The First Moscow Financial Forum, first held on 23 September, showed a keen interest of the professional community in the most sensitive issues related to the development of Russia’s financial and economic system. More than 1,300 professionals attended the forum, including representatives of federal/local authorities and relevant government agencies, heads of Russia’s largest companies, leading economists and experts.
The plenary session “The Economic Policy: A Mid-Term View” opened the MFF business events. The panelists discussed the best-fit macroeconomic policies amid the persisting challenges in the global economy and also specific budgeting issues for the next three years. Budget balancing and deficit reduction were identified as one of the critical factors ensuring economic stability and transition to gradual growth. “We must balance the budget income and expenditure in a way to keep budgetary spendings below the amount of government revenues,” Minister of Finance Anton Siluanov underscored. Alexey Kudrin, Chairman of the Board of the Center for Strategic Research Foundation, Deputy Chairman of the Economic Council under the President of the Russian Federation, agreed with him, saying, “We ran into the quality of institutions that prevent us from feeling stability and that’s wh ere we should work hard. It is important that we want to remain a creditworthy country that lives within its means.” Arkady Dvorkovich, Deputy Prime Minister of the Russian Federation, followed up the discussion, dwelling on the issues of importance to the real economy, “The decision on returning to three-year budget planning could be viewed as a great achievement. This will help identify basic decisions, including those in the tax policy, which we’ll make in 2017—2019.” “A major impediment to implementing anti-inflationary measures is high inflation expectations of people and business,” Elvira Nabiullina, Head of the Bank of Russia, believes. “There’s a need for structural change to minimise that risk,” she added. The measures proposed by the session attendees to address budget shortfalls included a change in taxation of the oil and gas sector (substituting the the mineral extraction tax with excess profits tax and continuing the tax maneuvre that implies a reduction in export duties and a rise in internal taxation in the oil and gas industry), introduction of a mandatory norm for paying at least 50% of net profits derived by state-owned companies in the form of dividends, creation of accumulating mechanisms to fund pensions, and tax burden redistribution from payroll funds to other taxable sections. Moscow Mayor Sergey Sobyanin said that the main drivers of economic growth were large cities concentrating considerable investment resources and technology potential. It is cities that form human capital, the most valuable asset in postindustrial economy. “Labour productivity in cities is 4 times higher than in small human settlements and the return on investment is 10 times higher,” he said. All the attendees agreed that, given the existing economic growth potential, specific well-thought-out steps were necessary to involve the available resources in investment processes.
The attendees of the second plenary session discussed the relevant issues of technological development and how technologies affect the financial landscape. While discussing the theme “How new information technologies form key financial institutions”, they looked for solutions that would enable conventional financial institutions to adjust to a new technological reality. Thus, Giancarlo Bruno, member of the Executive Committee of the World Economic Forum, said that, according to the WEF data, FinTech was likely to transform the industry already in 2—3 years rather than in 5—10 years as per earlier assumptions. Not only business, but also the state will be affected by such changes. “Regulatory authorities must adjust their policies with regard to understanding not only risks, but also the opportunities offered by financial technologies,” Bruno underscored. “Innovations will help not only companies, but also government agencies optimise their budgets “. Tatiana Nesterenko, First Deputy Minister of Finance, said that at the moment more than trillion roubles were spent annually to support the state financial system. It is important in the near future to fully abandon paperwork and unify the electronic document completion rules to release up to 40% of resources. Tatiana Nesterenko also underscored the importance of creating a state cloud, a universal database of government authorities. She confirmed the creation of cells of the RF Ministry of Finance and subordinate structures. Mikhail Mishustin, Head of the Federal Tax Service of Russia, said the FTS is one of the few services in the world that managed to collect all input data in a single point. “Today the tax service has more than 21 million clients using tailored solutions via their personal accounts,” he said. The keynote of the session was a remark by PwC partner Tim Klau that “technology is an important weapon and if you want to win you have to participate in this arms race”. German Gref, Chairman of the Board of PJSC Sberbank, agreed with him, having noted that in order to win, you’d have to accumulate more data and suggest the most customised solution.
The thematic part of the business programme was focused on the issues of building a new architecture of the credit rating market, improving state and municipal fiscal control mechanisms, customs legal environment, budgetary law innovations, enhancing the efficiency of social support for vulnerable groups, combatting grey economy, enhancing the efficiency of regional tax policies, and optimising inter-budgetary relations. Experts and businessmen discussed the problems of withdrawing the alcohol market from the shadow, enhancing the efficiency of public services rendering, and prospects for development of the national debt market. The attendees and guests of the Forum were especially interested in discussions dealing with a development strategy for the defined contribution pension system and taxation innovations in the oil and gas industry.
The Forum programme also included awarding the best professionals and practices in the financial segment of the Russian economy. Representatives of the country’s main financial department awarded their fellow-professionals for achievements in 9 nominations, including “Young Professionals”, “High Quality of Management of Regional Finances” and “The Best Practice of Financial Management”.
Besides, an exhibition was arranged at the MFF site, which featured the leading Russian and foreign financial institutions. The exponents included, in particular, the Russian Ministry of Finance, Moscow Government, VTB Bank, RFNC-VNIIEF (Rosatom State Corporation), Innopolis (AK BARS Bank), Self-Regulating Organisation “National Association of Non-governmental Pension Funds”, JSC Deloitte & Touche CIS, Gokhran of Russia (State Depository for Precious Metals), JSC Goznak (State Administration for the Issue of Bank Notes), PwC in Russia, Alliance of Pension Funds (ANPF), PJSC Sovkombank, RPA Krista, OTR (Organisational and Technology Solutions), Minfin’s Project for Improving Financial Literacy, FC Group, Budget magazine, BFT (Budgetary and Financial Technologies), Skolkovo Foundation, financial institutions of the Orenburg Region and the Finance Department of the Tomsk region.
The MFF’s outcomes showed that the Forum format was in demand and offered the highest intercommunication opportunities to the professional and expert community, public authorities and businessmen. According to the organisers, the Moscow Financial Forum will become an annual event timed to coincide with the Financier’s Day and the federal budgeting period, which fall on the first half of September.