After the collapse of the Soviet empire, Russia has steadily shown interest in many spheres, ranging from political consultations through business and economic cooperation to culture with African countries. Of a special focus, Russia attaches significance to deepening trade and investment cooperation with Africa.
It is encouraging that more Russian companies, being aware of the prospects that are opening in the large market of the continent, are working actively in such fields as nuclear energy, hydrocarbon and metallurgy industries. Russia also pursues a pragmatic policy aimed at enhancing multidimensional ties with the countries of the continent on the bilateral and multilateral basis.
In this exclusive interview, Professor Irina Abramova, newly-appointed Director of the Institute for African Studies under the Russian Academy of Sciences, spoke recently to Kester Kenn Klomegah, an independent research writer on Russia-African affairs, about some aspects of Russia-African relations, economic cooperation, cultural dimensions and some future prospects.
In the first place, how would you describe Russia’s position towards Africa? And the position towards Africa from the Kremlin?
The events that occurred relating to the military conflict in Ukraine, the introduction of economic sanctions and countersanctions, deteriorating conditions in the energy market, show that the restructuring of the Russian economy is a strategic task of ensuring national security. The transition to the active import substitution should encourage the rapid development of high-tech industries, as well as the modernization of the industry that, in the end, will provide a transition from raw material orientation of the Russian economy to more innovative ways of development.
The task of Russian researchers is to offer theoretically rationale, innovative solutions for the RF to overcome the crisis, which could give significant positive results in the short term. Africa could be one of such effective and breakthrough solutions. It is a compact, comprehensible and relevant to our capabilities possible object of economic expansion in a number of sectors, for products which are closed for western markets, as well as a promising supplier of agricultural and commodities which are necessary for the Russian consumers.
One of the results of rethinking of foreign policy priorities of Russia on the basis of President Vladimir Putin’s initiative was, in particular, a definite shift in Russian foreign policy in the direction of the axis of the East. Nothing new has been revealed regarding the Ukrainian crisis. It served as a new impetus for further development of mutually beneficial cooperation outside of the Euro-Atlantic partners. At the same time, due to the attempts by Western countries to isolate Russia, the growing list of promising new economic partners becomes particularly important and Russian foreign policy rotates the vector, not only to the East but also to the South, in the direction of the African continent. For Africans, Russia still appears as the most likely ally in defending its interests in the world arena as a natural counterweight to the hegemonic aspirations of one or a group of world powers.
As a Director of the Institute for African Studies, what would you say about the development of the current relations between Russia and Africa?
In the eyes of the Russian political establishment and business community, Africa is still viewed as a continent of poverty, endless wars and epidemics, stuck in the pre-industrial stage of development, and surviving only thanks to international aid. Meanwhile, there is a different Africa – Africa with rapid economic growth (5% or more per year for the last twenty years), dynamic formation of democratic management systems, modern structures and institutions of a market economy, a major player in the market of natural and human resources, a key source of growth in global demands, profitable spheres of investment operations.
In recent years, Russia’s relations with Africa is a new trend. It is deepening and becomes a more active political dialogue, activated economic, humanitarian and cultural cooperation. This is facilitated by negotiations at the highest level. Relations develop with leading regional associations, including the African Union. We regularly take part as guests and active participants in the discussions, including on the sidelines of international summits and conferences, and in many African capitals. Relations with African countries and regional associations in the field of security and counter-terrorism.
Building mutually beneficial cooperation remains one of the main priorities of Russia. The foreign trade turnover with the countries of sub-Saharan Africa for the period from January to December 2015 was estimated at US$ 3.3 billion. A lot or a little? If we compare with the European Union – US$ 340 billion, China – about US$ 200 billion, well, somewhere close to the United States – US$ 14 billion. Expected by the end of last year, the decline of this indicator compared to 2014 year due to the general financial and economic instability in the world and the limited resources investing in large and expensive projects, the fall in world prices of most commodities.
