hello and welcome to our in the money where the business of russia is business i'm peter all of this month we were at the same petersburg international economic forum holding a panel discussion on the crisis of capitalism our panel included academics c.e.o.'s in opinion makers ronnie goldberg she is the executive vice president and senior policy obvious or at u.s.c. i would be all go ahead she's deputy prime minister of the russian federation and help gloria he is secretary general of the o.e.c.d.

florida miramar he is rector of the russian presidential academy of national economy and public administration hons york he is chairman of the management board of the investment banking division of barclays are meant to sign here for isn't it of the eurasia house international and we also had an independent economist. let me go to you first. do we have capitalism today well i think. we have the extreme capital as in capital the. course of the world people rich people can move around and it is a capitalism well i think capitalism in. capital is movable and looking for opportunity and i think. how we do it if one capitalism traditional economic theater we see it's competitive markets and capitalism and ok if i can. marcus put

out extend i think of being subverted because. on the one side he's a government intervention we see the rise of state capitalism everywhere on the other side or people would say corporate capitalism you know you know we have. the other side we have a. capitalism that's sort of relationship based kept advocation then we have a financial capital as a way speculation now i think of these three forces. really undermining the the the the world of market economy first of all out of the grid should get hung up about names and this capitalism sounds like you know nineteenth century discussions that. it's not about that it's about market based economies rules braised economies this is what we're talking about and the reason why some are doing better than others is because they played their cards better because they got it right and right no we have the best example of the differentiated approach is the ones who

did it right who saw it coming got it better and have much better results i think i would like to know what the world called. to say here is first of all what is capitalism at the end of the it's about competitive there's competition or an airship interpret north pole for the factors that are important here i think one factor that out of many that i will facades is the breakdown of the berlin wall so before the world was i would say as a former physicist the world was classical you have kept a list and you had social it's now over the breakdown of the of the of the berlin wall we're entering the new world where politics and economics are quantum what does that mean in the biz that it's globalization at the end of the day it's ever in each unit matters it's quantum it's not the global idea. of capital is more social is there. each country has its own way of handling capital is together with

ideas from social is because soviet union doesn't exist the fear of soviet union other nations you're absolutely right because rich people have socialism. you can't fail it's wonderful you can make catastrophic mistakes and you'll be bailed out so you have cap you have socialism for the rich and everybody else all the rest of us can tell you who's listening to you know it's not only socialist for the rich it's also socialism for i mean isn't for the rich for god so ok ok let me go even further with that list of. go to jail ok let's let's let's take your own country where are you from originally from california. ok fine fine if you come to europe. it's a wonderful place. at the end of the day if you take europeans there is what has happened i think the whole idea of welfare state which comes with the idea of

equality that every citizen has the right of this has the right of the second thing to the third has become a economic huge burden to that quantum human it the whole idea is development if you're quick enough if you change yourself if you are evolution doing big kohli kept a lid social then you'll survive but this is more of your point all you can do it our economic growth you could have economic growth you can create dividends you can create profit but you don't always create development ronnie it seems to me it's just another bubble being built again it's really it's going to run here because it seems to me it's putting it off putting it off you know i'm not sure what it is putting what off i want to go back. and i think what is new is the pace of change. which is creating its own situation and its own dilemma for and particularly for young people who are a big part of. whatever crisis we're talking about now in many countries and.

variation when i grew up the idea that i just thought there's a law of nature was what we used to call the revolution of rising expectations right it seemed just completely natural to me and i never double that i would have a better life than my parents were not that's an american creed to yes very much american that i think is what is in danger now and part of the reason is the pace of change and the mismatch right now between the education system and the skills and the capacities that kids are learning and the fast changing need or places for them to use the skills and so i think that's an area where we really need to know. that this is the expectations rising expectations is much more of an emerging

market world experience right now or what do you think about that. no in russian federation sometimes you have a very interesting joke we speak about one zero nine a book neighbor. is very good socialist country i have a question what country do women socialist countries yup and then will russia the best example. of. finland and so on when they came to finland they said meal is proud we have no want both of them for. only one person this year it's number one and it is a set we invest not in banks not in the financial structures but first of all we invest for. people for education system for house

gases and so on and so on and they have a very good result that is the difference and you're not a i think i want to make comment on the scandinavian countries because steve down there well in the last five years but actually i think the story over the end you look at that sort of poor pointing out that the household debts over there the levels are the highest in the world have been rising very rapidly they have widespread interest only mortgages. huge amounts only i think that this story may be a bit too good to be true let me know were raised a very important question because these cries of this global crisis not a financial crisis of. two thousand dollars but the crisis we chill last for about ten years or so this is a crisis structured the crisis of industrial world for a state we care over the koran is this we look at the current cry the crisis is

more severe where the traditional industrial state welfare state is developed in europe it's not as strong and united just it where it is almost noon. or in russia or in russia itself the situation because of this welfare state collapsed in the ninety's and it was a situation is much better in imagination economy because there is no central bank . there's that that's there's no in sense of entitlement ok well it is in the european the euro zone there is huge in title in the united states it's kind of object and look. at that contrast with. developed industrial face but it doesn't meet the productivity requirement that's in the southern europe is stronger than the northern and again one of the question one of the most interesting question is whether the. contras emerging corner mr will. industrial development or welfare state or will that would be just completely and you do see.

