In the first of a series of blogs from the Troika Dialog Investment Forum in Moscow, the impact of social networks on Russia's political outlook is discussed.
In the first of a series of blogs from the Troika Dialog Investment Forum in Moscow, the impact of social networks on Russia’s political outlook is discussed.
Easier and cheaper communication via social networks has facilitated the rapid spread of protest movements, but the underlying cause of unrest is a failure of expectations and a loss of hope, especially among young people, the conference heard.
Fixing that problem will take many years and will for a long time sustain the uncertainty that has affected global markets. Harsh clampdowns will not solve or even contain the problem: the genie is now out of the bottle. That “genie” is the fact that young people everywhere have grown up in a world that created unrealistic expectations of lifestyle and wealth.
There are now significant levels of young unemployed who do not have the skill sets required to work in a global economy. Governments have to refocus on education and skill creation to help boost long-term economic growth. Panelists at the Forum agreed this may take decades to achieve and in the meantime, social pressures will remain and hamper economic growth.
Panelists also highlighted the lack of global political leadership. All countries appear to be floundering in terms of policy response. One of the major problems political leaders need to address is the widespread perception among populations of inequality and lack of fairness in the world. All agreed this is a major issue that will not be addressed without job creation.
Discussion also covered the role of state capitalism, and concluded this defunct strategy has been totally discredited. Countries such as Russia need major structural reforms to attract more foreign investment. The usual pattern in resource-rich countries where the few “steal” from the many, or the country borrows from its future, is no longer acceptable. Russia at least needs to attract foreign investment and improve its business environment.
Delegates were asked to identity where they thought instability might occur over the next two years. The result was Europe 53.7%, Russia 18.6%, China 14.1%, US 9% and India 5%. However, some believed Europe has a bedrock of both democracy and wealth which will sustain its social fabric, and China is more likely to experience instability because autocracies eventually become unsustainable as the middle class grows and becomes more demanding.