‘We are Leaving the Door Open’ Australian Ambassador to Russia, Paul Myler

On November 15-16, Brisbane will be hosting the next G20 summit. At a meeting with HSE students the Australian Ambassador to Russia, Paul Myler talked about prospects for improvement of the world economy and how relations between Russia and the West can be normalised.

The Brisbane summit will conclude Australia’s chairmanship of the the G20. In 2015, the reins will be handed over to Turkey. Although five years have passed since the most critical phase of the global economic crisis, we are still feeling its consequences today. Mr Myler reminded us that former growth rates have not been recovered and 62 million jobs have been lost.

In February the leading industrial nations took it upon themselves to do everything possible to increase growth in their economies above the predicted two percent for the coming year. But this year hasn’t given cause for optimism with many countries including Russia and the EU poised on the brink of recession, and the chinese economy which had been driving growth, now slowing down.

Paul Myler says this is not a time to chase statistics but to carry out crucial reforms. The G20 countries have drawn up altogether 900 measures which should make their economies more healthy, but only some of them have started to bring about change. One of the main tasks, as he sees it is to attract investment into infrastructure projects. In the global economy there are means (particularly in pension funds, which rather than real investments are lying in US government bonds), but the problem is how to use them sensibly and effectively to fund various projects. We need an influx of investment from the private sector where we need to increase business activity and the volume of trade which would in turn allow more jobs to be created.

Since the Australian currency was allowed to float freely 30 years ago, it has gone down and up many times. The floating exchange rate has not been a hindrance to economic growth.

Australia has experience of carrying out painful but necessary reforms which Russia could also learn from. Among the many steps towards liberalisation of the economic and financial systems taken in the 1980s which led to the Australian economy becoming much more robust (it’s been growing for 23 years in a row), was abandoning currency exchange rate regulation.

As Paul Myler pointed out, this is relevant for Russia.  Fluctuations in the exchange rate of the Australian dollar, like the Russian rouble depend largely on the price of minerals on world markets. Since it was allowed to float freely 30 years ago, the Australian currency has gone down and up many times ranging between 48 US cents and 1 USD to the Australian dollar.  Australian business and foreign trade partners have adjusted to these fluctuations and the floating exchange rate has not been a hindrance to economic growth.

Mr Myler supports many of the strategic decisions taken by economists in the Russian government in recent years but events in Ukraine have had a negative impact on the Russian economy.

The ambassador said that the sanctions introduced by the EU, USA, Australia and other countries against Russia were meant to be targeted and not to harm ordinary Russian citizens and small and medium-sized business. In reality however, everyone is feeling the consequences of them. The sanctions also had the knock-on effect of reducing trust in Russia as a country to do business with. The ambassador said, 'People who are thinking about where to put their investments, are not choosing Russia'.     

Paul Myler also pointed out that Russia has enough instruments of ‘soft power’ - economic and cultural links - to maintain its influence over Ukraine without resorting to military intervention.

However the West, as Ambassador Myler put it, wants to ‘Provide Russia with as many opportunities as possible for dialogue and rebuilding trust’. ‘All that we can do at the moment is to leave the door open and hope that Russia will come in,’ he said.

 Transcript of the speech by Australian Ambassador Paul Myler (DOCX, 28 Kb)

Photos by Mikhail Dmitriev