if you want to run if you want to dress that is i think that's very interesting because we saw the west as a model for a century or so ok at the cold war in between but is what the west is doing a model for everyone else or is it different ways of doing it because when you look at it's very different well if the west. european new york. which is north of this is clearly showing that. the whatever they have built up is not sustainable at least not sustainable in its present form then i think the questions asked and answered. but i think this brings out the. limitations of talking globally the situation in india where something like eighty percent of the economy is informal in other words. not paying taxes not subject to any kind of social safety net and so on that situation

is. very different from i don't know china or other parts of emerging asia. and unless we can figure out unless the indian government or the indians writ large can figure out a way to tackle in formality they're never going to tackle developing india which i mean one thing emerging markets can learn is that not to go so much into debt i mean this is a huge issue when you you know the russians got burned so bad in the one nine hundred ninety s. they just keep stuffing money away because they're just so paranoid about it it's a good policy ok there's a lot of people in the russian government with all due respect to spend and spend and spend it ok and there's a lot of other say well remember the one nine hundred ninety s. we're going to keep some money for a rainy day so i mean different perceptions of how the economy is changing much more risk adverse i think that of the countries fifteen years ago have. being

very cautious you look at indonesia the no no financial sector debt is only sixty percent of g.d.p. extremely low and so china. is in pretty high spot a two times g.d.p. so i just went to make and i only see attitude towards welfare i think that there's a structural reason why emerging economies to have less dependent on state welfare is because of the family is still. the welfare. of the family and i think the future we don't know it's going to one child policy in china in. most countries both rates are declining so where the world will be we don't know it's. the structural change we're talking about i know with the crisis of capitalism i was google that is about a speculation point out of these are two separate reasons no you mix of the two you're not of the specter is a get away you know so we're on the same side i'm all for talking about

a structural changes i think that it's unprecedented at a people is going to live one hundred. by the end of the century and if they don't walk more like a forty year. we're going to pay for it is if they don't have told you know people want to have welfare and then they would have children who are going to pay them so i think the way i go where you know i'm very troubled a wall with being there in the decades ahead. it's the perfect material it's a lie you make just a small change and you get a totally different result. pretty. cool so this is a little complicated. geometry we start to muster you know the answer. as

a guy. it's very intricate what. my life has changed a hundred percent. from the field operating table here with more than just a very small table as long as i had a flashlight and a working battery and i had a good enough environment to work it. was among them along with some other terrorist leaders. to as if he's reminiscing about the past he's looking at you at the same time he's somewhere else. when i watch this. it doesn't feel like me at all and. it's someone totally different someone i don't know.

the interview. could. choose your language. choose the. the consensus here i can. choose to opinions that invigorating.

choose the stories that entire lives choose to access to your office or. that. much.

welcome back to on the money i'm peter all about her mind you were discussing the crisis of capitalism at the st petersburg international economic forum. support. model and i am not someone who is saying you have a high type. liberal listing it doesn't work i do not believe in the invisible hand which arranges things i think it needs a very visible hand this state has many things to do so the state should balance out but state should not abuse of its monopoly to allocate all resources to either you or to me never know and i think we have countries which balance this with

world of a bit less we have a very vibrant demand. which is more innovative it's different it comes from a different structure compared to europe there's no doubt in your we are different in that sense from the european continent. countries to choose their models it's about countries have to choose their own way i think it's very very important why is important because if you go back some twenty twenty five years ago what that was not the case there was a wonderful model which was the story of the with the what they were you call it the worst thing you have united states and when the countries or former soviet union started their power they all dreamed of a wonderful life like your switzerland because they thought it will come to morrow immediately and it's of the model was very simple just privatized it nevertheless

they lived in poland in the name of release and they said we have capitalism we'll just have more stuff. and i said what's not is simple is that no we did you guys have a lot of stuff we'll have lots of stuff to a chair lift because. it was a lot of stuff is one thing in my second love i used to be a politician i used to be prime minister of my own country so one of the first challenges i met was how do i handle the world back basically i became a prime minister and what i had on hand was a country of three or four or five years of independence just privatizing like mad everything that we had while the country was blockaded by its neighbors it had the conflict with its other neighbor so there was no intention from the huge army and spread to invest in the country because they would like to send money as well so there was no common sense in privatizing except the hopes and everything the big industries for peanuts and basically destroying them so what i'm trying to say here

