‘To Keep our Position We Need to Improve Very Fast’
— Today you’ve spoken a lot about administrative barriers and Russia’s cooperation with other countries. What are the problems in the Russian investment climate?
— The investment climate is a complex thing. There are direct factors which influence it, such as the tax burden. Formally, the tax burden in Russia is not that high. Ten years ago the business community was burdened not by tax tariffs, but by tax administration. Tax rates were low, but there was increased pressure with tax inspections and additional tax charges, the procedures for which were poorly defined by the law.
Today many things in the sphere of tax have changed dramatically. Particularly, now that tax administration works according to fairly transparent schemes. As a result, while before the crisis the problem of tax administration was considered as one of the main obstacles for business, today this issue is in fifth or sixth position.
One of the key problems is the administrative barriers related to issuing permits. They include permission to get connected to networks, permission for the allotment of a parcel of land, for construction, and so on. The abundance of procedures around these permits naturally leads to subjective decision making, and it becomes hard to defend a company’s interests in court, for example, since not all procedures are clearly defined by law and there are sometimes no administrative rules for certain procedures. The main problem however is the corruption it is open to. The propensity for corruption in many permit schemes is obvious for the business community, and that’s why business entities often decline certain projects or go to another jurisdiction.
Today in particular we have real competition between the Russian and Kazakhstan jurisdiction as part of the Common Economic Space. In Kazakhstan the tax rates and social insurance payments are lower. Several hundred Russian companies have already re-registered in Kazakhstan. On the one hand, this is bad and is a sign that something is wrong with Russian procedures and rules. But on the other hand, this is good, because the competition between the Russian, Kazakhstan and Belorussian jurisdictions can lead to balancing the business conditions. And these conditions will be balanced to the positive side, which means we should use the best practices from different countries.
The same relates to foreign investors. An investor goes where it is more profitable.
— What is the general trend in recent years? Is there an inflow of investors into Russia?
— Of course, there is an inflow of investments, but now a period has come when all investors who had wanted to realize large projects, mainly in oil and gas, production export and commodities, have already realized them.
Today there is an opportunity to implement large projects in infrastructure. But we need a different regulatory framework, including concession agreements and life cycle contracts. Not everything is developed on the legislative level, and as soon as it is, we can expect more large projects. They could include those related to the 2018 World Cup, like airports in different cities. Some laws have been adopted to facilitate investments in the Far East and Baikal region, so it is possible to expect some large infrastructure projects there, including sea ports in the Far East.
At the same time, today efforts should be focused on attracting medium-sized capital and institutional investors, such as investment funds. They are an indicator of a favourable investment climate, since they are more flexible and focus on fast-growing projects, fast return on investment and risk minimization.
So, we can state that some progress has been made in this sphere, but on the other hand, we should look to the future. Even to keep our position in the rankings of the World Bank and others, we need to improve very fast.
The HSE Centre for Studies of Income and Living Standards studied the dynamics of the middle class and its behaviour with regard to paid services. The study was based on data drawn from the HSE Russian Longitudinal Monitoring Survey (RLMS-HSE) for the years 2000 to 2017, and the results were presented at the 20th April International Academic Conference hosted by HSE.
Reproductive behavior is modernizing at different rates in post-Soviet countries. Things are changing faster in Russia, Armenia, Georgia and Ukraine, where, over the last fifteen years, the average maternity age has increased and the contribution of women in their thirties to their countries’ birthrates has grown. Meanwhile, old reproductive patterns persist in Azerbaijan, Kazakhstan and Kyrgyzstan, where firstborns are usually born to parents under 30, demographers Vladimir Kozlov and Konstantin Kazenin note in a paper delivered at HSE’s XX April International Academic Conference.
More than half of school graduates in medium-sized Russian cities will change their place of residence either forever or at least for a long time. According a report on internal migration presented by HSE demographers at the XX April International Academic Conference, these people are lost to their cities.
As part of the Management session of the XX April International Conference, Carl F. Fey from Aalto University School of Business, Finland, presented his paper on Facilitating Innovation in Companies in Russia: The Role of Organizational Culture. In his talk, Professor Fey spoke about the results of three studies he has been conducting with his team.
How does digital technology affect the behavior and health of schoolchildren? What opportunities does it proved teachers and school administrators? These and other issues were discussed by participants in the plenary session ‘Children’s Wellbeing in the Digital Age’ at the XX April International Scientific Conference of HSE.
Implementing a digital analytical platform, opportunities for Big Data, and other prospects for the development of Russian statistics were discussed by participants at a plenary session of the XX April International Academic Conference.
Dr. Dorothy Espelage (University of Florida) presented a comprehensive account of her research into youth bullying spanning more than two decades in an invited paper ‘Prevention & Intervention of Youth Bullying and other Forms of Youth Aggression: Research Informed Strategies’ at the XX April International Academic Conference.
The role of regional and industrial institutions of higher education in achieving national development goals must increase, and leading universities will help them. This was the conclusion reached by participants of the plenary session on Russian higher education that took place as part of the XX April International Academic Conference.
The plenary session ‘Strategy of Russian Presence at Global Food Markets’ took place as part of HSE University’s XX April International Academic Conference, where participants discussed the prospects for Russian agricultural exports to Asia, as well as the use of nonconventional investment models, such as Islamic financial tools.
National objectives for social development, as well as existing risks and opportunities in implementing these objectives were discussed by participants of HSE International April Conference.