Yaroslav Lissovolik urges developing countries to build economic integration platforms
Yaroslav Lissovolik, Senior Managing Director — Head of Research at Sberbank Investment Research, while delivering his speech as part of the 2019 Astana Economic Forum, talked about trade wars and protectionism issues. He also underlined that it also matters how a rising number of developing countries get out of the trap (middle income) as a few occasions were viewed capable of overcoming the gravity of middle income trap.
“To start on the first challenge of trade wars, I think in many such occasions you will say it is a challenge but also an opportunity. It is an opportunity to some degree because developing nations can pay more attention to building their platforms of economic integration along, and, in fact, this is precisely what we are seeing, this trend is not well documented and not commented so much. If you look at the developments of last year, indeed, what we saw was the formation of several, very important, projects in terms of regional economic integration”, Yaroslav Lissovolik said within the "Eye on emerging markets: how to ensure transition to high-income states?" session.
According to him, integration processes taking place in every part of the world can neutralize the negative effects such as protectionism, and so on. In the Eurasian Continent, he mentioned of the integration projects such as the Shanghai Cooperation Organization, BRICS+, China came up in 2017.
Other responses for developing countries to deal with protectionism is greater predictability as one of the by-products of macroeconomic policy setup.
He underlined the diversification of economies is important for developing and emerging countries, because of increasing protectionism, trade wars. He suggested for more diversified setup and underscored that for Kazakhstan and Russia it is key to diversify their economies away from oil and gas.
The speaker also called currency mismatches as a challenge, saying that one interesting paradigm is the use of national currencies by emerging markets, placed a big emphasis by countries of the Eurasian Economic Union, Russian and Kazakhstan.
“With regard to the middle income trap, there is no a silver bullet. Certainly, the industrial revolution, all of this is necessary for countries not to lap behind. But, I think there is a lot of traps not only with regard to an individual country, but the global economy as well. That means that countries need to be open, surmounting this middle income trap, this is also a necessity for overcoming the larger trap that the global economies are facing globally”, he said.
According to Chatib Basri, Director, Mandiri Institute, Former Minister of Finance, Indonesia, the South Asian region is one of the fastest growing regions in the world. He underlined the importance of promoting greater integration within a region in a bid to build the common facility to manage the recent crises.
“If you remember, the 2Q of last year, we had a financial turmoil in many emerging countries. The situation has tuned to normal now, reminding us how difficult to navigate, to continue to maintain the growth and stability of emerging markets”, he said, during a session within the 2019 AEF.
It should be noted that the Astana Economic Forum (AEF) has turned into a significant international platform discussing the issues of global economy and financial system –from world investors attraction to exchange of new ideas to set an economic agenda in Kazakhstan and worldwide. This year’s AEF entitled “Inspiring Growth: People, Cities, Economies” has brought together experts, politicians, business representatives and scientists from 74 countries. The Forum has attracted more than 710 Kazakh and foreign media representatives from 30 countries.
Adlet Seilkhanov
