Reforms by means of compromise

The government recently demonstrated that it still lacks ideas and needs progressive opinions. Iskander Khisamov, the president of the Reformists Club, mentioned this during a joint meeting of the Ukrainian organization Reformists Club and the Russian organization Business Russia. The leading experts from Ukraine and Russia decided to combine their efforts in order to help state structures “listen” to business.

Before Entrepreneur Day [September 7], over 40 representatives of the Reformists Club and Business Russia signed an agreement on cooperation to elaborate common plans. According to the head of Business Russia Boris Titov, the style of doing business in both Ukraine and Russia is very similar. At the same time, according to the expert, our countries’ economic structures are different. “Russia, a country that has immense raw material resources, in particular oil and gas, has an important ‘airbag,’ which deprives the government of the incentive to work hard in order to improve the investment climate,” explained Titov.

Meanwhile, the president of the Center for Economic Development Oleksandr Paskhaver believes that in Ukraine the main challenge for reforms is that they are carried out by the bureaucracy. “Our state departments are transformed by the officials of these agencies. As a result, good ideas are brought to nothing by bureaucrats of various levels,” stated Paskhaver. In the opinion of the economist, leading experts and think tanks should coordinate reforms on a commercial basis. Only this way will the state avoid conflicts of interests between reformers and officials. Corruption is another factor that hinders progress regarding the domestic investment climate. No regulatory reform is possible without fighting against the corruption, businesspeople argue.

Experts consider the experience of economic reforms in China, India, and Kazakhstan as interesting examples that can be followed. “We need to realize that both Ukraine and Russia are still in their pre-industrial phase of development. While China creates ten million new jobs a year, and Brazil creates 2.5 million jobs, Russia and Ukraine create less than one hundred thousand. We need an anticipatory creation of new jobs, this is an essence of the modernization process,” said member of Business Russia and managing partner of Strategy Partners, LLC Aleksandr Idrisov. For that, according to the businessman, it is necessary to attract a huge amount of investments.

The businessmen mentioned the availability of infrastructure, clear rules and taxes stimulating business activity among the advantages that can attract serious investors. However, we should stimulate innovations and modernization together with improving the investment climate, highlighted the vice president of Business Russia Aleksandr Galushka. “Otherwise these innovations will work for the benefit of another country,” the expert believes.

A member of the general council of Business Russia, the Russian State Duma deputy Viktor Zubarev, agrees with his colleague. He is confident that today’s problem in both Russia and Ukraine lies not so much in the lack of innovative solutions, but in the lack of demand for them. “The progressive products that are available have no adequate demand and use in our country, there is no clear mechanism for their implementation. As a result, progressive ideas and solutions are used abroad and increase the competitiveness of other countries,” complained Zubarev.