The global economy continues its cyclical recovery. However, the recovery rate is rather slow. A number of negative factors hold back further advancement as the fundamental causes of the global financial crisis of 2008 have not been fully addressed. Uncertainty in the global financial markets, low productivity growth and investment as well as institutional problems in developing countries hamper pre-crisis levels of growth.

In the meantime, social tensions, migration flows, mostly uncontrollable, are growing. The global debt, which is already 2.3 times higher than the world GDP, keeps accumulating. These serve as a fertile ground for political populism and economic protectionism. Environmental pollution, facilitated by imbalances in global energy production and consumption, is close to its critical limit.

All of this is happening against the backdrop of massive spread of innovation and digital technologies, which create new opportunities for long term growth. The fourth industrial revolution, development of artificial intelligence and blockchain technology contribute to creation of new industries and disappearance of the old, and change the nature of economic growth.

The Astana Economic Forum - 2017 was a platform for active discussion of these issues. The discussions resulted in recommendations in the following three areas: Sustainable Economic Growth, World Trade and Infrastructure, Innovation and the "Green Economy".

Recommendations for Sustainable Economic Growth

It is evident that traditional sources of growth are no longer sufficient for many countries, which forces governments and international experts to look for new drivers of growth that will ensure long-term sustainable development.

That is why sustainable economic growth, conditions and mechanisms, specific features of different countries that need to be taken into consideration in achieving it were the overarching theme of more than half of the AEF-2017 events. As a result of these discussions, the following recommendations were developed:

  1. It is necessary to ensure macroeconomic stability through balanced fiscal policy and flexible monetary policy;
  2. It is necessary to develop new measures of national wealth and welfare. The traditional Gross Domestic Product (GDP) measure creates a false picture of economic prosperity;
  3. Promote dissemination of best practices in economic development for the advancement of a new economic model and a strategy for sustainable and "inclusive" development, which will take into consideration interests of developing countries;
  4. For a new economy to emerge it is important to develop small and medium-sized enterprises (SMEs) that aim innovations and participation in global processes. SMEs should be the main driver of national competitiveness;
  5. Introduce international settlement and payment unit, which will be backed by specific real assets;
  6. It is desirable and justified to set up a special United Nations committee aimed at achieving sustainable economic growth and improving the environment. Also it is important to consider the possibility of creating a pool of central banks with a committee, whose activities will be aimed at ensuring sustainable economic growth and improving the environment;
  7. An indispensable rule for ensuring sustainable economic growth should be the orientation on "green economy" and "environmental energy";
  8. It is necessary to achieve equal and fair representation of all countries in the development and adoption of solutions aimed at achieving sustainable economic growth. To a large extent this can be ensured by development and transformation of the G-GLOBAL system.

Recommendations for World Trade and Infrastructure

Discussions in this stream focused on the changing nature of globalization, the role of the Belt and Road Initiative and its contribution to increasing regional and international trade were discussed. Furthermore, coordination issues between the countries of the region and the WTO in creating an enabling environment for further development of international trade, issues involving all stakeholders to form a system of treaties and agreements that will avoid trade wars and reduce trade barriers were discussed.

Active discussions with participation of leading international experts and practitioners allowed the participants of this section to identify the following priorities:

First, according to many international experts, views and approaches to the existing model of globalization are changing and many of the fundamental provisions of the current model of globalization are being revised, leading to an increase in uncertainty in global economic development;

Second, uncertainty and instability in international economic relations, as well as imbalances in global trade lead to instability in the global financial and monetary system, which in turn negatively affects economic development and economic relations between countries and regional blocks;

Third, against the background of criticism of globalization and the current system of international trade, economic protectionism is growing. Some countries and regional blocs are calling for a review of existing international contractual relations that determine the free movement of goods, people and services. To increase the competitiveness of prices for their products and services, the governments of the world's largest countries periodically adjust their national currency rates. These measures lead to further deepening of existing imbalances and have a negative impact on world economic growth.

Fourth, uneven economic development in different regions of the world increases, and creates not only leaders of economic development, but also economic "outsiders" with low economic growth rates, especially among developing and transitional countries.

