The impact of the world financial and economic crisis on the social and economic situation in the SCO area was discussed by experts at a roundtable conference sponsored by the SCO Business Council together with website InfoSHOS. The event was held in Moscow in Business-Center Alexander House on December 25.
The discussions were attended by SCO Business Council experts, officials of the Russian Ministry of Foreign Affairs and Chamber of Commerce and Industry, representatives of business and scientific communities, diplomats of the SCO member states and observer states.
Opening the Forum Alexander Starunski, PhD (Psychology), master of the Roundtable and Expert of the SCO Business Council, reminded to the participants that in August 2008 Russia assumed a role of chair in the Organization. In his opinion, currently the SCO has good prospects to support large-scale investment projects in the spheres of infrastructure, energy, transport and high technologies. “Our colleagues in the SCO states put on the agenda the creation of a common energy market to be followed subsequently by a common economic market of the SCO, they discuss the issues of a common currency”, added A. Starunski. According to him the SCO actually set a task to itself to move up to a new level of development in the conditions of the financial crisis and secure for itself a role of one of the leaders in the new multipolar world.
A. Starunski also read the Greeting Message of EurAzEC Secretary General T. Mansurov to the participants of the roundtable conference.
SCO Business Council Executive Secretary Sergey Kanavski pointed out that in the current conditions the SCO states have a unique opportunity not only to intensify the integration processes but also to create a common market, a common commodity, human and capital free movement area
"The strategic tasks to be achieved by the SCO states include to improve competitiveness of their economies, and to transit to an innovative-social development model, i.e. to create the economy of knowledge. To provide for closer integration of its members the Organization should develop the transport infrastructure, create a common energy market and common educational space, support the agriculture, and solve the problems of labor migration. The SCO Business Council pays priority attention to all these problems”, emphasized the SCO Business Council Executive Secretary.
The first conclusions on the impact of the global economic crisis may be made only in March 2009. This opinion has been expressed by Andrei Ostrovski, Deputy Director of the RAS Institute of Far Eastern Studies, Director of the Center for Economic and Social Studies of China and East Asia.
According to him China economically is a power, which all countries of the world are to reckon with – China is the fourth largest economy worldwide in terms of the GDP.
Meanwhile the crisis affected the Chinese economy too, and first of all, its financial markets closely associated with the world financial system, and industry of maritime provinces, which is mostly export-oriented. China has totally on the average 12 million enterprises of all types. Every year 1 million enterprises go bankrupt and 1 million enterprises are established. In the opinion of A. Ostrovski an alarm sign is a situation when no new enterprises will be established and number of jobs will be radically decreased.
As an anti-recessionary measure China intends to decrease the annual GDP down to 8 per cent at the expense of the intensive development of the real estate, automobile and rural consumer credit markets, added A. Ostrovski.
Sergey Luzyanin, Deputy Director of the RAS Institute of Far Eastern Studies, Director of the Center for Strategic Studies of North-Eastern Asia and SCO, expressed an opinion that the crisis will enhance heterogeneity of SCO economic models and modernizations strategies. According to him it will result in strengthening of the Chinese model both in the SCO and worldwide. Besides, we cannot rule out the enhancement of the Central-Asian attribute of the SCO, expansion of a geopolitical agenda in the SCO as a player on the world arena, and interaction with alternative projects: NATO, GUAM, EU and the USA. According to him cooperation will come to the fore instead of confrontation. In the opinion of Luzyanin, the world financial crisis will postpone observer-state membership in the SCO, yet this item will remain on the agenda.
Vasili Mikheyev, RAS Corresponding Member, divisional head of the Center for Asia-Pacific Studies in the RAS Institute of World Economy and International Relations, emphasized that in spite of the global financial and economic crisis Chine proceeds with its reform of the stock market. This reform stipulates transition to multilateral domestic demand promotion, and reduction of export and other taxes. He also paid attention to revitalization of the pan-Asian currency idea.
The crisis will lead not only to political but also to economic multipolarity. This opinion was expressed by A. Lukin, Director of the MGIMO Center for East Asian and SCO studies. (MGIMO stands for the Moscow State Institute of International Relations – translator’s note). It will result in a higher popularity of “non-Western” economic models. According to him in these conditions Russia should put forward its own efficient development model and intensively promote it. A. Lukin also urged to accelerate establishment of the SCO Development Fund.
At this conjuncture the SCO states need to elaborate a joint anti-recessionary strategy, said Lidia Krasavina, Director of the Fundamental and Applied Research Center in the Institute of Financial Markets and Applied Economics of the Financial Academy at the Government of the Russian Federation. In her opinion, the Public Private Partnership may become an important factor in response to and recovery from the crisis.
At the end of the roundtable conference Sergey Kanavski, SCO Business Council Executive Secretary, called the experts for joint work upon elaboration of an economic project efficiency rating system, and legal definition of the Public Private Partnership.
Following the results of the roundtable it is expected to publish a roundtable digest. The most significant communications will be posted on website InfoSHOS and other respective websites.