If we consider our foreign trade it is less than 1%. At the same time Russian business holds a leading position in the exploration, mining (bauxite, gold, and copper, and cobalt, and diamonds, and many more). In the future, we see the participation of domestic companies in a number of African countries, such as Egypt, South Africa, in nuclear power projects. Constant interest in the African market is maintained and major Russian oil and gas operators. An important area of work in this regard is the improvement of the legal framework of our relations with the African states. On the agenda of an agreement with the African partners on economic and trade cooperation in order to avoid double taxation and protection of intellectual property. All these questions are, of course, of great importance for the representatives of our business because they provide a solid foundation for future cooperation.
Yet, it must be noted that a number of Russian companies’ results of the development of the African market does not unfortunately correspond to any of our export opportunities or resources of the vast continent, which has huge reserves. As before, we cannot deny the insufficient knowledge of the Russian business structures specificity of Africa, its requirements, and other parameters.
On the other hand, Africans are poorly informed about the possibilities of Russian partnership. Interest in quality enhancing economic ties, including a line of private enterprise, of course, there is a tendency of growth. To do this, first of all, to establish an effective exchange of information in the investment potential of the business, to focus efforts on expanding partnerships, increasing the return on existing cooperation mechanisms and implementation of the most complete and effective projects. In recent decades, marked by a noticeable re-activation of the whole complex of relations between Russia and Africa. At all levels, the attention to this continent in our country increases. It is important that in the process contacts between people expand. More and more of our fellow citizens visit African states, familiarize with their ancient history and culture.
Do you think Russia should transfer its technology to economic sectors such as agriculture, health and manufacturing in Africa?
Russian technology can be quite successfully promoted in Africa, especially today in the context of the weakening of the Russian currency, which makes exports advantages of the Russian Federation. It’s not just about these industries, which you mentioned, but also the exploration, transportation, infrastructure, energy, in particular, the construction of nuclear power plants.
In your view, have Russian authorities supported strongly Russian companies to invest in Africa? Are Russian financial institutions interested in viable corporate projects in Africa?
State support, including investment insurance, is offered mostly to large companies. Meanwhile, the most important task – the support of the middle, including regional, business, and those willing to work on the continent, is more flexible and mobile. This support at the state level is still lacking. As for the Russian small business, it cannot compete with the Chinese and Africans.
What challenges are there for Russia returning to Africa now? Does it face any competition from other foreign players in Africa?
Russia-African relations have a significant and growing resource which is promoting Russia towards achieving national priorities. This includes expanding cooperation with Africa in the international arena in terms of coincidence or closeness of positions on the formation of a new international order, another key international problem, which increases the possibility of consolidating Russia’s position as an independent and influential center of world politics. The presence in the African markets favorable conditions for the implementation of the continuing competitive advantage (for example price) of Russian industrial goods, engineering products, products of the defense-industrial complex, the expansion of opportunities for the implementation of Russian innovative technologies, scientific and technological, educational, health and other services can contribute successful implementation to the import of Russian politics.
At the same time, the development of Russia-African economic and trade cooperation is an effective tool for solving the problems of the Russian industry to ensure scarce and financially the least expensive types of mineral raw material reserves of many species of which Africa is a monopoly in favor of the world level. Russia may be involved in the implementation of projects aimed at achieving energy security in Africa with the use of atomic energy. It has extensive experience in the construction of nuclear power plants, modern technology with exhaust of the post Fukushima generation of safety systems. And finally, in a Russian counter sanctions condition, trade with Africa today is an important source of new demand generated due to changes in the structure of the Russian consumer market. Africa is, indeed, an important and promising partner for Russian business. But, it is a highly competitive market and there are already too many foreign players.
Tell us about some efforts, such as the creation of African Business Initiative, have become so important this time? Would you encourage such private initiatives?
