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Experts say foreign business’s wide participation in economic forum means Russia’s success

June 18, 2015, 19:10 UTC+3 Alexandrova Lyudmila
© Sergey Fadeichev/TASS

MOSCOW, June 19 /TASS/. Foreign business’s wide participation in the St. Petersburg International Economic Forum (SPIEF) that opened on Thursday testifies to Russia’s success amid negative international developments, experts say.

The Committee of Permanent Representatives of the EU member states took a decision on June 17 to extend the sanctions imposed against Moscow over its stance on developments in neighboring Ukraine for another six months. Foreign investors stand against the anti-Russian sanctions but are unable to exert sufficient pressure on their governments.

The St. Petersburg International Economic Forum will bring together representatives of 114 countries compared with 62 last year and 900 heads of companies (slightly over 600 in 2014) and a solid US representation of 12 heads of American firms, Russian presidential aide Yuri Ushakov said on Wednesday.

The St. Petersburg International Forum is attractive for foreign business because Russian assets have become very cheap, analysts say.

"Those who stayed aside now want to take the risk," Russian business daily Vedomosti quoted an employee of a global investment bank as saying.

According to a poll conducted by EY among the heads of western companies working in Russia, only 15% believe that the macroeconomic conditions in Russia have deteriorated significantly for them in the past year, Vedomosti said.

However, the poll shows that these conditions have deteriorated insignificantly for 59% of the respondents and have not changed at all for 15% As many as 39% of the respondents have plans to expand the geography of their companies’ presence and only 3% have decided to put investment projects on hold.

"I’m going to the forum to confirm once again that Italian investors will never quit Russia," Vice-President of the Italian-Russian Chamber of Commerce Vincenzo Trani told Moskovsky Komsomolets daily.

It is exceptionally profitable to invest in all the BRICS member states (Brazil, Russia, India, China and South Africa), he added.

"Business taxation in Russia is much milder than in Europe and the United States. Your market is huge and has a lot of vacant niches, which entrepreneurs can take up, if they get our investment," the Italian business representative said.

According to Trani, Italian entrepreneurs are struggling against anti-Russian sanctions, which are "foolish."

"We, both the Italian businessmen and the parliament, are pressurizing our Cabinet of Ministers and demanding that it should speak for the sanctions cancellation but we have to be realists," he said.

"We have showed that we are not in isolation. Foreign business’s interest in the forum is already a success by itself," Deputy Head of the Faculty of World Economy and World Politics at the Higher School of Economics Andrei Suzdaltsev told TASS news agency.

‘They expected our economy to collapse already by December and the fact that we have been able to withstand this is perceived by them as a success," the expert said.

As for the western business’s possible pressure on politicians to make them cancel the anti-Russian sanctions, these possibilities should not be overestimated, the expert said.

The participation of foreign businessmen in the SPIEF is so far a weak but still a positive signal," Director of the Center for International Trade Studies at the Russian Presidential Academy of the National Economy and Public Administration (RANEPA) Alexander Knobel said.

"Business interests are present compared with what was a year ago, the situation in the Russian economy has stabilized and trade is developing. But this will hardly help cancel the sanctions. Business will obey their governments," the expert told TASS.

This is very significant that the number of the SPIEF participants has grown, Associate Professor at the Chair of World Economy and World Politics at the Higher School of Economics Natalia Karpova told TASS.

"The entire global economy is now living through quite difficult times and everyone is looking for alternative opportunities while Russia is not the worst player in the world."

The Russian site is very interesting, she said. Russia occupies one-seventh part of the Earth’s surface, boasts the world’s second largest freshwater reserves and accounts for 12% of global primary energy resources while constituting 2% of the world’s population. Besides, Russia remains an important player on the world scene, despite all complexities, the expert said.

"Business uses all baskets for putting eggs and, therefore, will not ignore the Russian basket," the expert said.

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