Service state awaiting customers

The first international economic forum, which ended in St. Petersburg in two years, left an unclear impression – there was practically no discussion of investments by big business, while the key discussions boiled down to an attempt to define the role of the state and business in the economic structure. SPIEF 2021 participants unconditionally recognized the growing role of the state, and at the same time the risks of digital expansion of state agencies. The authorities, in turn, promised not to compete with the private sector, but to stimulate companies to innovate and build proactive support, while business has so far taken an observant position. Probably, in the near future the parties will concentrate on clarifying approaches to building a service state in the Russian Federation – and until a consensus is found, the economy will hold an investment pause.

The St. Petersburg International Economic Forum, which took place after a two-year hiatus, revealed a sharp change in discourse: if in 2019 the authorities were just starting to discuss with business the support measures they needed for an investment breakthrough, then in 2021 the key topic was again the increased role of the state in the economy: it was discussed in context post-pandemic effects, stimulating economic growth, sustainable development and social responsibility. Strengthening the position of the state was facilitated both by the shocks of the pandemic, which required the government to build targeted support for the population and business, and the change of the cabinet of ministers in 2020 – its orientation towards building a service state requires an expanded presence in business affairs, but is often perceived as economic expansion.

In fact, by 2021, the state has noticeably succeeded in digital processes. As Deputy Prime Minister Dmitry Chernyshenko admitted, the state “is becoming dangerous for business” due to technological advancement and administrative leverage – exclusive access to data. At the same time, he promised that “the government will not use this”, while resources will be directed to building a client-centric model and transforming public administration.

Social support during the pandemic was a positive example: at different sessions, unemployment benefits, brought to the population in five hours, were recalled every now and then. Actually, this is exactly the kind of participation that the participants in the sessions expect from the state. In particular, at one of them, with a significant majority (89%), they voted for the concept “state for a person” against “a person for the state”. At another session, the head of the Accounts Chamber, Alexei Kudrin, noted that he consistently advocates reducing the state’s share in the economy, while recognizing his role as a “night watchman” – in defining the rules of the game, supporting the weak and achieving justice. The diagnosis of the phenomenon was made by the presidential aide Maxim Oreshkin, who concluded that “the left turn in economic policy is with us for a long time” (see Kommersant of June 4).

The approaches to the interaction of government and business at the forum were not fully outlined. First Deputy Prime Minister Andrei Belousov pointed out that business is not capable of setting support priorities in the long term; the state will do it for him, building a support infrastructure based on analytics. The authorities do not refuse to increase private investment, however, the tools available for this have so far been discussed in the context of deregulation (mainly in the construction industry), additional investment mechanisms or guarantees for business were discussed rather in terms of building an understandable environment for capital investment in the regions. RANEPA Rector Vladimir Mau pointed out that, due to rapidly changing development priorities, the government’s main task will be to remove uncertainty. However, the government’s capabilities in solving this problem are limited and still lie in the non-economic plane, recalled the head of the State Duma’s budget committee, Andrei Makarov. According to him, institutional reforms are needed to improve the investment climate (like a fair trial) – while the state has killed “the main thing in business – business has ceased to believe that entrepreneurial activity is done at its own risk and risk.”

It should be noted that the opinion of the business community was not clearly expressed at the forum: the polls presented at the sessions record only a request for clear rules of the game. For example, the owner of Severstal, Alexei Mordashov, complained about vague signals, noting that the government holds meetings on one day on price regulation and on improving the investment climate. One of the most important points of the SPIEF, we note, were numerous comments from government representatives that the state in the Russian Federation has neither a program of direct permanent price regulation in any segment, nor an intention to intervene in pricing outside critical and threatening situations – almost all of the representatives who spoke The White House insisted on this and accentuated, realizing, probably, the possible negative effect of the already held interventions of 2020-2021. Note that the pause that has arisen in the discussion of the participation of large business in the investment boom may be caused by the search for a balance in the interaction between the state and business – however, it is probably not necessary to expect operational results in issues outside the digital state. The service state has tools and a declared goal of universal convenience – how to immerse it in life, the forum participants will think after leaving St. Petersburg.

Diana Galieva, Oleg Sapozhkov