Ivan Kotliarov: 'We Need Specialists Who Will Stand Up for Russia's Interests in Our Cooperation with Asian Countries'

Ivan D. Kotliarov, Associate Professor of the Department of Finance at HSE - Saint Peterburg, discusses the economic potential of countries in Asia and the Middle East, the impact of the coronavirus pandemic on the world economy, and what makes HSE - St. Petersburg so appealing to its many international students.

This is the next installment of the interview series with professors of the Master's Programme 'Business and Politics in Modern Asia'. Today we are pleased to present you Ivan D. Kotliarov, Associate Professor of the Department of Finance. Professor Kotliarov has been teaching courses in our programme since its very beginning. This year he is teaching the courses, 'Economics and Finance in Near and the Middle East' and 'Global Processes and International Economic Relationships in EEU and Eurasia'. Professor Kotliarov's lectures always garner high interest among students, which results in his regularly receiving the 'Best Teacher' annual prize as well as long lines of students asking him to serve as their thesis or term paper supervisor.

Valeria Kurtseva, a 2nd-year student of the Master's programme 'Business and Politics in Modern Asia', questioned professor Kotliarov on the current economic situation in the Middle East and South-Eastern Asia countries, the financial crisis due to the coronavirus pandemic and the reasons for Saint Petersburg being so attractive among students looking for high-quality education in eastern studies.

– In the 1960s – 1990s, the so-called Four Asian Tigers (South Korea, Singapore, Hong Kong, and Taiwan) showed high rates of economic development. Prof. Kotliarov, in your opinion, are there any Asian countries today that could similarly achieve that kind of growth?

– Today it is very difficult to talk about this because the success of these states was based on their industrialization. Japan, Taiwan, and South Korea – all these countries managed to successfully re-industrialize and intercept those industries that were withdrawn from Europe and the USA. Nowadays it’s quite difficult to make any predictions about the prospects of other countries. It is quite possible that Vietnam, Laos, and Cambodia will be able to achieve certain successes by withdrawing production from China, but I would not say this with confidence. On the other hand, new leaps of 'tigers' are possible due to the transition to a digital economy. We will see this, most likely, in the world and in the economy. It will be very interesting.

– In your opinion, in the coming years from which of the Asian countries can we expect to have an economic breakthrough? And which Asian country's economic potential is most likely to remain unrealized? And for what reasons might this happen?

– Economic potential remains unrealized most often due to poor institutions and unfavourable international conditions. Correspondingly, an economic breakthrough requires a well-thought-out domestic policy that is oriented towards economic development in addition to a favourable global economic situation. The combination of these factors can contribute to the realization of a country's potential. Withdrawal of production from China may lead to accelerated growth in the countries of Southeast Asia – not only Vietnam but also Laos and Cambodia. However, now it is difficult to make any predictions. Separately, I would like to point to the example of Pakistan, which, while it aspires to regional political leadership and has powerful armed forces, has not yet managed to build a developed economy that would correspond to its political status.

– The main driver in the development of many countries in the Middle East is oil production. What opportunities do you think these countries currently have to make their economies less dependent on natural resources?

– Let's look at the experience of the UAE; they have completely succeeded in this. Using oil revenue, they managed to build — I will not say it is 'diversified' — but quite an effective economy. It is possible that other states could use this experience as a model, spending their money not on corruption among the elites, not on encouraging consumption, but on investing in new industries and new areas of activity. On the other hand, this kind of success is difficult to replicate, as has been shown by Saudi Arabia, a large state that claims to have a significant role in the world arena. The idea is to spend oil excess profits on the development of other sectors of the economy. This will allow the country to create added value that does not depend on the state of the world commodity market. However, as with all obvious ideas, this is easier said than done. States and elites will always have incentives to direct resource rents to, let’s say, other purposes.

– Due the new coronavirus pandemic, there has been a sharp drop in the stock market. In your opinion, can a virus cause a future economic crisis?

– I get the feeling that coronavirus was made the cause of the economic crisis. The panic is clearly exaggerated, but markets and governments are not responding to the real problems; they are responding to the panic. And my unpleasant impression is that governments only increase this panic with their actions.

– Do you think the United States and China will be able to remain partners, despite the trade war between them?

– Both countries will be forced to remain partners, because if they deepen their confrontation, then, unfortunately, this risks turning into a very unpleasant conflict, including an open, even military one. Neither the United States nor China is prepared for this. The US's task now is not to crush China at all costs, but to ensure that China recognizes US leadership and accepts the rules of the game that the United States offers it. China most likely agreed to this for a while, as current agreements show. It is possible that China is now gaining a certain respite. On the other hand, in the medium term, conflict is likely to be inevitable, because we are talking about world leadership and the possibility of extracting rent from the world system of economic relations. Now the United States is extracting this rent, but China does not agree with this.

– Can any of the Asian countries take the place of China as the main US partner in the region?

– It is unlikely since it is China that is now the world's factory where a lot of goods are produced. Rather, it may be that the United States will restore its national production, that is, withdraw production from China and bring it back to the country. Some other state is not ready for this now. Perhaps India, but, frankly, the system of institutions in this country is not yet conducive to such a development.

– A lot of foreign students study at our university. Why do you think the HSE campus in St. Petersburg is appealing to them?

– HSE has a very good reputation in the international arena; HSE offers a lot of English-taught programmes, which many other universities do not do. Our university has a very wide selection of areas of study. And, in addition, St. Petersburg is attractive because it is not Moscow, after all. This is a city of a slightly different culture and with slightly different possibilities. People are most likely interested in seeing Russia not through Moscow, but through St. Petersburg.

– It is not a secret that many students try to combine study and work. As a teacher, do you consider this more likely a plus or a minus? Is it possible to start a career while you are still a student, so that before graduation you can get a certain experience, or is it better to concentrate fully on education?

– It all depends on each person, their abilities, and what they do. If a person is forced to work in order to earn their living, because they have limited financial means, and they need a diploma only in order to enter the labour market, well, it’s hard to condemn them. If a person has enough abilities to study well and at the same time receive a salary for work that corresponds to their basic education, this is wonderful and can only be encouraged. Another thing is that not all people have these resources. More often if a student gets a a job, they devote most of their time and efforts to it.

– HSE graduates work in a wide variety of fields. In terms of our programme, 'Business and Politics in countries of Asia', what career prospects do you see for our graduates?

– Now Russia is slowly turning from Europe, its traditional partners, to the East. Naturally, there will be a demand for specialists who understand the specifics of the East and the peculiarities of the interaction between Russia and the Eastern countries well, who are ready to stand up for Russia's interests in this cooperation and possess the necessary knowledge for this.

– You have repeatedly been named the best teacher of our university. What advice can you give students who plan to connect their lives with teaching in the future?

– Try to make students interested, try to engage them in the discussion. Probably, do what is interesting for yourself, and try to communicate this interest to your students. Studying at a university is a collaboration between a student and a teacher. And the quality of classes is determined not only by the work of the lecturer, but also by the active participation of the students. If they are interested, if they are motivated, then the classes will be exciting and mutually enriching not only for the students themselves but also for the teacher. And do not forget that HSE has very strong and learned students, who are very pleasant to work with. Therefore, the most important condition for having good classes is the mutual involvement of students and the teacher.

We are grateful to Valeria Kurtseva for conducting this interview.