Panelists commentated on the role that social networks are playing in helping protest movements to emerge and grow. They make it cheaper to protest, as well as easier. But clamping down on such networks would not solve or even contain the problem - to a large extent the genie is now out of the bottle.

That "genie" is the fact that young people have grown up in a world that created expectations of lifestyle and wealth that are simply not realistic. Now we have very significant levels of young unemployed that do not have the skill sets required to work in a more realistic global economy. Governments now have to refocus on education and skill creation to help boost long-term economic growth. But the panelists agreed this may take one to two decades to achieve and, in the meantime, the social pressures will remain and hamper economic growth.

Panelists also highlighted the lack of global political leadership right now. All countries appear to be floundering equally in terms of policy response. The G-20 is more like a G-0 today. This will also have to change if solutions are to be found and implemented.

One of the major problems that political leaders need to address is the perception of inequality and lack of fairness in the world. All agreed that this is a major issue that will not easily be addressed - and not without major job creation.

The panelists also discussed the role of state capitalism and concluded that this is a defunct strategy that has now been totally discredited. Countries such as Russia need major structural reforms to attract more foreign investment.

The panel also discussed the usual pattern in resource-rich countries where the few "steal" from the many or the country borrows from its future. But, while this is the usual "default option", it may not be the case in Russia provided the county creates an improved business and investment environment from now.

AUDIENCE VOTES

People were asked to vote about which country they thought more likely to experience instability over the next two years. They voted as follows. 
- Europe: 53.7% 
- Russia: 18.6% 
- China: 14.1% 
- US: 9.0% 
- India: 5.0%

Gideon Rachman and Paul Collier disagreed because Europe has more of a solid bedrock of both democracy and wealth, and this will sustain the social fabric. China is more likely to experience instability because autocracies eventually become unsustainable as the middle class grows and becomes more demanding.

The audience was also asked to vote whether it thought capitalism and democracy are compatible. 
- Always: 37.5% 
- For the most part: 48% 
- Seldom: 12.7% 
- Never: 1.8%

Vladimir Mau reflected on the fact that, in Russia, as people take a greater role in the economy, as the economy expands and people make a greater contribution via taxes, etc, they will demand a greater say and will be much more demanding. That, he argued, is a very positive trend. The emergence of the middle class is one of the reasons for the current demands for political change, he argued.

He also said it was inevitable that closer Russian integration with Europe will take place. He said this would be good for both as Russia would benefit from adopting EU institution formats and the EU would benefit from long-term growth opportunities. He saw Russia, Germany and France at the core of the eventual cooperation.

Collier also highlighted the need for a much more engaged and informed citizenry as a prerequisite for change. His opinion was that social networks have helped that develop globally and in Russia, and it is a positive global trend.

Rachman said that counties in the developing world need to build strong institutions and improve the rule of law. That is a requirement for investment, for job creation and will go a very long way toward maintaining social stability in Russia, as elsewhere.

Nouriel Roubini reflected on the fact that the problem exists at both an international and domestic level and the latter cannot alone fix it. We need a global response that is then executed at a domestic level.

Shaukat Aziz identified the two main advantages that Russia has today as 1) very strong human capital in terms of highly educated people, and 2) a big resource base that delivers steady budget revenues. But Russia now needs to increase governance, strengthen institutions and improve the rule of law in order to bring in more capital to achieve economic diversity.

Mikhail Dmitriev reflected on the fact that so many counties, such as the BRICs, are now middle-income countries but are pushing to join the institutions now dominated by the developed rich nations, such as the World Bank and IMF. He said that the rich nations will have to make more room for middle-income countries if there is to be an effective global response to the crisis.

Raghuram Rajan, in his concluding remarks, said that the core of the current problem is a crisis in the financial sector, and this, primarily, will have to be fixed if the global social crisis is to be solved. The world cannot function and jobs cannot be created without a properly functioning global financial sector.

Speakers were unusually forthright in their criticism of state corruption and pressure on business in Russia.

Former finance Minister, Alexei Kudrin, who resigned last autumn in a row over ballooning defence spending, ruled out serving in Russia's next government and expressed sympathy with opposition protests against alleged ballot fraud in December's parliamentary election.

"The protests show that political competition and maturity are growing - that's something we need," he told an earlier panel discussion. "It's a positive sign of the times. We need to get used to the idea of opposing the powers that be."

Going further, liberal economist Sergei Guriev hit out at corruption, bloated state corporations and pressure by officials on business.

"The Russian state is not capable of solving problems - it is the problem itself," said Guriev, rector of Moscow's New Economic School.

Net capital outflows, which last year totalled $84 billion - or nearly 5 percent of gross domestic product - show that "investors believe that the Russian state has given up the fight against corruption," he added.

Kudrin joined a disparate group of opposition leaders on the stage at a large protest rally in Moscow on Dec. 24, and a further demonstration is planned for this Saturday in Moscow to call for fair elections.

"It's a good thing to see - I'm glad to see the people on the streets, glad to see that people are not accepting the overhang of corruption and lack of openness," Nobel prize-winning U.S. economist Paul Krugman told Reuters at the event.

Krugman later shared the podium with Putin, who robustly defended his achievements during 12 years in power, first as a two-term president and then as prime minister.

"We have completed the post-Soviet stage of our development," Putin said, rattling off a string of statistics to back up his case - poverty rates halved, record-low inflation, a budget surplus, low public debts and rising life expectancy.

Herman Gref, chairman of Sberbank chaired the opening panel of the forum