ArmInfo. A plenary session, "Maintaining the High Ground: Economic Policy Priorities in the New Cycle," was held in Astana as part of the Eurasian Fund for Stabilization and Development (EFSD) International Economic Conference, "Towards Balanced Economic Development."
According to the EFSD press service, the meeting participants discussed the main challenges facing countries in ensuring balanced and sustainable economic growth.
"The most important slide presented by Indermit Gill was: middle-income countries have accumulated a lot of capital, its level is quite close to that of advanced countries, but we are using it inefficiently. This means that the market does not yet allow for the effective management of resources, and one of the key answers here is to improve the conditions for private sector development and competition in particular. How to ensure this, and which approaches and tools to choose, remain to be seen. "Policy must be tailored to each country, because we are all different: we have different economic structures, different labor markets, different human capital," noted Sergey Ulatov, Chief Economist at the EFSD, who moderated the event.
The discussion included Indermit Gill, Visiting Fellow at the Hoover Institution; Brian Pinto, former Senior Advisor at the World Bank; Natalia Orlova, Chief Economist at Alfa-Bank; and Vitaly Tutushkin, Deputy Chairman of the National Bank of the Republic of Kazakhstan.
Participants discussed how to combine support for economic growth with fiscal consolidation and inflation containment, how to improve the efficiency of public spending on infrastructure and social programs while maintaining budget sustainability, and how to manage structural shifts—the reorientation of trade and logistics and the risks of technological backwardness.
"In middle-income countries, labor productivity is only 20% of the US level, despite having about 70% of the level of rich countries. This indicates that available resources are not being used efficiently. This problem exists in both Kazakhstan and Russia. Capital accumulation and educational development take time, while improving resource efficiency can be done more quickly. This is precisely what will help countries escape the middle-income trap," noted Hoover Institution fellow Indermit Gill.
The Eurasian Fund for Stabilization and Development (EFSD) is a $9.8 billion regional financial mechanism established in 2009 by the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. The EFSD's key mandate is to promote economic and financial stability in its member states and support their sustainable development. The EFSD is an integral part of the global financial safety net and its regional element for Eurasia.