The Institute for African Studies is one of the founders of the initiative. It is a direct challenge – to move from declarations to deeds by bringing together government, diplomatic, scientific, economic and financial resources in order to promote Russian business on the continent. All previous initiatives have not led to the desired results because it didnot have a complex character.
Why Russia’s soft power is softer compared to Soviet days? Can media play any role here?
During the Soviet era, Africa was among our political and economic priorities. In the 1990s, after the collapse of the USSR, Russia has largely reoriented to western states. Currently, the Russian Federation does not have a comparable economic potential of the USSR to promote its influence in Africa. However, with existing resources, it is possible to succeed in this business, if you focus on the right directions and actively develop cultural ties with African countries, to provide scholarships to African students, to promote the Russian language and to carry out humanitarian projects. A great contribution to the improvement of Russia’s authority in Africa has made the development of Russian scientists against Ebola vaccine. RF also actively supports all initiatives of African States to establish a more fair world order. In the past few months, as a result of the successful operation in Syria the Russian Federation sharply increased its prestige in Africa. The media should more actively inform Russians about the prospects for the development of the African continent, its history and culture. Unfortunately, the Russian man in the street does not know much about Africa. For Africans, so far Russia is associated with the Soviet Union, the majority of Africans still have very warm feelings towards Russia. But in general, and the Russian Federation in Africa, and Africa in the Russian Federation are very poorly represented in the media.
In this case, what else should be done about investment and business to “catch up” with other foreign players such as China, India, Europe and United States that are very active on the continent?
I think and will strongly suggest that Russia should take the lead in preserving the balance of interests on the African continent in the system…”Russia is a country of the West – the new players (China, India, Brazil)” and to seek cooperation on the full range of African issues, taking into account the national interests of each party.
And finally what should be done to encourage African presence both in terms of economic and culture in the Russian Federation? In this direction, what are your expert recommendations?
It is necessary to organize business forum Russia-Africa, which should be held, at least, one time per year (that is yearly), as well as the organization of African cultural festivals, the festival of African cinema in Russia, art exhibitions and concerts of popular African artists. Creation of a special transmission of Russian television, entirely dedicated to Africa. And all these can be organized in close cooperation with the African diplomatic corps. Increase the number of scholarships to Russian universities for Africans. Active work with the African Diaspora in the Russian Federation.
Russia and Japan: Inseparable Partners
By all accounts, Japan with its strong economy and many high-quality manufactured brands is practically searching to expand into foreign markets. Japan, with an estimated population of 126 million, has a small territory. According to UN’s assessment report on global population in 2019, Japan was the world’s tenth-most populous country. That compared with Russia, its vast territory and approximately 145 million, Japan’s investment is fast growing in the Russian Federation.
Despite its large investment and admirable brands from automobiles through mega-shops to healthcare and beauty, and to social service sector, Japan is consistently looking to expand its business tentacles. Without doubt, at the St. Petersburg International Economic Forum held under the theme: “Together Again – Economy of New Reality” early June, Russia-Japan business session attracted unprecedented large number of participants.
While noting the fact that the coronavirus pandemic did not and will not hinder economic cooperation between Russia and Japan, Minister of Economic Development of the Russian Federation Maxim Reshetnikov, noted in his speech at the session, further reviewed some significant aspects of the Russia-Japanese economic cooperation, and finally painted the broad outlook for the future.
“Despite a difficult year, we managed not only to continue existing projects but were even able to launch new ones. An express test for coronavirus was created, and a container train with Japanese goods was launched for the first time on the Trans-Siberian Railway. Construction began on a centre for preventive medicine in Khabarovsk. The Japanese company Fanuc opened an engineering centre in Skolkovo,” he told the gathering.
According to Maxim Reshetnikov, the plans for cooperation with Japan include the creation of liquefied natural gas trans-shipment complexes in Kamchatka and Murmansk region and the construction of an ion therapy centre for cancer treatment in Obninsk. Both countries are preparing to enter new and promising tracks in hydrogen energy, climate change, the creative economy, and e-commerce.
