The upcoming SPIEF will cover economic sanctions, positive trends in the Russian economy, and the consolidation of Russia’s status as a global power.

During the last three years, the annual attendance of SPIEF has exceeded 5,000 people, including representatives from more than 70 countries from all over the world. Photo: TASS

On June 16-18, St. Petersburg will host the 20th International Economic Forum (SPIEF 2016). It is no exaggeration to call this one of the most important annual foreign policy events held in Russia.

Since its founding, the SPIEF has experienced a fascination evolution. The forum started in 1997 as a discussion platform for experts, business leaders and politicians from the Commonwealth of Independent States (CIS). However, by 2006 the forum had transformed into one of the main diplomatic and foreign policy events in the country, entirely dedicated to the problems facing Russia’s economy in a globalized world.

Since that time, the Ministry of Economic Development of Russia has set the annual agenda of the SPIEF. Topics for discussion include the current condition and development prospects of the world economy, with particular attention to BRICS countries and the Eurasian Economic Union, the problems in world energy markets and the financial system, the development of market infrastructure, and ways to attract investment to Russia’s regions.

The aggravation of Russian relations with its Western neighbors in 2014 added another important function to SPIEF – it became a meeting place of the Russian political elite and foreign businesses that are suffering losses from the current sanctions war and the general cooling of relations between Russia and the leading economies of the world. The modern mission of this forum, for Russia and the entire world, is to become a platform for business, at which the barriers that divide Russia and other countries, both geographical and informational, can be overcome.

During the last three years, the annual attendance of SPIEF has exceeded 5,000 people, including representatives from more than 70 countries from all over the world. The main audience of the forum are heads of states and governments, heads of major Russian and foreign companies, retired and future political leaders, ministers, governors, leading journalists and scientists.

The most important topics of the upcoming Forum, from the point of view of the Russian Federation, can be divided into three groups: economic sanctions, positive trends in the Russian economy, and Russia’s status as a global power.

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Economic sanctions

Russia’s position regarding Western sanctions appears to be tactically correct, but strategically ineffective. Today, not one qualified expert in the world shares the original U.S. belief that sanctions will allow the West to restore the status quo ante, that is, to force Russia to withdraw from Crimea or force the rebellious Donbas regions in Eastern Ukraine to surrender to the new leaders in Kiev, who came to power through a coup.

The anti-Russia sanctions, in place for over two years already, are dangerous for Russia, strategically speaking. They are slowing down the modernization of the national economy, reducing domestic investment and demand, increasing risks for foreign investors, and increasing the poverty of the population.

Not all of these troubles in the Russian economy were the result of sanctions that were imposed by the U.S. and its allies. An even more important role was played by lower commodity prices, as well as Russia’s refusal to carry out urgently needed reforms to its national economy.

These reforms were stopped in 2003, and to date, they are absent from the agenda of the country’s government and parliament. Nevertheless, the significant contribution that anti-Russia sanctions have made, when it comes to destabilizing the national economy, can be easily seen.

In its fight against the sanctions, Russia is primarily using its “soft power” and tools of public and economic diplomacy. Refusing to negotiate with Washington and Brussels on the lifting of sanctions, Russia is seeking ways to overcome them through import substitution measures, opening access to its market for companies from countries that did not support the sanctions, diversifying sources of investment inflows and goods imported onto the domestic market.

Therefore, the mission of SPIEF 2016 is development of dialogue with the least Russophobic leaders of Western countries, frank discussions with opposition parties in EU member states that are capable of coming to power in the near future, as well as direct dialogue between senior government officials, including Russian President Vladimir Putin, with business leaders in Europe and North America, who are suffering losses from these sanctions.

The main sensation of this forum will be the visit of the President of the European Commission, Jean-Claude Juncker. As the actual head of the government of united Europe, Juncker is making a bold diplomatic move, equally risky and pragmatic. Already he is being subjected to enormous pressure to abandon his trip to Russia. However, as an experienced politician, he has correctly appraised the situation: for the stagnating economy of the EU, the re-establishment of relations with Russia is more important than the now familiar criticism coming from Washington and the capitals of Eastern Europe.

The arrival of Juncker in St. Petersburg is a sign that the Russian tactic of breaking the sanctions blockade is beginning to bear fruit. Of greater political significance are the visits to St. Petersburg by U.N. Secretary General Ban Ki-moon and the Italian Prime Minister Matteo Renzi – one of the leaders of the emerging European movement calling for immediate softening, and then the complete removal of economic sanctions against Russia.

The attendance of SPIEF 2016 by former French President Nicolas Sarkozy is a sign of Russian dissatisfaction with the policies of the current leadership of France. It’s also a bet that, after the French presidential elections in April 2017, attitudes towards Russia will be friendlier than during the administration of President François Hollande.  

Russia – a country with a normal economy

The question of whether Russia is a country with a “normal economy” or a country, whose economy has nothing to do with the laws of the market, has been debated by leading global experts for two decades already. The organizers of the SPIEF 2016 created a program for the forum in which the national economy is regarded as being “normal” - developing in accordance with the same principles as in other countries of the world, including the most developed ones.

The SPIEF 2016 program covers almost all the major problems faced by the modern Russian economy. To discuss these, the forum’s organizers invited top Russian and foreign experts (business leaders, politicians and academics) who have something to say on these issues.

It should be noted that, in St. Petersburg the emphasis will be placed on the positive agenda for Russia: the medium-term macroeconomic strategy, the problems of social inequality, support for entrepreneurship, development of high-tech industries, the issues of comprehensive development or specialization in certain regions. Of course, the range of problems facing Russia today is much wider: the impoverishment of the population (almost 18 percent of the people are living at the poverty line or below it), the outflow of capital and tens of thousands of highly skilled experts leaving the country, the corruption and inefficiency of the judicial system.

However, this is the reason behind the specific nature of the SPIEF program – to discuss the “positive agenda” of the national economy, and leave debates on critical issues to other platforms, both in Russia and abroad.

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Securing Russia’s mission as a global power

The strategic goal of Russian diplomacy in the present century is to achieve unconditional recognition of the country as one of the poles of a multipolar world system, whose interests must be taken into account by other poles when making decisions that are important for global security and development. The SPIEF program fully reflects the desire of Russia to achieve this goal. All of the most significant problems faced today by the BRICS, the Shanghai Cooperation Organization (SCO) and the G20 can be found in the program.

According to the Kremlin leadership, the thesis that Russia has been a great power for more than two centuries already does not require any special proof. The SPIEF 2016 program will help the international community understand the Russian view on global problems, and ways to solve them.

Moreover, the agenda of the St. Petersburg Forum also reflects Russia’s vision of the priorities in the global political and economic system. Russia is acting together with countries of the Eurasian Economic Union, in close cooperation with partners in the SCO and BRICS, but at some distance from the U.S and the nations of the EU, as these may be both partners and opponents, able to inflict significant damage to the Russian economy.

Russia would like to go back to the level of relations with Western partners, which existed before the Ukrainian crisis. However, today in the Kremlin, and in Russia in general, people have a clear picture of the situation – within the next decade, this is impossible. The program of the upcoming forum in St. Petersburg reflects this view to the fullest.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.