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 st petersburg international economic forum holding a panel discussion on the crisis of capitalism our panel included academics c.e.o.'s and 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. for out of your mouth he is rector of the russian presidential academy of national economy and public administration your last he is chairman of the management board of the investment banking division of barclays are meant to sign here frozen out of the eurasia house international and we also had an independent economist.

and when we go to you first. do we have capitalism today well i think that. we have extreme capital as in capital. cost of the world people rich people can move around and that is a capitalism well i think capitalism in. capital is movable and looking for opportunity and i think that how we do it if one capital isn't traditional economic theater we see it's competitive markets and our capital is a competitive markets to that extent i think of the system being subverted it because. on the one side is the government intervention we see the rise of state capitalism everywhere on the other story or people would say corporate capitalism.

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 i think of these three forces. really undermining the the the world of market economy first of all i don't think we should get hung up about names and this capitalism sounds like cup at the least was you know nineteenth century discussions that. it's not about that it's about market based economies rules based 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 soak in the 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 that factors that are

important here i think one factor that out of many that the world 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 socialists now with the breakdown of the of the of the berlin wall were 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 capitalism or socialism there each country has its own way of handling it that 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 now you can't fail that's why. under four 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 no 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. if they all go to jail ok let's listen to your own country where are you from originally from california. ok so i'm fine if you come to europe but 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 or 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 being big call it

capital of social and then you'll survive but this is what you it all you can do you can no make 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 the 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 last night. when i grew up the idea that i just heard there's a law of nature was what we used to call the revolution of rising expectations right. it's just completely natural to me and i never have all that i would have

a better life than my parents were not that's an american creed to yes very much for america and 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 sas changing need. places for them to use the skills and so i think that's an area where we really need to know this is the expectations rising expectations is much more of an emerging market world experience right now and when you think about that. no in russian federation sometimes you have a very interesting joke we speak about one o nine book named. as

a very good socialist country i have a question what country do in socialist countries yeah and then well russia the best example. of course. finland and so on when i came to finland they said meal is paroled we have no one person and for. only one person this year it's number one and it is all protests that we invest not in banks nor in the financial structures but first of all we invest for all people for education system for health care system and so on and so on. there is no that is the difference and you're not a i think i want to make comment on the scandinavian countries because dave down

there well in the last five years but actually i think the story over the end you look at that i am of sort of poor pointing out that the household debts over there the level the highest in the world have been rising very rapidly they have widespread interest only mortgages. huge amounts on the books 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 the financial crisis of. two thousand the crisis we asked for about ten years or so this is a crisis structured the cries of industrial world for a state. crime is this so we look at the car and cry the crisis is more severe where the traditional industrial state or welfare state is developed in europe it's not as strong and united stated with almost no welfare state 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 is 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 dodgy and look at the stations that contrasts with. develop a first date 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. congress emerging economies are will for industrial development a welfare state or will there would be just completely new decisions in a pension but if you want to run and you want to dress like this i think that's very interesting because we saw the west as a model for. a century or so ok of 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 by the west you mean. european and europe.

and which the north that 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 at 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 others say well remember the 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 country's fifteen years ago have been very cautious you look at indonesia the no no financial sector debt is only sixty percent of g.d.p. extremely low. so china. is a pretty high spot a two two times show and needs some adjustment to make and only show attitude

towards the wealthy i think that there is a structural reason why emerging economies to have a less dependent state welfare is because a family is still. the welfare. of the family and i think the future we don't know if you look at a one child policy in china. most the country's wealth 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 googlebot is about a speculation i you keep point out of these are two separate reasons no you mix of the two you are getting 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 it into it's own president of the people is going to be one hundred. by the end of the century and if they don't walk more like a forty year it's. going to pay for it and then if they don't have children you know people want to have welfare and don't have children and so on who are going to

pay them no lawyer so i think the way to go where you know i'm very troubled a wall with him at the gates ahead. the killer though if. someone. chooses that is the consensus here. choose to opinions that you think are

a couple. clues to stories that inflicts choose access to officers. live. live. lives. that speak. her. mum will. live a long slow. play. play

lists. and. run a little. drama is the chance to be ignored. stories others refuse to notice. the faces change the walls lights now. so picture of today's place. from around the globe. up to. fifty.