That however, Russia has encouraged potential foreign investors to venture into the regions. For example, Kaluga, which is provincial city and stands on the famous Oka river about 150 kilometers southwest of Moscow, has adopted few favourable measures, among others, and as a result has attracted five foreign automobile manufacturing companies including Japanese Nissan.
Governor of the Kaluga Region Vladislav Shapshа took part in the discussion. “Japan has been and remains our most reliable partner, a partner in a variety of areas. In terms of investments, this of course includes, the development of projects with Mitsubishi and Toyota Tsusho. Mitsubishi has placed its headquarters in Kaluga this year, and together with Peugeot Citroën has been working with us since 2009. Along with Volkswagen and Volvo, it makes up the core of the automotive cluster, which accounts for 12% of the automobiles produced in the country today,” Governor Shapshа said, giving a full business profile in his region.
The Autonomous Republic of Tatarstan also attracts foreign investors and business people. As part of the Volga federal district, its capital and largest city is Kazan, one of the most important cultural cities in the Russian Federation. “We operate a wonderful plant built in Tatarstan by Mitsubishi and Sojitz. I must say that Japanese equipment has proved its reliability. We are very pleased with this plant. Its capacity is 720 thousand tonnes of ammonia and methanol. We are grateful for this contribution,” Founder and Chairman of the Board of Directors of the AEON Corporation, Roman Trotsenko.
Japanese manufacturing stories are exceptionally useful and needed to be shared among business leaders. In his contribution, General Director of Sollers Group Vadim Shvetsov told the attentive gathering: “We launched a machine shop for Mazda engine parts. It was a very difficult at first, given that cooperation was interrupted, and we could not communicate directly. On the other hand, however, we have introduced a lot of interesting digital communication methods. Thanks to such mobile cooperation and even VR technologies, we still managed to launch production.”
The new environment has pushed the countries to seek new resolutions to overcome challenges. “The coronavirus pandemic has forced us into many challenges. At the same time, it has highlighted, illuminated in a new way some of the problems that we had seen and been aware of even before the epidemic. These are the problems of healthcare, energy, and digitalization. It seems to me that now is the moment for us to start new cooperation in these areas, especially in healthcare,” emphasized the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama.
“Our trade and economic work together probably suffered a little from that period of forced isolation. Nevertheless, I certainly believe that the crisis is pushing us to search for new ways to create benefits for our consumers,” remarked Chairman of Delovaya Rossiya (Business Russia) and Chairman of the Board of the Group R-Pharm Alexey Repik.
The speakers have acknowledged that Russia and Japan face similar environmental challenges while developing economic cooperation. “Amid the growing trend of decarbonization, in October of last year, Japanese Prime Minister Yoshihide Suga announced a goal aimed at achieving carbon neutrality by 2050. Moreover, the goal is to reduce 2013 levels of greenhouse gas emissions by 46% by 2030. Achieving these targets will require that Japanese industry be heavily involved and adaptable,” according to President of the Japan Association for Trade with Russia, and Special Advisor of Kawasaki Heavy Industries, Ltd. Shigeru Murayama.
Chairman of Delovaya Rossiya (Business Russia) and Chairman of the Board of the Group R-Pharm, Alexey Repik, reminded that it is of great significance that President Vladimir Putin in his address to the Federal Assembly set the task of significantly limiting the accumulated volume of carbon emissions in our country just as similar goals were set by the Prime Minister of Japan, Yoshihide Suga, for the Japanese economy.
For the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama, natural gas, which can reduce carbon emissions, is a very important resource, and Russia is a leader. Thus the unification of these Russian resources and the Asian market could be highly promising area for cooperation.
