2014. vol. 9. No. 1

Sven Biscop – PhD, Director, Europe in the World Programme, The Royal Institute for International Relations Egmont; 69, Rue de Namur, 691000, Brussels, Belgium; E-mail: s.biscop@egmontinstitute.be

Although the European Union members possess significant collective economic power, military capabilities and are the leading powers in shaping the world’s public opinion, the EU absolute weight in world politics remains weak. The article addresses the issues which contain the European potential as an influential strategic actor in international relations. Drawing parallels between the traditional fairy tale cliché and the reality of the European foreign policymaking the author discloses and analyses the “seven fallacies” that stop the Europeans from being the international player that collectively they could be. The author argues that the lack of unity, sense of purpose for a resolute and sustained action to uphold common values, the absence of a strategic dialogue and a resolute and clear common foreign policy strategy diminishes the European Union’s prospects of becoming an influential international power. Institutional aspects of the EU foreign policy initiatives play a key role in this process as well. The author also criticizes the existing model of the EU relations with other countries – both with traditional NATO allies, and foreign aid recipients or partner-states. Realizing and overcoming these fallacies is therefore a first priority of the European foreign policy. It is of vital importance that the EU members don’t hesitate to take collective actions and defend common interests. The first step on a path to overcoming the fallacies is to launch a strategic debate aimed at defining a common EU foreign policy strategy. Despite the shortcomings of the EU foreign policy, the author states that there is no reason for pessimism – European governments’ pragmatism will not allow the long-term integration trend to break off. Sooner or later the member-states’ interests in such areas as foreign policy, security and defense will be harmonized. 

Several euro area countries must implement substantial fiscal consolidation to put public finances back on a sustainable path. Although this required consolidation will improve long-run output prospects, in the short run, the impact on activity is likely to be negative. Simultaneously implementing structural reforms to raise growth could be one way to help mitigate the short-run negative impact on GDP. This paper uses the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) to provide some estimates of how effective structural reforms might be in softening the near-term contractionary effects of euro area fiscal consolidation. For the analysis, the euro area is divided into two regions, one with acute fiscal sustainability issues, referred to as the periphery, and one with less acute sustainability issues, referred as the core. The magnitudes and the timing of the required consolidation are stylized, but loosely based on the consolidations contained in the April 2013 World Economic Outlook. Although the macroeconomic impacts of consolidations in the two regions that are achieved by reducing transfers are presented, it is highly unlikely that the consolidations can be achieved in such a growth-friendly fashion. Therefore, results are also presented for consolidations of identical magnitudes that are achieved by using a mix of public absorption expenditure (30 percent), consumption taxes (30 percent), labor income taxes (30 percent) and capital income taxes (10 percent). This more plausible mix of fiscal instruments reduces GDP below its reconsolidation level in both the periphery and core for an extended period. GIMF is then used to estimate the scope for offsetting that impact on activity through implementing wide-ranging structural reforms. The GIMF analysis relies on OECD estimates of the distance from best practice in product and labor market polices in each euro area country along with estimates of the impact on productivity and employment of closing those gaps. The impact on output is estimated under two alternative assumptions about how much of the best-practice gap is closed, a lower bound of 25 percent and an upper bound of 75 percent. The results suggest that for the core, it is quite feasible that structural reforms can offset even the near-term negative impact of consolidation on activity. However, for the periphery, even under the case where 75 percent of the best-practice gap is closed, it takes several years before GDP is restored to its pre-consolidation level. In the medium and longer term, however, the estimates suggests that structural reforms can make a substantial contribution to raising output in both the core and periphery. 

Elizaveta A. Safonkina - Researcher at the Research Center for International Development Assistance of the International Organisations Research Institute, National Research University Higher School of Economics; 20 Myasnitskaya, 10100, Moscow, Russia; E-mail: esafonkina@hse.ru

The Asia-Pacific Economic Cooperation forum (APEC) is one of the key platforms of the multilateral dialogue on global agenda issues in the Asia-Pacific region. Notwithstanding its regional character, the annual APEC leaders` summits significance is comparable with that of the key global governance institutions, such as the G8 and G20, summits. With increasing integration and enhanced economic relationships as well as established interaction pattern the APEC influence on regional and global economic agenda is growing. In spite of the fact that APEC initially positioned itself as a “free group of economics” not a political association, the member states step-by-step turn to the most acute worldwide political issues, which is reflected in the leaders` statements made during the summit. The analysis of the APEC 2013 summit which was held within the Indonesian presidency on 7-8 October 2013 on Bali provides an insight into the main drivers of the APEC agenda. Given that currently all countries face similar economic and social challenges: low and stalling economic growth, need to pursue fiscal consolidation, persistent structural unemployment, widening income disparities, base erosion and profit shifting as well as tax evasion, climate change negative consequences etc, it`s useful to analyze the measures implemented at the regional level (APEC), as well as the global level (G20). A comparison with the G20 is largely determined shared challenges and by the intersecting memberships: almost half of the members of the institutions participate in both fora, namely Australia, Canada, China, Indonesia, Japan, Mexico, Republic of Korea, Russia and the United States. The recent APEC and G20 agendas aim to coordinate actions to resolve the shared problems and move towards new growth models. The analysis is based on the key summit documents - Bali Declaration “Resilient Asia-Pacific, Engine of Global Growth”, Joint Ministerial Statement, leaders` statements and accompanying documents. The analysis permits to identify the vector of APEC agenda development. 

