On the eve of the international conference, Corporate Management and Russia's Economic Growth (due on June 3-4 in Moscow), organised by the National Council for Corporate Management with the help of the World Bank (WB) and the OECD, WB President James Wolfensohn answered the questions of the Izvestia newspaper.
Mr. Wolfensohn noted he was happy to receive the invitation to this conference because he believes that this topic is truly important both for Russia's future and for the future of the entire world economy. Efficient corporate management, either private or state-run, is no less important for the citizens' welfare as efficient administration of the country, the WB president believes. The experience of work in Russia has shown that the development and maintenance of high corporate management standards is not only an uninterrupted process but it also requires serious efforts from many sides. Even with the existing laws and willingness, corporate management can be boosted if the business community is active in making these rules work. Like in the entire world, the Russian business community should play an active role in improving corporate business practice.
When asked what serious changes had taken place in Russia in the past 10-12 years, Mr. Wolfensohn said that the biggest change was the role of the private sector. Ten years ago, the IFC (International Finance Corporation) had no opportunity of investing in Russia, because there were few private companies. Today, its clients in Russia are mostly the companies owned by Russian citizens while several years ago the majority of them belonged to foreigners. Considering that only 12 years ago Russia had no idea about private property, the appearance of private companies, most often managed by shareholders and not the state, is truly notable.
By many parameters, the private sector has outdone the budget sector. The evidence is the flexibility of the private sector in solving the problems, while the budget sector is sometimes slow in adapting the relevant legislative base to reality.
Mr. Wolfensohn noted that the highest rated Russian companies today are the ones, which have high ratings on international securities markets in New York, London and Frankfurt. Similar standards of management and accounting are increasingly often applied regardless of whether the investor considers investing in Russia, the UK or Brazil. This requires responsible actions from Russian companies' shareholders in accordance with the best international standards, and will eventually yield profit to Russian consumers.
As for whether Russia's globalisation will increase its economic risks, the WB president said: no country seeking economic growth and welfare can afford to remain outside global integration into the world economy, and does not need to. In the final count, globalisation involves more advantages and positive potential than risks. Globalisation will give Russia and its companies the opportunity of successfully competing in modern world. Russia will use this opportunity and produce better cars, cheaper gas, more advanced software, and better services than it could produce in isolation.
Mr. Wolfensohn welcomes the practice when Russian experts work as chiefs of foreign companies, and when Russian businessmen hire foreigners. The key issue is not the passport of the businessman but how well he/she works. Consumers are people who can move from one country to another, they all would like to invest their efforts, time and money productively, and not to guard outdated barriers, the WB president is convinced.