Russian business needs to attract investment. “The demand for equipment and the demand for capital both remain in Russia. Russia’s capitalism, in the positive sense of the word, is young and there is little national capital in the country. Interest rates on loans remain very high, and the requirements of the national bank, the Central Bank of the Russian Federation, to credit policy remain stringent,” observes Founder and Chairman of the Board of Directors of the AEON Corporation Roman Trotsenko.
“There are forecasts that the Russian economy will resume growth this year and ultimately grow by more than 3%. Japan also aims to recover as soon as possible from pandemic-related failure. For this, of course, the primary and first step to build a healthy and sustainable post-covid society across the globe, will be to work together with Russian partners on the basis of the eight-point plan,” Director of Mitsui and Co. Ltd., Masami Iijima, informed the gathering.
Avoiding sanction-related restrictions is a key for business. “The challenge is to move the financing relationship between Japan and Russia outside of these sanctions. For example, financing in euros or in yen. This would be very positive and would allow us to take advantage of the cheap rates on loans in Japan and in Russia,” Founder and Chairman of the Board of Directors of the AEON Corporation Roman Trotsenko.
Healthcare and energy partnership also remain significant for both and, need not be overlooked. “New areas are emerging. For us it is hydrogen and ammonia; it is the capture and storage of carbon, carbon dioxide, and its use as a resource. Here, it seems to me, we must increase our work together,” according the Minister of Economy, Trade and Industry of Japan Hiroshi Kajiyama.
“The health sector is the first item in the eight-point economic cooperation plan. I think that our countries should increase cooperation in this area,” added the President of the Japan Association for Trade with Russia and Special Advisor of Kawasaki Heavy Industries, Ltd. Shigeru Murayama.
“We believe that Japan can help achieve the goal of increasing healthy life expectancy set by the government of the Russian Federation,” suggested Chairman of the Japan-Russian Committee for Economic Cooperation and the Federation of Economic Organisations Keidanren and Chairman of the Board of Directors of the Marubeni Corporation Fumiya Kokubu.
Ahead of St Petersburg forum, Japanese Ambassador in the Russian Federation, Toyohisa Kozuki gave an interview to Interfax News Agency, listed a wide-range of concrete and significant projects as part of efforts toward strengthening Russian-Japanese economic cooperation. According to the ambassador, widening economic cooperation between Japan and Russia is primarily part of the current eight-point strategic cooperation plan.
Within this plan, the Okura Hotel project in Vladivostok is an example of progress in urban development in 2020. This will be the first Japanese hotel in Russia. The Okura Hotel’s refined services will make Vladivostok more comfortable and accessible not only to its residents but also businessmen and tourists visiting this international city. Vladivostok catches the attention of the Japanese as the nearest ‘European’ city, it can be reached from Tokyo by air in 2.5 hours. That is why the opening of the Hotel Okura Vladivostok will definitely make the city more attractive to Japanese tourists.
As part of cooperation, Japan is also making an effort to develop postal services in Russia, and some results in this sphere have already been reached, the efficiency of postal deliveries was increased thanks to the use of Japanese-made sorting machines at international postal exchange centers in Moscow. Cooperation between postal services of both countries is growing stronger also through the exploration of e-commerce opportunities on both sides. In the future, it is anticipated that a system will be in place, thanks to which Japanese consumers can order Russian goods online and the EMS postal service will deliver them to Japan.
In December 2020, Japanese entertainment center Round One, which brings together arcade games, bowling and other amusements, opened at the Yevropeisky shopping mall in Moscow. Round One is the most popular closed amusement parks chain in Japan. The new venue is a unique leisure venue for Moscow residents, in the sense, that they can get acquainted with Japanese culture without leaving their native city.
There is progress in promoting the use of the Trans-Siberian Railway as far as cooperation in the Far East, primarily in transport and infrastructure, is concerned. In particular, the Ministry of Land, Infrastructure, Transport and Tourism of Japan in cooperation with the Russian Railways is implementing a pilot project to promote the use of the Trans-Siberian Railway.