Following the results of these discussions, the Forum participants developed the following recommendations:

  1. To develop a mechanism for a new coordinated economic development policy in the framework of new globalization and de-globalization processes on the basis of mutually beneficial cooperation agreements and the so-called "localization" within the framework of the World Trade Organization (WTO);
  2. In order to reduce trade barriers and protectionism, as well as to enhance the effectiveness of international division of labor there is a need to develop mechanisms and instruments for consistent legal regulation of reforms of globalization institutions within the WTO and G-20, which will take into account interests of the G-77 and G-Global countries;
  3. It is necessary to develop a unified approach to changes in the world financial architecture and infrastructure, including introduction of a new world currency, and to consider introducing and expanding the use of cryptocurrency that will be truly independent of national banks and governments (it will be regulated by a pool of central banks with a specially created UN or International Monetary Fund (IMF) committee), which will reduce the risks of currency wars, currency speculation, and help reduce volatility in world markets;
  4. Consider the possibility of creating a common infrastructure that can help reduce cross-border costs, increase trade turnover and equalize the level of social and economic development of regions;
  5. Considering the plans of pairing the Nurly Zhol program, the Eurasian Economic Union, and the Belt and Road Initiative, the governments of Kazakhstan, Russia and China are encouraged to consider the possibility of building a mutually beneficial multimodal Lianyungang-Khorgos Port and Dostyk-Aktau- channel "Eurasia" - Azov-Black Sea basin (Silk Road through the Eurasia channel) transit corridor, which will increase the share of cheap water transport in Eurasian transit through the territory of Kazakhstan and Russia;
  6. To address issues pertaining to subsidies of traditional energy sources and growing global energy consumption imbalance, which adversely affect economic development processes at the global and regional levels;
  7. To consider innovative approaches to address issues of information security of world trade, including protection from cyberattacks from criminals and terrorists.

Recommendations for Innovation and the Green Economy

The development of new drivers of growth is inextricably linked and largely based on innovation and rapid technological renewal. Developed economies that managed to appreciate importance of new technologies and adapt to new realities are enjoying the Fourth Industrial Revolution.

According to Accenture, the newly invented blockchain technology will be widely used by financial institutions in 2018, and in 2025 will become omnipresent. Achievement of these results was possible due to aggressive investments, which grew by 726% over the last 2 years.

Digitalization is also one of the important conditions for the growth of official employment. Digitalization leads to a reduction of shadow economy, as it facilitates the creation of transparent business processes and leads to a reduction in costs and risks, especially for entrepreneurs. According to experts, in developed countries SMEs that use digital technologies grow 22% faster than those who do not.

Moreover, in order to ensure sustainable development, the "green economy" should become an important tool. It is an economy with high quality of life, careful and rational use of natural resources for the benefit of present and future generations. Considering importance of these issues the following recommendations were developed:

  1. It is necessary to reduce barriers that hamper development of digital technologies. First of all, this relates to state regulation in the customs sphere. Many countries have already canceled duties on certain types of technologies;
  2. Stimulate best practices in the field of sustainable urbanization, including Smart City technologies and work on their implementation in cities and settlements of Kazakhstan and the Central Asia;
  3. To introduce new energy-saving technologies and developments in all sectors of the economy, install new innovative equipment that will save fuel costs and increase efficiency. Particular attention should be given to targeted "green" investments in energy-intensive industries;
  4. In order to improve return on investments and avoid undesirable duplication, it is necessary to expand monitoring research and development efforts, intensify the exchange of achievements in this area, to increase accessibility of experimental research results;
  5. In order to increase the effectiveness of green investments there is a need to create a joint specialized "green" fund under the aegis of international organizations, financial institutions;
  6. To develop a global "Green economy" program that would involve international institutions such as the IMF, International Bank for Reconstruction and Development (IBRD). Achieve coordination of efforts in all areas, including a) solar, b) wind, hydropower, and other types;
  7. In order to pool efforts and coordinate national, sectoral programs there is a need for establishment of the World Council on Green Energy under the auspices of the United Nations. There is also a need for a global portal on green economy;
  8. In order to prepare human capital for green economy it is necessary to develop a global program that would identify basic research institutes similar to the European Organization for Nuclear Research, implement joint research projects and involve scientists and specialists from different countries. It is also necessary to train highly qualified specialists on green economy at the world’s leading universities, to expand student and scientific mobility on the basis of allocated national and international grants.