Approximately 90 students, researchers and lecturers representing six universities in Russia participated in a videoconference presentation of UNCTAD's latest Trade and Development Report (TDR), hosted by universities in Moscow and Saint Petersburg.
The TDR 2010, "Employment, Globalization and Development," reports on the budding global economic recovery, which, presenter Heiner Flassbeck, Director of UNCTAD's Division on Globalization and Development Strategies, attributed to the coordinated action among the world's major advanced and emerging economies -- the Group of Twenty (G20).
Dmitry Lyakishev, Counsellor of the Permanent Mission of the Russian Federation, and Vlasta Macku, Chief of the Virtual Institute, joined Flassbeck in the Geneva-based presentation, which was transmitted simultaneously to two Vi member universities in Russia, the Higher School of Economics in Moscow (HSE), and St. Petersburg State University of Economics and Finance (SPbSUEF).
"It's good to have a first-hand opinion from UNCTAD experts -- Heiner is one of the best -- about what is going on in the world," Lyakishev said.
"Recovery began, but it is not as smooth as hoped," Flassbeck said. "The functioning of the financial sector has not been dealt with. People are back to casino playing."
The financialization of commodity markets may lead to another bubble economy, and global imbalances have remained, he said, citing huge deficits in the U.S. and some emerging economies, and surpluses in China, Japan and Germany.
And although recovery has been largely driven by emerging economies, such as China and India -- not only with exports, but also with domestic demand -- they are not big enough to be the engine of global growth, he said.
Coping with deflation is the most important policy challenge, he added. In Japan, for example, after the bubble in the 1990s, the national consensus was to "tighten belts," causing wages to stagnate or even decrease. If household expectations are for no increase in wages and incomes, it will stall the economy. As "Japan is a relatively closed economy. If private consumption stagnates, it is a problem," Flassbeck explained.
In the U.S., the national disposable income starts to stall, and deep expenditure cuts are being discussed to reduce the deficit. "If the government stops stimulating the economy, who will?" he asked.
He said a similar situation is taking shape in Europe as the danger of deflation looms in three major regions. "This can be a danger for the entire world," he said.
He warned against cutting the current stimulus package before there is self-sustained growth, to avoid "killing" the recovery and causing a second dip in the world economy.
About 40 students, professors and researchers from HSE, the Moscow State University for Foreign Relations, and the State University of Management, joined HSE's Alexander Daniltsev, Head of the Trade Policy Research Institute, who moderated the videoconference in Moscow.
More than 50 from SPbSUEF, St. Petersburg State University, and North-West Academy of Public Administration, participated in the St. Petersburg presentation, introduced by Alexander Karlik, Vice-Rector for Scientific Affairs, and moderated by Vi member coordinator, Olga Garanina.