The first container train carrying cargo from Japan to Europe was dispatched in 2020. And those were not individual containers as before but a whole container train. This was done in the expectation that it will make it possible to ship freight more cost effectively compared to container transportation, and many Japanese companies showed an interest and took part in the pilot project.
The companies that participated in the pilot project said that against the backdrop of destabilized logistics between Japan and Europe amid the coronavirus pandemic, the use of the Trans-Siberian Railway can be seen as a third option in addition to sea and air transport.
As an example of such expectations, Ambassador Toyohisa Kozuki informed that Japan’s logistics company Toyo Trans started regular container shipping services with consolidated freight to Europe, to the Polish city of Poznan, along the Trans-Siberian Railway in February. This service provides for regular shipments every Thursday from a Japanese port. The cargo reaches Poznan in 22 days. Transit time decreases by about half compared to sea routes. We hope that the transit along the Trans-Siberian Railway will give a boost to logistics between Japan, Russia and Europe and lead to the further development of economic cooperation.
Next, regarding agriculture, forestry and fisheries, the relevant agencies of Japan and Russia in January 2020 signed a memorandum of cooperation on a joint Japanese-Russian project to increase the efficiency of agriculture and fish production in Russia’s Far East. Current projects are now getting support, and the search is on for new projects in three areas that provide for the use of technologies and know-how of Japanese private companies.
These include, firstly, increasing the productivity and export potential of soya, corn and other crops; secondly, expanding production of vegetables through expanding vegetable greenhouses in Yakutsk and other cities; and thirdly, increasing production and deliveries of fish and seafood inside and outside Russia. Greenhouse vegetable growing in Yakutsk is a particularly large project in this sphere. Greenhouses allowing fresh vegetables to be grown all year long in severe climates and permafrost have been built in the framework of this project. Construction began in 2016, it continued in 2020, and should be completed this year, 2021.
Due to the coronavirus pandemic, the forum this year was held, a combination of off-line and online format, with all epidemiological precautions observed. The Saint Petersburg International Economic Forum (SPIEF), often dubbed the Russian Davos, is the country’s main showcase for investors, attracting political and business leaders from around the world. The SPIEF is held annually, and since 2006 it has been held under the patronage and with the participation of the President of the Russian Federation.
Putin and Biden meeting – a chance for a better world
The whole world is looking forward to the meeting of the new US President Joe Biden with his Russian counterpart, Vladimir Putin. Although the Kremlin and the White House urge people not to expect too much from the June 16 summit, one still wants to believe that a personal meeting by the leaders of the two rival powers will lead to a thaw in bilateral relations and help defuse global tensions. At the same time, statements coming from the White House about negotiation plans sound rather vague. The bottom line is about “understanding Russia’s position and its aspirations.” The impression is that hundreds of Russologists working for the State Department, NSA, CIA and other agencies are unable to provide a definitive answer to this question, and the not very young 46th President of the United States has been forced to personally go for information. Moscow makes it clear that negotiations are a good thing, but the initiative comes from the United States, so the agenda will largely be agreed right on the spot.
At the same time, there are a number of key topics that the leaders of the two countries simply can’t ignore. Of course, there will be questions about human rights that Biden wants to ask Putin so badly, but the Russian leader too may want to ask about certain “inconvenient” things. First of all, about the United States participation in conflicts in the Middle East, where the “liberation movements,” indirectly supported by Washington continue to attack Russian and Syrian government forces. In fact, the parts of Syria and Iraq controlled by the Americans and their allies have become areas where there is no effective conflict against terrorists. The militants from that area are killing people in Germany and France, and spreading the ideas of extremism and radical Islam throughout Europe.