Irina Mamrova - Researcher at the Institute of World Economy and International Relations, 23, Profsojuznaja St.,  117997, Moscow, Russian Federation; E-mail: imamrova@mail.ru

Sébastien Cochard - Member of the Expert Council for Russia’s G20 Presidency, Professor at the Russian Presidential Academy for National Economy and Public Administration, 82, Vernadskogo av., 119571, Moscow, Russian Federation; E-mail: sebastien.cochard@ensae.org

In the wake of the Lehman meltdown, the need for global coordination in order to contain the financial crisis gave way to the institution of the G20, the most efficient forum of global governance up to now. Relying on the Financial Stability Board as its permanent secretariat for financial regulation issues (the FSB itself coordinating the works of the Standards Setting Bodies -among them notably the Basel Committee and IOSCO), the G20 was able to deliver important pieces of regulatory coordination deemed to increase the resilience of global banks and to reduce the vulnerabilities affecting the global financial system.

Five years down the road, however, it appears more and more clearly that even the most achieved sets of reform which came out from the post-2008 voluntary governance processes are presenting unintended consequences, due to the inconsistencies in the domestic transpositions of the globally agreed principles, to the risk of fragmentation of global finance that they can induce and finally due to their counter-productive extra-territorial effects. These unintended effects are indeed creating significant costs and major uncertainties which appear difficult to resolve in the current non-binding framework of the global coordination on financial reform.

While some voices are seizing the occasion for calling for the need of a “regulatory pause”, it appears on the contrary to the authors of this article that the momentum should be kept and that the global coordination process should be reinforced by conferring it international legal powers. The commonly agreed principles for financial regulation should become binding in their transposition, which could be provided by an International Treaty on financial regulation adopted by G20 Members. This new legal framework would be accompanied by the creation of an arbitrage procedure and the application of potential sanctions.

Global financial regulation is now at a crossroads: the current arrangements of the global coordination can be partially fixed, but the damaging unintended consequences brought by these voluntary non-binding agreements would in this case persist. It is therefore up to the G20 Members to make the choice between either renouncing to an efficient reform of global finance (which was the original motive which put them together in 2008), or either renouncing to a piece of their sovereignty by adopting a Treaty which would put in common (through the FSB and the SSBs, but in a binding manner) the task to elaborate part of their financial regulatory processes.

Dmitry Didenko – PhD in History, Senior Analyst with the State corporation «Bank for Development and Foreign Economic Affairs (‘Vnesheconombank’)», 9, Academik Sakharov Av., 107996, Moscow, Russian Federation; E-mail: ddidenko@bloomberg.net

Based on the data provided by the international organisations (UNCTAD, UNESCO, OECD) and by the Bank of Russia the author explores competitiveness of Russian knowledge-intensive production in the service sector. As the theoretical basis the author applies the concept of creative economy which emerged in the process of academic discussions [Howkins, 2011; Florida, 2007] and joint efforts by the international organisations (WIPO, WTO, UNDP, UNESCO, UNCTAD). For assessment of realised competitiveness the author utilises a set of relative indicators widely used in the literature: 1) trade coverage of imports by exports; 2) net export coefficient; 3) coefficient of revealed comparative advantages – Balassa index.

The conclusions are the following:

– On the global services market Russian economic agents are more likely to demonstrate enhanced knowledge intensity and competitiveness comparing to the merchandise sector.

– Similar to the merchandise sector, Russian economic agents tend to expose their propensity rather to import products of the creative industries than to export them.

– Relatively high volume of accumulated human capital presumes a significant potential of competitiveness for Russian knowledge economy.

– The data from the Bank of Russia, as well as from the UNCTAD, show an increase in knowledge intensity of the Russian foreign trade in services and the trend towards their competitiveness improvement. However, unlike the data on the core group of creative services from the UNCTAD, the data on their extended group from the Bank of Russia result in lower values of competitiveness indicators.

– Russian educational services competitiveness is price-based, rather than quality-based, with a persistent dependency on the Soviet-era experience.

– The prospective areas for Russian knowledge-intensive services are in research and development; in advertising, market research, and public opinion polling; engineering and technical services; as well as computer and information services. The markets in the CIS countries and, to a lesser extent, those in Eastern Europe, are expected to be the most promising in these fields. India and China besides the CIS countries are supposed to become prospective markets for educational services.

Anna Gutnikova – PhD, Director of Institute of Legal Regulation, National Research University Higher School of Economics; 20, Myasnitskaya, 101000 Moscow, Russian Federation; E-mail: anna_gutnikova@mail.ru.

Elena Nasybulina – Senior Researcher, National Contact Centre for International Mobility of Researchers, Centre of International Projects ISSEK, National Research University Higher School of Economics; 20, Myasnitskaya, 101000 Moscow, Russian Federation; E-mail: enasybulina@hse.ru.

