Positive Changes Already Felt from Russia's WTO Membership

Host Ric Young talks with Sergei Sutyrin, Doctor of Economic Sciences and head of the Department of World Economy at St. Petersburg State University, about the long term effects on the Russian economy:

Sutyrin says that the Russian economy is already feeling the effects of the change, having participated in dozens of conferences where business leaders are meeting to talk over new opportunities. He also believes that, as the business climate in Russia improves, more Russian youth will stay in the country instead of leaving for other economic opportunities.

November marks symbolic date which is very important for Russia. It's the first 100 days of Russian membership in the WTO. Our guest is Sergei Sutyrin, he's a doctor of economic sciences and the head of Department of World Economy at Saint Petersburg's State University.

First of all, this is a symbolic day for Russia. It has taken so long for Russia to enter the WTO. What does that mean symbolically? How is it going to level the filed for businesses coming into Russia and Russian businesses working with other partners?

First of all, let me tell me that I don't feel that symbol there is so significant. In practical sense, this is just yet another day. Anyhow, talking about this leveling, I consider it to be one of the most substantial impacts. Of course, it won't happen just immediately. It might help to support a trend towards leveling which is by all means present in both international community and Russian business environment.

But, overall, now foreign investor can look at Russia in a long term and pretty much know what they're going to get.

The respective WTO has three main reasons to believe that nowadays inflows might expand. First of all, this is something you mentioned – the fact that business environment nowadays is a little bit more transparent and predictable. Of course, this is not a matter of change from white to black. On the other hand, that's certainly substantial. The next thing I'd like to mention is direct impact of liberalization of trade and services. Russia basically liberalized a little bit less than 120 subsectors in trade and services out of 160, notified by the WTO. As we all know, the so-called commercial presence is the main mode of delivery of services in the system of international trade. That's basically about establishing some subsidiaries in the consuming campus. That's supposed to help. The third reason is more substantial protection of intellectual rights, according to the agreements which is yet another pillar of WTO legislation.

But overall now, how soon do you think the Russian economy will feel the impact of being the member of WTO?

Let me tell you that in a way we already feel it. I just personally participated in more than 20 different conferences organized by representatives of our business communities. Now finally they realized that we're members of the club. What does it mean to us? What should we do in order to adjust our strategies, tactics in line with requirements of WTO? That's already happening. And business communities start to question themselves, what should they do. On the other hand, implementation period of liberalization is substantial, up to basically 8 years. We have some timeframe in front of us. And that might help our companies to adjust their performance in line with new reality. So we have all types of impacts, medium-term impacts, long-term impacts as well. I believe they are relevant not only to Russian business communities, but also for foreign business people. Basically, again, I personally witness that large numbers of business associations in different countries, mainly in Western Europe – these are the people, for whom I communicate. They also organized a large number of seminars and they all take Russian membership in WTO as something really serious and significant, either from the point of view of additional threats or in terms of additional opportunities, in most cases – probably both.

Do you think that eventually Russia's membership in WTO will lead to most Russian young people staying as opposed to leaving for what many believe better situations in other countries? Will the business climate improve to the point, where the young people will stay?

In that sense, I'm an optimist and basically I interact with a certain number of young guys who graduated from our institute. Nowadays they're very active in terms of business operations. Some of them run large corporations in various sectors of Russian economy. In most cases, they feel positive feelings in regards with Russian accession to WTO.

So overall, though, one of the long-lasting effects of WTO accession will hopefully be that young people will stay at home which is due to help build vibrant business environment.

In a way, yes. At the same time, being accommodated in Russia they're interested in expanding operations beyond national borders. From that perspective, WTO accession is good news for them.