the event.
Modest Russia
This year the Russian presence in Davos has shrunk to indecently small sizes… Suffice it to say that the official Russian delegation was headed by Deputy Prime Minister, Presidential Envoy to the Far Eastern Federal District Yury Trutnev. However, usually the organizers invited President of Russia Vladimir Putin and Prime Minister Dmitry Medvedev… But another time has come – the Cold War with the West doesn't give any choice for the heads of the government.
We would remind you that in 2014 Deputy Prime Minister Arkady Dvorkovich headed the delegation, in 2015 – First Deputy Prime Minister Igor Shuvalov. But they represented the economic block of the government. And Yury Trutnev is the specific promote of Asia-Pacific agenda in Davos. Even the Head of The Central Bank of Russia Elvira Nabiullina cancelled her visit to Davos, although previously she registered to participate in the session 'Dilemma of the Global Debt'.
On 20 January the President Vladimir Putin as a joke praised the members of the Cabinet who participated in the entrepreneur forum 'Opory Rossii' for not going to Davos.
'Everyone who is here, it is clear, didn't go to Davos. Apparently, didn't have enough money for tickets,' – joked the President.
In response to the remark of one of the participants that thus the members of the government save government funds, the President said: 'Good! One should work at home!'.
At this rate, even ordinary clerks won't go to next Davos…
But earlier every Davos was an iconic and momentous event:
Balls, beautiful maidens, lackeys, cadets,
And Schubert's waltzes, and French bread's crunch,
love, champagne, sundowns, alleys…
So ravishing are the nights in Davos! (с)
(from the song 'So Ravishing are the Nights in Russia' / 'Kak upoitelny v Rossii vechera' by Bely Orel)
With French bread and waltzes by Schubert
Now dull and thinned out (this year the organizers have reduced the number of invitations for official delegations of Russia) representatives from Russia are like strangers on this holiday of life. There was no Russia's round tables. There was no special reports on scenarios of successful development for Russia. And it is clear – now Russia has no winning economic agenda.
The only one panel session 'Outlook for Russia' left on Friday, 22 January, the penultimate day of the forum. Yes, modest musical evening for the Russian delegation (yes, all with the same French bread and waltzes by Schubert). But it is far to be ravished by the nights in Davos…
By the way, present from the beginning of the forum the President of Tatarstan Rustam Minnikhanov didn't stay for this Russian panel session and left for home ahead of time.
Outlook for Russia
The panel session Outlook for Russia-2016 turned out to be pretty boring…
Chairman of the Board of Directors of Vnesheconombank (VEB) Vladimir Dmitriev said that Russia 'is certainly not a downshifter': 'Enough to curse our economy, our government – let's look at positive developments.'
As positive trends, he recalled the VEB projects, including those implemented together with Tatarstan: set-up of the plant Ammonia, plant for production of Ford engines.
'Our country is developing like all states, built on energy. And God grant, this lesson with bad numbers gave us the opportunity to move from words to deeds and we started structural reforms in the country,' — implored with hope Dmitriev.
The former Minister of Finance Alexey Kudrin also demonstrated feigned optimism: 'I am sure that the sanctions will begin to decline at the end of this year – early next. I think that the Minsk agreement will run, sanctions will be reduced.'
But life is raging somewhere near
Meanwhile, behind the velvet curtains of the Russian lobby the life was raging. The official theme of the forum in 2016 is 'Leading the fourth industrial revolution'. Surely, there has been much discussion about robotization (20 sessions, including 'What if robots will go to war?'). But, objectively speaking, the main theme was humanitarian issues.
'Global solutions to global migration', 'In the hope for prosperity: reflections on the flight and migration to Europe', 'Armed extremism: from global threats to local solution', 'Evolution of political Islam', 'Understanding Islam', 'From migration to integration', 'Integrating refugees', 'Maximizing the talent of the refugees' — are the themes of Davos-2016, not of the agenda of the conferences of the UN Security Council or the UN Commission on the human rights.
Lots of discussion was about the sorest point — about the fall in energy prices and the slowing Chinese economy.
Nouriel Roubini, known for his accurate predictions, Professor of Economics in Stern School of Business, was categorical: 'I do not think that China will have a hard landing, but the markets are more and more beginning to think so'. The prospects of China Roubini described with the expression 'turbulent landing', growth may be about 6%, 'it's more or less normal, but now information is coming negative and people are nervous'.
Chief economist of Standard&Poor's Paul Sheard expects GDP increase in 2016 by 6.3%: 'Let's not forget – from the point of view of contribution to global GDP real growth by 6.3% this year is equivalent to about 14% in 2009'.
Beat on the USA
Among discussions of the problem of low oil prices at the forum they have drawn attention to a curious phenomenon: instead of paying attention to positive consequences like the growth of disposable income in the countries that are major oil consumers, investors are waiting for the deterioration of aggregate demand in the world due to economic problems in developing countries, many of which depend heavily on the export of raw materials.
Another interesting fact is the unexpected impact of the 'Shale Revolution' for the United States. The sharp increase in the production of oil and gas in America (the largest importer of the US became an exporter) have led to the next effect. Before, the fall in oil prices has made American consumers richer, but American manufacturers lost a little (because they covered a small part of U.S. consumption), in other words, a drop in oil prices was a net redistribution toward America. Now, when all consumed oil is produced in the USA, the country does not win from falling prices. Hence the sharp drop in US stock market — the Dow Jones index showed the worst beginning of a year since 1932, S&P500 — since 2001...
Although these problems affect Russia, but, unfortunately, now her voice sounds feeble on the outskirts of the World Economic Forum…