Forum in the Press

Participants in The Russia Forum 2009 included approximately 1200 guests and delegates representing 625 companies from 43 different countries. Over 120 speakers comprising representatives of the federal government, the investment and business communities, political scientists, economists and industry experts participated in 20 separate panel discussions. Also included in the Forum were more than 800 meetings between companies and investors in 1:1 format.

Reporting on events at The Russia Forum were more than 300 journalists representing leading Russian and foreign media. Over the course of three days, dozens of television reports were filmed, over 100 interviews were taken, commentaries were given by expert speakers, and a series of press-briefings on the latest session topics were held. Following the Forum, approximately 700 features were released by Russian and foreign media.

“Vesti” televison: Over the next two days, Moscow will become the focus of discussions on problems in the world economy. The Russia Forum 2009 has opened in Moscow. Its participants – economists, political scientists, major investors and top managers in leading Russian and international companies – will look for avenues to overcome the economic crisis and discuss a new model of the world’s financial system.

Channel 1, “Vremya”: Just what is the global crisis – the crash of capitalism as a system, or, on the contrary, the result of global markets veering off the right path? And how do we find this “right” path? Forums like the one currently taking place in Moscow provide for unique brainstorms among the world’s economic elite looking for answers to these difficult questions. Andrew Summers, Chairman of the American Business Chamber in Moscow: “To this day, the majority of banks have no idea how many different kinds of debts and loans were created by investment securities makers. Regulation of global finance has sharply deteriorated in the past five-six years. Managers were oblivious to what was happening. New instruments were created and hidden from the public and everyone hoped for the best. But it turned out much worse.”

Business FM: Just like in Davos, Forum participants discussed what will happen in the world “after the financial bubbles have popped.” The new financial architecture and Russia’s place in it, strengthening regulation or choosing economic liberalism, Russia-specific topics such as persuading investors to return – these topics and more were addressed by Jacques Der Megreditchian, Managing Director of the Troika Dialog Group, who spoke in an interview with Business FM. “It is vital to create dialogue at an uncertain time like this. Many of the problems are global. But there are certain problems and opportunities that exist in every country. I think Russia can currently offer unique opportunities for financial and strategic investors alike.”

Business FM: Sergey Guriev, Rector of the New Economic School, commenting on The Russia Forum 2009: “The Forum is just as strong as similar events from all over the world. For one, the speakers at all the sessions are of the same caliber as the speakers at Davos, so I think the discussion will be very interesting. Of course, I’m not expecting solutions, but I am expecting deep analysis and a better understanding about what happened last year and what will happen this year, both in Russia and abroad.”

Izvestia Daily: Nouriel Roubini, Professor of Economics and sought after expert in recent times, at last decided to visit Moscow and participate in The Russia Forum 2009. According to the Professor, whereas developed countries have already recorded a drop in GDP, emerging markets are experiencing somewhat of a “hard landing,” when growth rates drop from 8-10% annually to 1-2%. The expert also expressed fear that the global recession could turn into a many-year depression if the right steps aren’t taken. In particular, he believes that governments need to address the problem of bad debts. Rather than addressing each individual mortgage and car loan, a more systemic approach is required, relieving the financial system of approximately 30% of its debt burden. However, even if things go well the crisis will not end soon. In his opinion, we are witnessing the so-called ‘L’ scenario, when a quick drop is followed by lengthy stagnation.

– Throughout this year and early next year, we will see all the signs of systemic depression, expressed in a vicious cycle: deflation – drop in demand – lower production, etc., the expert said.

Company Magazine: A “miniature Davos” was created last week in Moscow, as world-renowned economists and representatives of major Western companies together with an audience including Russian lawmakers and major entrepreneurs gathered at the World Trade Center on Krasnopresnenskaya Naberezhnaya. Naturally, participants in the three days of discussion addressed topics such as the crisis and answers to the omnipresent questions ‘What to do?’ and ‘Who’s to blame?’ that have spread beyond Russia and now plague all the world elite. One expert ruminating over the nature of the financial crisis was world-famous Peruvian economist Hernando de Soto, famous for defining capitalism as a fine-tuned mechanism of ownership rights and registration that always allows you to find out where, what, in what volume, and who the owner is. These base principles were violated by derivative instrument issues amounting to trillions of dollars. They were released without any registration whatsoever, and now it is impossible to figure out where these securities are, how many of them exist, and what they are backed with. According to Mr. de Soto, the world was flooded with “a colossal amount of toxic securities.” Expressing an even grimmer picture was Joel Kurtzman, Chairman of the Board of Directors of the Kurtzman Group, saying that financial institutions lacked even a single person who wasn’t interested in blowing financial bubbles. One of the reasons for this is that separate people within banks deal with issuing credit and exacting debt. Expanding this thought was Nassim Taleb, Professor at New York University’s Polytechnics Institute: “Capitalism envisages these bubbles, and people go along with it.” And the problem isn’t merely the mortgage sector: a wide range of securities in the world were created so as to hide risk from both investors and regulators. Therefore, when everyone blames the U.S. mortgage sector they are merely hiding from the truth. “The entire financial system right now is a pyramid of sand,” Taleb said. “The crisis revealed the wide disconnect between professionals and real life,” Richard Clarida, Global Strategic Advisor at PIMCO, said in summary.