Russia’s business leaders are focusing on the modern world’s shifting notions of globalization and sovereignty. Globalization needs rules and regulations that are inclusive of all nations and reflect the changing dynamics of the global economy.

Photo: Geneva Press Club

At a panel discussion in Geneva, Switzerland on March 6, “European Choice: Globalization or Re-Sovereignization,” participants focused on the current economic and political trends caused by globalization and their influence on the interaction between countries. Of course, the main focus was on the analysis of historical interactions between Europe and Russia, the current crisis between Russia and the West.

The Geneva Press Club event, which was organized by the Endowment for St. Andrew the First-Called Foundation and supported by the Chamber of Commerce and Industry of Switzerland-Russia/CIS, the Swiss-Russian Forum, Lomonosov Moscow State University, and World Public Forum’s “Dialogue of Civilizations,” resulted in one major takeaway: Globalization in its current form needs a re-think.

The world in its current stage of development lacks rules and regulation,” according to Dr. Walter Schwimmer, former Secretary General of the Council of Europe (1999-2014) and Austrian politician and diplomat.

Interestingly, the experts at the event also brought up the issue of values, which can be perceived differently due to religious, historical and cultural peculiarities and the process of globalization. However, all participants were in consensus about the fact that Russia and Europe cannot exist without each other.

Opening up the conference, Vladimir Yakunin, the President of Russian Railways and the President of the World Public Forum’s “Dialogue of Civilizations,” emphasized that, “Globalization is a matter of political reality, not of our taste or willingness to accept it or not.” He first acknowledged all the positive aspects of globalization that are impossible to ignore.

However, he also underlined that globalization has its drawbacks, such as a banking system which hasturned into an absolutely independent and rather profitable kind of business which dictates to other elements of the economy how they should develop.” 

Walter Schwimmer agreed with Yakunin, pointing out that globalization is not perfect. Globalization has both negative and positive aspects and it has its controversies. “There should be rules according to which all actors should live, this is especially important with regard to financial markets and international corporations,” he suggested.

Russian economist and former acting chairman of the Central Bank of Russia Tatyana Paramonova agreed with Dr. Schwimmer. However, she underlined that the big question is over who is setting up the rules and if those rules are agreed upon by all actors.

Vladimir Yakunin stated that, since the 1990s, when the new global order started to form, globalization became a key word in defining it. He quoted the famous French economist Jacques Attali, who said in 1990 that in the current world order, in the globalized world, there would be winners and losers, and what is most importantly, the number of losers would exceed the number of winners.

This description reflects current reality in Yakunin’s view and this situation leads to the question that a lot of states are raising: What is the role of sovereignty in a globalizing world? Today the state defends the rights of its people, its territory and particular values inherent to its people. And therefore, as Yakunin claims, today there is a dichotomy between global values and state values that on the level of declarations are the same but, in reality, are not respected.

Dr. Schwimmer tried to answer this dilemma saying that there is a need for more international cooperation and for more coordinated globalization, which needs rules. In that regard he brought up the recent Minsk agreement signed by four leaders - Putin, Poroshenko, Hollande and Merkel - in February 2015.

As he argued, this agreement demonstrated the leaders’ commitment to the vision of a joint humanitarian and economic space from the Atlantic to the Pacific. This is a sign that there is an understanding in further mutual cooperation and further globalization according to at least some rules.

Doubting the ability of nations to follow these rules, Hans Koechler, the president of International Progress Organization and a professor at the University of Innsbruck, posed a challenging question: Will the European Union be able to act independently in the globalizing world?

He argued that currently the EU is facing a major dilemma - whether its members are able to emancipate themselves from the dominance of the U.S. Dr. Koechler underlined that the crisis in Ukraine demonstrated the weak role of the EU in the global decision-making process. This weak role comes from the interference of an outside power that makes the EU a hostage of geopolitical confrontations that are not of the EU’s choice.

He believes that the EU has to contribute to the emergence of a multipolar order. In the view of Dr. Koechler, only a structure which represents the balance of power among all major actors deserves to be named the “new world order.” To find that balance, the EU should not have to make the choice of whether to side with the U.S. or Russia. It should do both and should not force others to make such choices.

Professor of Tulane University Raymond Taras also shared concern over the lack of rules and regulations in globalization, bringing up the example of the Transatlantic Trade and Investment Partnership (TTIP). He argued that, if it succeeds, it would give huge power to multinational corporations while weakening the sovereign powers of the states.

To support this view, he gave the example that currently 51 out of the 100 biggest economies in the world are multinational corporations. They also account for two-thirds of world trade. So, giving them such powers with minimum regulation is definitely a threat, said Prof. Taras. He proposes that, “The EU should stop talking about who belongs to the European family of nations and who is not European, who is barbarian. This is what stokes the flames.”

It is quite clear that the topic of the discussion has multiple angles to be examined from and also contains a lot of controversies. However the participants of the event agreed that the common goal for all European countries is to preserve the state’s sovereignty and to prevent any conflicts in Europe.

In addition to that, participants shared a common understanding that cooperation between Russia and Europe, which has deep historical roots, should not be sacrificed over the division lines that are currently on the rise. The only way for sustainable development in the future is a mutually respective dialogue like the one that experts and politicians had during this event.