Echoes Of The St Petersburg International Economic Forum

The St Petersburg International Economic Forum (SPIEF) was held from June 18-20 2015 in Russia’s second capital of St Petersburg. The SPIEF has been held since 1997 and since 2006 has been under the patronage of the Russian president.

This year’s forum was held in the midst of the ever deepening crises in relations between the Russian led Eurasian Union, China and the EU, US on the other hand. We will look at the main highlights of the forum from our perspective and discuss what we can learn from this forum.

The forum opened on Thursday June 18 with opening remarks by Sergei Prikhodko the Deputy Prime Minister of the Russian Federation who is also the Chief of Staff of the Government of the Russian Federation and the Chairman of the Organizing Committee of the St. Petersburg International Economic Forum.

In his opening remarks, he said that the aim of the forum was facilitate Russia’s program to develop business and economic links with countries of the east and the west and to provide a common platform where such cooperation was possible. He went on to mention that despite the unfortunate policy of sanctions by some of their partners, at this year’s forum, there were more participants than last year showing clearly that the policy of isolating Russia in the international community undertaken by the west was a flop and could not happen.

There was then a panel discussion moderated by Konstantin Remchukov, the general-director and editor-in-chief of Nezavisimaya Gazeta with panel participants Igor Shuvalov first deputy prime minister of the Russian federation, German Gref, the Chairman of one of Russia’s biggest banks Sberbank, and former finance minister Aleksei Kudrin.

The discussion focused on Russia’s economic future in the context of changing trends in the 21’st century. The tone of the discussion showed that Mr Shuvalov, Mr Gref and Mr Kudrin are still beholden to the old west-centric paradigm of the west as the engine of the global economy. Mr Shuvalov even went as far to say that there is no pivot to the east, which sharply contradicts what president Putin has indicated as the new vector of Russia’s political and economic engagement, which is the pivot to Asia.

It is widely understood that pro-western liberals like Mr Shuvalov, Mr Gref and Mr Kudrin need to be sent to the pale of irrelevancy and marginality as regards the vector of Russia’s economic development. We will like to state here that the Asia-Pacific region is projected to be the richest region of the world by 2016 overtaking North America and the EU.

We should also remember America’s pivot to Asia announced earlier on. So the statements of these pro-western Russian liberal economists and officials indicate maybe their lack of understanding of the changing global dynamics of economic power or a deliberate effort to sabotage their country’s wellbeing in order to please the west. There are a dime a dozen officials and economists like that in Africa who are co-faith brothers with these Russian liberals in believing the myth of the eternal dominance of the western world and of western ideas.

One highlight of the forum was the Shanghai Cooperation Organization (SCO) business forum which was held on the first day of the forum. We will like to note that the SCO unites Russia, China, Kazakhstan, Tajikistan, Uzbekistan and Kyrgyzstan and has Afghanistan, India, Iran, Pakistan and Mongolia as observer states. India is set to join the SCO at the SCO summit in Russia this July.

The SCO business forum discussed and debated a broad agenda, including the Eurasian Economic Union as a driver to revive and strengthen SCO investment cooperation, steps to foster cooperation in multilateral projects, SCO economic programme financing, and capitalizing on new market opportunities. The highlights of the SCO business forum were as follows:

Anatoly Aksakov Chairman of the State Duma Committee on Economic Policy, Innovative Development and Entrepreneurship said:

“We need to transition to conducting mutual settlements in national currencies, and we believe that all the conditions are already in place for this.”

Ping Yu Vice Chairman, China Council for the Promotion of International Trade (CCPIT) said and we quote his words:

“We must establish a mechanism for working together in the area of innovation. After all, innovation is an engine, a motor that drives any type of cooperation”.

Dimitry Mezentsev the secretary-general of the SCO concluded by saying:

“We have discussed on numerous occasions how to combine the economic potential of all SCO member states, […] and we’ve discovered the right formula – national interests can only be taken into account when the entire organization’s interests are accounted for”.

We note here the emphasis of setting trade transactions in national currencies bypassing the US dollar.

Another highlight of the SPIE Forum was the Russia- India business discussion round table where Nirmala Sitharaman Minister of State for Commerce and Industry of the Republic of India and Aleksander Tsybulskiy Deputy Minister of Economic Development of the Russian Federation both stressed the importance of reducing trade and administrative barriers between the two countries, and the new to find, establish and develop new areas of growth as the old models have exhausted themselves.

An example of the increasing corporation between the two countries is the framework agreement signed between India and the Russia led Eurasian Economic Union (EAEU). The framework agreement is designed to facilitate a free trade one between India and the EEU. This agreement was signed at the SPIE Forum.

Another round table at the SPIE was the Russia-Japan business round table where increased business corporation was discussed. We can see a strategic emphasis on deepening economic and financial integration with Asia despite the infantile protestations of Russia’s liberal class.

There was also the BRICS (Brazil, Russia, India, China and South Africa) business forum where the participants discussed a broad spectrum of topics: the current state of cooperation in trade and investment between the BRICS countries and future prospects in this area, ways to stimulate economic recovery in the BRICS countries, building and strengthening inter-regional ties, establishing a favorable business environment, harmonizing trade regulations, and removing administrative barriers and bottlenecks.

Another interesting highlight was the panel discussion on the New Development Bank (NDB) being established by the BRICS countries this July. The panel discussion was under the theme, The New Development Bank: A stronger role for BRICS in the global financial architecture. They discussed what this new institution means for global economic management and what some of the key areas of focus were over the medium term.

Another big panel discussion was on the Eurasian Economic Union (EAEU): A new compass in global economic relations. In this roundtable, they discussed how the EAEU was the first integration association between countries of the former Soviet Union that is recognized by the global community.

This next-generation integration-based cooperation format corresponds to the contemporary trend of global regionalization. How does the EAEU, in conjunction with other regional initiatives, promote economic integration and create new opportunities for its member states? Is a currency union of the EAEU an ambition or reality? What are the possible ways of strengthening cooperation between the EAEU and other regional economic associations? What is the view of trade partners on the EAEU?

In another roundtable discussion, the role of Small and Medium Enterprises (SMES) as competitive disruptors to spur economic productivity was discussed with discussions centering on ensuring a better regulatory framework which will allow SMES to thrive.

The St Petersburg International Economic Forum (SPIEF) attracted about 7000 participants and there 2474 speakers with about 70 agreements signed by business with a value of several billion dollars.

We now ask the fundamental question. What can Africa learn from this to promote trade, investment and enhanced integration in Africa? We should be thinking of organizing the African Union International Economic Forum (AUIEF) which will bring together big business both African and foreign, African SMES, governments and institutions from all over Africa and the world where this platform will provide a common matrix to enhance economic links, trade and investment and integration in Africa.

The World Economic Forum (WEF) which is based in Davos organized this year a World Economic Forum on Africa 2015 on June 3-5 in Cape Town South Africa. But let us be clear that the WEF is not Africa based and cannot and will never have Africa’s core interests at heart. An African Union International Economic Forum (AUIEF) organized under the auspices of the AU with a focus on what Africans want in the sphere of economics, education, finance and investment should be the leitmotif of African economic thinking in the 21’st century. Will we take up the challenge?