The United States has every right to defend its interests in the oil-producing regions, but such methods are hardly acceptable. The Kremlin apparently has obtained enough evidence of the “dirty methods” of warfare practiced by the United States in the Middle East. The spare parts for the numerous drones shot down over the Khmeimim airbase alone prove beyond any doubt the American involvement in organizing aerial attacks on the Russian military. However, a dialogue between Russia and the United States could quickly extinguish the flames of war in Syria and, more importantly, help ensure Europe’s security against terrorist attacks. So, Putin has a very important trump card up his sleeve, which he can’t fail to play. The only question is how Biden will react to this win-win move by Moscow.
As to the question about human rights, it may prove rather unpleasant for Biden. During preparations for the summit, the Swiss government pointedly indicated (apparently at the suggestion of the White House) that the vaccine race continues. Geneva is ready to accredit, without PCR tests, journalists who have been vaccinated with Western vaccines, but not with Sputnik, which has already proven its effectiveness. Needless to say, the Russian negotiators also used their own country’s vaccine. However, such a move, designed to show once again who is the “boss” in the upcoming meeting, only reflects a complete disregard for the European`s right to vaccination, and this is only the beginning. And the demonstrative support and financing of the Russian opposition – hardly gives Biden any reason for accusing Russia of human rights violations.
Even the case of the Belarusian oppositionist Protasevich, who was taken from the plane which grounded in Minsk due to a terrorist threat immediately brings to mind the “arrest“ of the plane of Bolivian leader Morales, or the US-approved extrajudicial detention of Russian sociologist Shugalei in Libya. In addition, the long history of the Guantanamo detention center hardly gives US officials any moral grounds to lecture anyone about human rights.
If, during the Geneva summit the United States and Russia can heal the festering wound of the Middle East conflict, this would be a giant step forward in the war on terror. The question is whether Biden will try to turn the dialogue with Putin into a series of accusations to increase his approval rating back home. A similar incident has already taken place and made the 46th President of the United States to look not so good. That being said, we can hope that in Geneva Joe Biden will lean back on his many years of experience and good knowledge of Russia, and emotions will not prevent him from achieving a breakthrough in relations with Moscow and mending bilateral ties, thus easing tensions in Europe and allaying peoples fear of a new global conflict.
Russia, Europe Discuss Prospects for Cooperation at SPIEF’21
Despite the deep-seated disagreements between Russia and the European Union, Kremlin is indiscriminately courting European business leaders. Ahead of the 24th St. Petersburg International Economic Forum [SPIEF’21] on June 2-5, President Vladimir Putin, in an official message, emphasized Moscow would forge a closer economic cooperation with its foreign partners and ready to share experience in various areas and further called for building constructive partnerships between members of the global community and expand business ties to effectively tackle the current critical global challenges and achieve sustainable development.
“We are ready to share our experience in areas such as healthcare and digitalization, and to work with partners to build better telecommunications, energy, and transport infrastructure. We also recognize the importance of addressing key issues facing the environment and climate,” according to the president’s message released on the official website.
Later at the plenary session held under the theme A Collective Reckoning of the New Global Economic Reality, Putin said, particularly about energy connectivity between Russia and Europe – “that Gazprom is ready to fill Nord Stream 2 with gas. This route will create direct links between the Russian and German systems and will ensure energy security and reliable gas supplies for the Europeans, like Nord Stream 1” and, in addition, emphasized readiness to implement similar high-tech projects with European and other partners in the future, despite all sorts of artificial barriers in the current political environment.
That, however, during the business discussion exclusively devoted to Russia-Europe, leaders of European business noted that strategies are needed for the improvement of relations between Russia and the European Union, and the necessity to develop a consolidated response to global challenges.
“In 2020, Russia faced four challenges. First, the pandemic, second, the collapse of oil prices, third, the devaluation of the Russian local currency the rouble, and the fourth, which is an ongoing challenge, the geopolitical context that does not make things easier. At the same time, Russia demonstrated good economic indicators. The global challenges are so disruptive that we need to come up with a joint approach and cooperate in fighting the pandemic,” according to objective views of Johan Vanderplaetse, Chairman of the Association of European Businesses (AEB) and President for Russia and the CIS, Schneider Electric.
