Yesterday, at the end of the G20 summit in the Chinese city of Huangzhou, the countries that participated in it issued a communiqué in which they agreed to use all possible levers of economic policy at the national and international levels to ensure sustainable growth of the international economy. In an interview with Vestnik Kavkaza, the chairman of the National Currency Association, Dmitry Piskulov, spoke about whether the G20's aspirations will be real.
- Do you think the G20 countries really have a desire to work together to ensure the growth of the international economy?
- Actually, the G20 was initially created as a response to the 2008 crisis. Indeed, I would say that it is not a political union, but a union of countries with economic agendas. And the first decisions, which were made in 2009, were aimed at stabilizing the financial markets. That is why not only developed countries such as the G7 participate in it, but also major developing countries such as Russia, China, Turkey, Brazil and so on. So during the preparation of decisions, which is done not only by the host country, but also by the G20 apparatus, a lot of economic issues are also considered. In particular, one of the major issues of the international economy at the moment is the maintenance and strengthening of world economic growth, which is very weak in Western Europe and in the United States, and even has negative indicators in Russia. Developing countries such as China and the countries of the Far East also show relatively lower growth rates compared to the past. Accordingly, many economic agreements were signed during the summit, including between Russia and China on various types of activities, on new projects.
- How will the G20 countries try to achieve stabilization of economic growth? Will they manage to do that?
- This is the most difficult question, because all countries are different, they have different economic policies, and they often have different monetary policies. It is very hard for them to agree on a unified policy, so they divide into different blocks. In other words, developed countries make certain decisions related to the regulation of financial markets, which are not relevant for less developed or developing countries yet.
So basically there is no unified mechanism and the G20 exists to discuss global problems and to find some common points that would help growth, it is held to carry out certain economic policies associated with freedom of trade, issues of pricing for certain products, the sanctions against Russia.
After all, there are generic issues associated with the work of the financial markets, with the work of the international regulators. Of course developed countries and the Basel Committee are in charge there, as well as the International Association of Financial Markets Regulators, although Russia is also a part of it. The agenda is determined by these countries, or rather by the agenda that is relevant for developed markets. Naturally, other countries also sign it, and then they partially carry it out, partially not.
They can't develop a unified economic or monetary policy, because each country follows its own economic growth model. That is why the G20 summits are more like a forum for discussion, partially to make decisions, not coordination of actions. If we take the discussion of a free trade zone as an example, it is obvious that cancellation of custom duties can lead to growth of an economy, the growth of mutual trade, but negotiations to achieve this may take many years. So you should not overstimate the G20.
- Is the stabilization of economic growth really a key goal in the international arena, or does the international economy have much more significant issues to discuss?
- Actually, the goal of any economic policy, of a government's actions, is to ensure sustainable economic development. Development is associated, on the one hand, with economic growth, in other words, with GDP growth, the growth of production of products, services, incomes of the population and so on. On the other hand, it is associated with the improvement of the quality of life: improvement of availability of services for the population, infrastructure and so on.
Of course, the first part – economic growth – is still on the agenda, so it is still the focus of attention of national governments. It is a complicated integrated concept, which depends on many parameters, including total demand, public demand, how often people take loans, the current condition of enterprises, taxes and so on. Basically, the higher economic growth is, the higher and better the growth of demand for the final product. And the welfare of all people becomes better as a result of that.
On the other hand, this issue cannot be resolved unequivocally every time. Many developed countries, Great Britain for example, even created a shadow government at one time, which expressed alternative opinions on what the goal of economic policy should be – purely economic growth or providing satisfaction and happiness for the entire population. So a Ministry of Happiness was created – a shadow government institution that measured this indicator. For example, it is possible to ensure high economic growth when everyone will take loans, consumption will rise, but the satisfaction of the population will fall, and this is also not a good state of affairs. So the satisfaction of the population with their current situation is also one of the main goals of economic policy.