on the money. we're discussing the crisis of capitalism at the same petersburg international economic forum. saying you have. invisible. things i think it needs a very visible. balance out

but. to allocate all resources to either you or me. and i think we have come to. this. we have a very. which is more innovative it's a different structure compared to europe there's no doubt. this. is about countries have to choose their own way i think it's very very important was important because if you go back some twenty to twenty five years ago what that was not. there was a wonderful mother which was the story of the with the what they were you call it the worst thing you have united states and when the country so former soviet union started their power they all dreamed over

a wonderful life like your switzerland they thought it will come tomorrow immediately and it's of the mother was very simple just privatized it never a lovely little lift in poland in the name on 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 there is having was a lot of stuff is one thing in my second lot of i used to be 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 here was blockaded by its neighbors it had a conflict with its another neighbor so there was no intention from the huge army

and versed in the country because they would like to send money as well so there was no common sense in privatizing to accept the job and they would think the begin destroying is for peanuts and basically destroying them so what i'm trying to say here listen i was going on oh 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. we heard here here in this country not only has a choice but has to really think about all its own a 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 all ok no but it's not about the i.m.f. let me defend for once. please do 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 to 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 realise that i have a banana and so you've spent the whole of it now instead of doing like what the chileans did we're just keeping it for the next generations etc and then so 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 rule so there are certain rules and there are more and more integration in the world economies and for that you need a lot more commonalities and more plug and it's good that we're on the opposite

ends here i mean you wanted to. you see just to well i would come to a little bit to be atoned this but of course. you know this is a famous first trees are on the cut in them by their own tall story that all families are. in the same way and. have disaster in their personal way that's why i would say to allege extend the same the country is historic be some galatians some rules some general rules not to make a disaster but they go to the disaster food in their own 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 which of them to stand the political for going to. exist. we can know what you meant to crisis if you're going to do but credit always will if you're going to do care is look at it would be all. right all the rules for their own advantage no one goes to jail there's no downside you never

can fail i mean this is making we're making a very simplistic model here but we're forgetting the issue of politics there that's very important to me and this is well let's be not simplistic. all this impi they were. brothers that's it and actually quite a number goes to prison but to come back on something more important. is for example having been chairman of the second largest company in the world we are discussing obviously the day in and day out take russia and is a typical example how the state should function russia has new wood and i think it's two thousand eight hundred. sixty percent of all drugs have to be produced in russia. that is a state it doesn't say we will do it it is your call me is going to do it

with 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 many many of them in boston in switzerland. they will stay here because of protection will be here and this is a typical example of how a government can channel. 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 in all it's already are all seriously go by. if you are either tolerating sixty percent are a big territory if you don't produce it competitively you're condemning the population to buy expensive low quality problem sorry no one knows you're good to

have the wrong. rule be put competitively so have not exclude it's a form from say they have not excluded imports in newly developed they just do something which is a say and give a huge incentive to the country to develop an industry which didn't exist anymore why not open more to competition but you don't like what occurred here shake isn't it open to because it protection is right anyone anyone can pick we should we should resist protectionism on trade eat what is creating jobs in this wonderfully what about if it's creating jobs in this current interglacial yes they send their kids to school that sounds like a good idea to me by a 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 going full circle here we're all talking about and. then i have to have to correct you it's a question of security as well you are going to put the disposal of vaccines where we 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 need to go i'm not really sure if you smoke or tourist in the us better. the inefficiency on sawrey way indication but real progress on the road i'm sorry you know we can all live in a dream world but we do not believe in one country and come to. a competitive security. and will remain a very important thing but. just 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 you do believe that the more secure country is no thinker here. i can make every exception as it was in the. evening it's no problem it's not serious not to understand that governments can gift 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 should break certain police which the export thing from which i need a long and i nevertheless we all understand that these things should be done by generics from israel there are cheaper goods you know just ahead of time. 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 . ok. to take all of virginia it's a little while in the middle of the chesapeake bay under virginia. one of the reasons for. that you have to endure island before the channel was. oh here. up there. as

go all. right here are some of the headstones graves it for here this is a fruit that's what we don't want happen to tangier all and we want to get some protection and make sure that we don't go into the chesapeake bay like albert did in other communities. least be told language. programs and documentaries in arabic it's all here on. reporting from the world's hot spots the v.o.i.p. interviews intriguing story for you. then try. to find out more visit our big. dog called.

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