From Chinese Press

Crisis may bring about unseen economic models

(Xinhuanet.com)
Updated: 2010-06-22 10:53

The latest global crisis has created an unparalleled situation, when some obsolete industries were being removed out of the economy and the niches will be filled with some previously unseen phenomenon, Yaroslav Kuzminov, director of Moscow's High School of Economics, told Xinhua during the International Economic Forum in St. Petersburg. The recent crisis was cured entirely with the financial tools, therefore it has not actually cleared the economy off the obsolete industries, the expert said.

"I am afraid the new wave of the crisis will come in three or four years, and that wave will eventually wash the obsolete technologies away. Their niches will be filled with some previously unseen phenomenon, like, say, economy of emotions," Kuzminov forecast.

He coined the terms "economy of cultural consumerism," "economy of impressions" and "cognitive technologies" to describe the reshuffle that second wave of crisis may bring about.

"Intellectual powers will free themselves from the material production sphere and will look for new areas of usage. Otherwise, I don't see a way out of the current crisis," Kuzminov said, adding that he does not rule out the possibility that some countries of the European Union will end up being forced out of the euro zone as the crisis unfolds.

"I do not know a single period in history when there are not contradictions between the leading countries," the economist stresses, "This is why we all should try to find the far-reaching agreements, for five or ten years ahead. This improves the business confidence, eases the military-industrial rush. This is why Russia is interested in cooperation with Europe, China and other eastern Asian countries."

The expert also pointed out that nontraditional projects, cheaper bank loans and optimism are the three best tools to pull economy out of stagnation and to secure its recovery,

However, at the moment, there is only one factor of the three mentioned, namely central banks' policy of steady lowering the interest rate, he noted.

As for Russia, in search for nontraditional projects to invest into, the banks are looking for modernization programs that Russian President Dmitry Medvedev is fond of.

"Still, the government's modernization plan is not sufficient," Kuzminov admitted.

The "showroom" of Russian modernization has been Skolkovo project - the widely publicized Kremlin's attempt to create national analog of the U.S. Silicon Valley from scratch. Still, Kuzminov warned, it is senseless to expect that foreign hi-tech companies, including the Chinese firms, will run to Russia if Skolkovo remains the only special zone of the sort.

"If we will be consistent in creating of the science-industrial clusters, we have the real chances to bring up our own technological elite and to compete with the western countries as their equals," he said.

"The same chance China has, too," the expert added.