listen going on no no i think that's also not being educating those taken by an example of success so what we have learnt probably one of the lessons that well learned to know that as we heard here there in this country not only has a choice but has to really think about how it's own the model of success of balance the i.m.f. has a different point of view there are a lot we want our money you have to do this you want our money you have a lot of conditionality it conditionality conditionality it's all nice and fine what you decide i agree with you but the i.m.f. comes in a whole ok now but it's not about the i've been let me differently for once. please do it it's because it's not about the uniqueness and the exceptionality and everyone is different and so different there are a lot of common things that we've got to do we've got to get the fiscal stuff right in order to be able to pay for the minimum of services that we choose we can't

choose a certain model and then not pay for. it for example or get here because we love the model and then you know pass on to the next to the next generation or if you are blessed with for example roma to realize that have a banana and say spend the whole of it now instead of doing like what. did we just keeping it for the next generations except for and then so the question of the exceptionality is fine every country is unique it's original it's different accent or but not so unique not so different you know there are common rules so there are certain rules and there are more and more integration in the world economy and for that you need a lot more commonalities and more plug ins it's good that we're on the opposite ends here ok i mean you wanted to. you see. i would come to elaborate to be atoned this but of course. you know this is

a famous first trees are on the cutting them by their own tall story that all families be in the same way and. their personal way that's why i would see the ledge extend the same country as his store to galatians some rules some general rules to make stuff but they go to the does their unique way as soon as a country says i'm unique no economic rules exist for me it's the first step to economic disaster again we should be more just we should do to stand the political figure performance exist i would go for us we can want men to come in crisis if you can predict that christ always will if you can plead guilty eyes look at what was. right all the rules for their own advantage no one goes to jail there's no downside you never can fail i mean you're making we're making a very simplistic model here but with forgetting the issue of politics then that's

very important to me and this is not simplistic. all the c.p.a. were. brothers that's it actually i actually quite a number goes to prison but to come back on something more important the health service for example having been chairman of the second largest company in the world we are discussing obviously these subsidies day in and day out take russia and there is a typical example how the state should function russia has a new wood and i think it's two thousand and eighteen. that sixty percent of all drugs have to be produced in russia. that is your dose to state it doesn't say we will do it it is the your call me is going to do it with it's foremost because it's russian companies but they have to be produced here it's a question of price it's a question of security it's

a question of control it is particularly a question to give a new life. in the country so that the russian scientists all working possed many many of them in boston in switzerland where would they as they will stay here because of protection will be here and this is a typical example of how a government can channel guide and push things in the right direction to fill what you rightly mention is still a relatively big gap of able but this is the wrong direction and all it's really a visitor all seriously go by water if you're a. territory if you don't produce a bit that way you're condemning the population to buy expensive low quality bro i'm sorry i know they're good they have the wrong. it will be produced compared it to flee so they have not exclude it's a form foams they have not excluded imports in newly developed

they just do something where they say and give her a huge incentive to. as a country to develop an industry which didn't exist anymore why not open more to competition but you don't like what the quarter shape is it is open to because if there are checks in a strike anyone anyone can pick we should we should resist protectionism on trade eat when it's creating jobs in this wonderfully what about if it's creating jobs in this current situation yet they send their kids to school that sounds like a good idea to me by blow to the big board you just want big pharma to invade russia i mean look you know reporters shoot yourself in the foot because you can't export nobody is competitive the world is no organized along global value chains and you do one of the links of the global value chain russia or any other country in the world it has nothing to do with russia it is the way the whole production in the world is or we're going full circle here we're all talking about it and then i have to have to correct you it's a question of security as well you were going to put the disposal of

vaccines where we i'm saying now we can choose whether we give these vaccines to america doesn't produce a mile over to russia well security is a very strange birth we don't have to go through. a few smokers who are doing just . the inefficiency on sawrey way indication but we're programmed on the right i'm sorry you know we can all live in the dream world but we do not believe in one country and come to. a competitive security ease and will remain a very important thing but you're saying this is. just let me let me finish so not to say it is sponsibility of the government in switzerland or in germany or in france to take care of the security of their people should it do we believe that the most secure counties no i think are here for this world. i can make every

exception as a trial lawyer in the. evening it's no problem. it's it's not serious not to understand that governments can gift that direction and for example in this particular case to close the very hell skep you are mentioning. yes production should be here yes it should be cheaper yes one short break certain elites which the export thing from which i get along and i nevertheless we all understand that these things should be done by generics from israel they're cheaper and there's a good you know just a lot of typing them out it's the right idea i kept pushing the crisis part but we got some optimism here i want to thank my pet wonderful panel here and i would like to thank our audience here for being with.

us.

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