Anna Pikalova – PhD, Director of the Centre of International Projects ISSEK, National Research University Higher School of Economics; 20, Myasnitskaya, 101000 Moscow, Russian Federation; E-mail: apikalova@hse.ru.

The European Union is the Russian Federation strategic partner in a wide range of social, economic, educational, cultural, and other fields including science and technology. Institutional and legal base shaped over the last decade generated invaluable experience and opportunities for harmonization of mutual interests, directions, goals and tasks of cooperation as well as instruments to achieve practical results. Up-to-date well-coordinated procedures and smoothly running approaches to cooperation establish a solid foundation for further Russia-EU interaction in the sphere of education, science, technology and innovation.

2014 will open a new phase of partnership between Russia and the European Union with launching of new large-scale national programmes such as the Federal Targeted Programme “Research and Development on Priority Fields of Science and Technology Complex of Russia 2014–2020” under the State Programme of the Russian Federation “Development of Science and Technology” (2013–2020), and the Framework Programme of the European Community for Research and Innovation “Horizon 2020” (2014–2020). Highlighting a very positive dynamics of science and technology cooperation Russia, the European Union, and EU Member States enjoy, the authors emphasize the necessity for reinforcement of coordination in applying concerted financial instruments in the field of international research and innovation within the framework of the new programmes, projects and initiatives. In this context adaptation of existing cooperative models, and development and application of advanced principles and methods for equitable partnership in science, technology and innovation is very important.

The article analyses cooperation between Russia and the European Union in implementing research and technological policy. The authors explore the institutional and legal basis of the bilateral partnership, the experience of implementing joint projects within the financial framework and the opportunities the new institutional basis contain for deeper engagement of the parties within research and innovation. The article concludes with recommendations for the cooperation enhancement.

Alexey Gusev – PhD, director for public sector programs at Moscow School of Management Skolkovo, expert in the fields of sociology of education and universities’ strategic development; 100, Novaya ul., 143025, Skolkovo village, Odintsovsky District, Moscow Region, Russian Federation. E-mail: alexey_gusev@skolkovo.ru.

Kristina Kashfullina – specialist in modern history of Korean peninsula, research associate at League of Creative Minds, California, USA; 700 Airport Blvd, 94010, Burlingame, CA, USA; E-mail: Kristina.kashfullina@gmail.com.

Konstantin Nasonov – manager for executive programs development, expert in the field of strategic management and organizational behavior at Moscow School of Management Skolkovo; 100, Novaya ul., 143025, Skolkovo village, Odintsovsky District, Moscow Region, Russian Federation; E-mail: Konstantin_nasonov@skolkovo.ru.

This paper explores the history of higher education reforms in China and South Korea. The East Asian educational systems achievements are noted by many specialists and displayed in various quantitative parameters and rankings. The road that the East Asian universities passed during the last decades is very impressive. That’s the reason why these particular countries – China and South Korea were selected as examples of successful modernization. In the analysis of educational transformations within the broader socio-economic context the authors introduce the notion of “consistency of reforms”. This term illustrates the degree to which different governmental initiatives match each other, alignment of different elements of social policy. The paper is structure in three parts. The first section examines the experience of China and South Korea through the lens of federal-level regulations (macro-level). National historical conditions, with a focusing on the education systems structure and formats, which preceded the “globalization breakthrough” are described in details. The section explores the sequence of the governments’ decisions which led to the current flexibility, openness and competitiveness of the Chinese and Korean higher education. The second section analyzes the same countries’ experience at the micro-level: the curriculum and the strategic management of universities modernization. The organizational behavior and faculty relations are also in the focus of second section analysis. In conclusion the authors make an assumption that one of the key success factors of the Chinese and Korean universities modernization was the “consistency of reforms”. A number of policy-related patterns are structured into a comparative table as evidence to this thesis.  

Irina Lazutina – Researcher of Center for International comparative studies of the International Organisations Research Institute, National Research University Higher School of Economics; 20, Myasnitskaya, 101000 Moscow, Russian Federation; E-mail: ILazutina@hse.ru.

Russian strategic documents highlight the significance of international cooperation for Russian education and science development. The effectiveness of such cooperation is determined by country's activities and resources that correspond to priorities and possess sufficient potential for achieving purposes.

The presented article explores the agreements Russia with other countries and  instruments of the international cooperation in the field of Education and Science. The author of the paper examines how bilateral and multilateral international agreements (including documents of international organizations and associations) and instruments contribute to the achievement of strategic objectives such as the improvement of research and education quality, the development of Russian education export.

The author uses the database of international agreements formed in July 2013 in the framework of joint project of the International Organizations Research Institute and the National Training Foundation.

The results of the analyses show that international agreements in the field of science and education do not fully comply with the country's priorities. In addition, a number of key areas of cooperation need to provide the tools for the development of partnership. It  is necessary to create coordination mechanism (national strategy of international cooperation in the field of science and education), which will contribute to the harmonization of goals and actions of the country's international cooperation.