Russia is an important global player in global power game. Every move from
USA and Western countries to isolate it, is backfired. The sanctions imposed by
USA and western countries affected more to European countries than Russia.
America now is trying to get help from India but the fact is that India is
strategically of USA yet it has good relations with Russia. The recent St
Petersburg Economic Forum 2023 in Russia was a big success for Russia and proved
that the efforts to isolate Russia could get desired results. Russia has many
cards to play some of them has already shown while others are in its hands.
St Petersburg International Economic Forum 2023 was held in Russia from 14 to
17th June,2023. The session of forum was a big success for Russia. It was
attended by 14,000 people from 131 countries including Russia. About 17,000
Business Leaders, more than 130 foreign ranking officials, 85 Russian regions,
80 of which were represented by heads of federal subjects were among those who
participated in this forum session. More than 60 representatives of federal
executives and legislatives bodies of the Russian Federation were present. Also,
there were 3,500 media representatives from 33 countries. SPIEF 2022 played host
to 214 business events, the discussions were attended by 1.500 moderators,
speakers and Russian and International experts.
There were 695 agreements signed of immense importance which have a worth of ROB
5,560 billion. It is interesting to note that 150 companies from unfriendly
countries that have placed sanctions both physical and online, have also
participated in this forum. The largest delegations were from UAE over 500
participants, with other significant attendees being from the United States 200,
China 147, and India 58. Roscongress the organizers stated that about 900
investment agreements worth about US$ 47.6 billion had been signed 43 agreements
were signed between Russian and Foreign businesses, including deals involving
companies from Italy and Spain.
St Petersburg International Forum is one of the world’s key business events that
has been held since 1997. The forum had cemented its status as leading
international event focusing on key issues on the global economic agenda. It
provides a platform for participants to exchange best practices and expertise in
the interest of sustainable development. St Petersburg International Economic
Forum is an annual Russian business event for the economic sector, which under
the visionary and committed leadership of Vladimir Putin became a global focus.
The Forum brings together the Chief Executives of major Russian and
international companies, heads of the states, political leaders, prime
ministers, deputy prime ministers, departmental ministers and governors. This is
one of the biggest business and economic events of the world.
The key objectives of the forum are to provide practical solutions for business,
bringing them together, networking them in a way to enable them to get their
business objectives, enhancing trade and investment, boosting economic ties, the
forum is considered a big success for Russia to open its economy and create
awareness among world’s business and political leaders about immense
opportunities of doing business with Russia. It intended for Russia to attract
Foreign Direct investment (FDI), discuss economic policy and project a global
image that Russia is open for business and investment. The St Petersburg
International Economic Forum is described as “Russian Davos”, the Russian
Analogue of the World Economic Forum that is usually held in Davos, Switzerland.
In 2022 countries from across the world attended this forum including China,
India, Turkiye, Iran, Egypt, United Arab Emirates, Serbia, Belarus, Armenia,
Kazakhstan, Cuba, Afghanistan and others. This was too a big success and the
number of participant countries, delegations, business leaders and politicians
who participated in it increased phenomenally.
One important factor of interest in this forum was participants of SMEs. In
Russia SMEs have been given due importance and Since July, 2022 to May 2023
Russian SMEs increased from 5.66 million to 6.25 million. SMEs account for 37%
of total turnover and 401% of employment in Russia.
One another significance of the event was President Vladimir Putin’s address in
which he highlighted the success of stories and stressed business people to do
business and invest in Russia without fear as Russian government would
facilitate them in every possible way.
Russian economy has continued to grow, with GDP rising to 3.3 % in April,2023.
Positive dynamics were also projected for the future, with Russia’s overall
economic growth expected to reach 2% this year. That is double projected US
growth, while EU has now technically entered recession. The government will
continue working to reduce inflation, which at 2.2% is already close to a
historic low. This figure is also significantly lower than in many western
countries. Unemployment in Russia is also an all time low of 3.3%. The Russian
government has apparently managed to prevent a destabilization of prices despite
the Western sanctions pressure, thanks to its use of budget mechanisms and
monetary instruments. Russian lenders have invested actively, while their
capital bases have successfully passed strength tests. In 2022, lending to
business grew 14.3 % while consumer lending increased 9.5% increased 9.5%.
Mortgage loan growth has also been brisk. Reflecting on this, Russian President
Putin stated during SPIEF that, “We will continue building macroeconomic policy
based on the actual situation and beating the inflation target in mind – just as
we did last year and during the pandemic, when demand dropped in the economy.
Putin stated that, “Our overall exports last year reached US$ 592 billion in
value, with non-raw material, non-energy accounting for nearly one third of this
US$ 188 billion, “The Russian economy is gradually shifting away from energy.
Putin said that the non-energy sector means 6.4 million jobs and 2.2 trillion
Ruble or US$ 26 billion Western sanctions are swiftly being replaced by local
ones, in fiscal tax revenues to our national consolidated budget.
Foreign companies that left Russia due to Western sanctions are swiftly being
replaced by local ones. Their exit opened up 2 trillion or US$ 23.8 billion
worth of niche markets. The exodus of multinationals is believed to have been of
benefit, as it has encouraged domestic businesses to grow and expand. Putin also
noted that “ Many foreign brands have long been selling products that are fully
produced at our facilities ( such as McDonalds and Coca-Cola amongst many
others) . In fact, these are Russian goods, only foreign logos. So, their
production did not stop with the departure of the brand owners. Only the logo
changed. The profits from these businesses now reman in our country. As a case
in point, all 900 McDonalds restaurants were rebranded as “Tasty DoT” with all
reopening under the new brand. But the profits and assets now remain in Russia
as opposed to being repatriated to the United States. In 2020, before the
conflict, McDonalds turnover in Russia had reached US$ 1.3 billion, accounting
for 9% of total global sales. It is now 100 % a Russian business.
In a nut and shell, Russia despite EU and American sanctions making significant
advancement in economy, trade and investment. The efforts to isolate it did not
get the desired results. It is therefore need of time that European countries
realize that they can not stop China and Russia, rather it is a better way to
come to the table talk and resolve problems by peaceful means father than
sanctions and escalating war Sanctions against Russia and trade war against
China will have more negative effects than benefits.