Taking his turn during the discussions, Maksim Reshetnikov, Minister of Economic Development of the Russian Federation explained that the ultimate goal is to combat greenhouse gas emissions. In this context, technological neutrality, mutual recognition, and implementation of projects aimed to reduce carbon dioxide emissions are crucial. Building these mechanisms is a subject for strong international discussion, and there are high hopes for the climate conference in Glasgow this November.
Development of 5G networks can become a new touch point for Russia and Europe. But, no country, and no government can cope with all the tasks on their own. For example, 5G requires joint efforts, so European Union and Russia must work together to deploy this technology. Now both need to work together on 5G technologies in Russia and in Europe, suggested Arun Bansal, Executive Vice-president, Head of Market Area Europe and Latin America, Ericsson.
“Russia has amazing technological capabilities, and there are great companies. If we compare them with Western companies, if we join forces [connecting to 5G], we will all benefit from this,” added Johan Vanderplaetse, Chairman, Association of European Businesses.
During the discussions, the participants acknowledged that existing problems, especially the need to achieve international agreements. “We are now probably at the most difficult point in the development of our relations since the end of the Cold War. I think both sides value our relationship. Why are we at this negative point in our development? Of course, there are territorial and geopolitical issues, issues of human rights violations. I believe that all these problems contributed to the suspension of our political dialogue, which is now affected by uncertainty. In this atmosphere it is difficult to go back to the normalization of these relations,” according to Markus Ederer, Ambassador of the European Union to the Russian Federation.
Vladimir Chizhov, Ambassador Extraordinary and Plenipotentiary, Permanent Representative of the Russian Federation to the European Union (EU) explained that most of the effective formats available for the members of the European Union and the Russian Federation for interaction are currently on hold. On the other hand, Russia has not closed a single door neither has it imposed restrictions for Europe. All suspensions were initiated by the European Union.
Some believe that there should be solutions, suggested expanding the list of green projects and finding a compromise between government and business. “We categorized nuclear energy as a green project, and this was a crucial decision. We believe that, based on the criterion of greenhouse gas emissions, based on the principles of technological neutrality, nuclear power should be seen as clean energy. And secondly, we have developed a number of transitional projects that may not meet some highest standards, but for many industries in our country this is a big step forward,” says Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.
For Markus Ederer, Ambassador of the European Union to the Russian Federation, it is necessary to use the opportunity to strengthen relationship in the context of green transformation and creation of green economy, as it will be a new field for cooperation that is of high interest for representatives of European business community. The more policy becomes oriented towards the development of a green economy, the more seriously moving towards stabilizing relations between Russia and Europe.
Regional experiments that allow to introduce a system of emission quotas in the regions. “We are working on a soft regulatory framework that will allow us to implement climate projects, take into account the carbon footprint of products that will make our entire system more transparent, while at the same time we are launching a system of more stringent regulation based on regional experiments. Many countries have followed this path. We are currently in the final stage of the Sakhalin experiment, which will enable individual regions, at their will and in agreement with the business, to declare the goal of carbon neutrality and introduce a system of emission quotas with the trading system, and so on,” stressed Maksim Reshetnikov, Minister of Economic Development of the Russian Federation.
“We need to focus on reducing carbon emissions and strengthening other areas. The Sakhalin project is also a great example of enhancing our cooperation, including in the future. These are efforts that we should focus on, excluding the political context. We must work on issues of compliance with the obligations of WTO member countries. The obligations of all WTO members must correspond,” concluded Markus Ederer, Ambassador of the European Union to the Russian Federation.
The St. Petersburg International Economic Forum, popularly referred to as SPIEF, brings together international business leaders, government officials and representatives of expert and media communities to discuss various topics and jointly search for effective solutions to the most pressing challenges in Russian and global economies. The SPIEF is held annually, and since 2006 it has been held under the patronage and with the participation of the President of the Russian Federation.
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