Economic Forum in St. Petersburg – Russia’s failed attempt to regain credibility

Amid increasing impact of international sanctions on Russia's economy, Kremlin is struggling to replace the agenda of the world mass media and to put a brave face on a sorry business.

In March 2014, a “G8” (by that time actually “G7”) Summit in Sochi has not taken place despite strong statements by Russian President Vladimir Putin. Representatives of the most developed countries of the world did not appreciate neither host party appeals, nor the organization of the event in the Olympic city, nor the Kremlin master’s assurances that the forum was set to be held in any case.

But Russia’s annexation of the Crimea, the violation of all existing norms of international law and the growing aggression against Ukraine were estimated at its true worth. In this regard, refusal of the “G8” members to come to Sochi became the first loud and weighty political reaction of world leaders at the policy pursued by the Russian Federation.

The Kremlin is actively preparing for the St. Petersburg International Economic Forum / expoforum.ru

Now Putin's team is actively preparing for the St. Petersburg International Economic Forum (SPIEF), without losing hope for rehabilitation in the eyes of the world community, and at the same time, continuing foreign policy excesses. The forum is scheduled by the Kremlin on May 22, 2014.

Building trust

Of course, this annual event has great importance for Russia. It is noteworthy that the only Ukrainian president, who participated in such Forum before, was Viktor Yushchenko, who attended the event in 2007-2008. This year, heads of major Russian and foreign companies, politicians and public figures are invited to the Forum. A main purpose of the event and its participants is a resolution of issues in the world economy and international business, including ones orchestrated by the Russian participants of the summit (their group is the biggest), an improvement of economic conditions of doing business and investment environment in the Russian Federation.

Organizers offered to talk about trust / expoforum.ru

Under current conditions, when a series of economic sanctions against Russia and Russian officials (also, the highest-ranking ones) are being imposed, the Forum promises to be interesting. The surprises started right from choosing the theme - "Building trust in an era of change". Summit organizers ventured to invite participants to talk about trust, while trustworthy relationship in economic or political domain is hardly possible with the Russian authorities, who showed in recent months their true face.

Especially, if one remembers the words of the Russian president that "only working together, taking into account the mutual interests and increasing constructive communications tested for decades, the international community can move forward to ensure continued global growth." In light of recent events such statements seem more than a bit odd. At the same time, it is clear from the statement of Vladimir Putin to the SPIEF participants that Russia is already sufficiently aware of its plight and scrambles to fix it, but not to fix itself.

Despite the costly preparations for the Forum (it’s estimated cost for the Russian treasury is around USD1,325 mln), Russia’s desperate attempt to regain status of a reliable partner in international economic relations is unlikely to be crowned with success.

The Forum’s status drops from "World " down to "Asian"

Merkel refused to go to the Russian forum / REUTERS

Official data from the Russian Ministry of Economic Development show that a third of the participants did not accept the invitation. Most participants who refused to take part in the event are from the United States, followed by the ones from the UK and Germany. However, the German delegation still attends the Forum, but German Chancellor Angela Merkel refused to come to the northern capital of Russia. Thus, she only emphasized that she respects the interests of German business representatives but in the current circumstances she does not consider it possible to personally attend the event organized by the Russian Federation.

Representatives of France, Canada, Austria, Japan, Sweden, Belarus and Kazakhstan also didn’t confirm their presence to the Russian Forum. In that way most of the countries expanded their sanctions against Russia and once again decided to demonstrate that disregard of international law can be too costly for the Kremlin and for the Russia’s population, which, it seems, Moscow thinks the least about.

One more signal of Russia's policy rejection on the part of the international community is that there are more than enough CEOs of the world market giants, working closely with the Russian Federation, are among those who refused to participate in the Forum organized by the Kremlin. So, in the list of the ones, who refused to participate, are: ExxonMobil, Chevron, PepsiCo, Siemens, Airbus Group, Visa Inc., the investment bank Goldman Sachs, one of the largest oil and gas companies ConocoPhillips, aluminum giant Alcoa, International Paper Company, Citigroup, and Morgan Stanley.

It’s likely that the President of the European Bank for Reconstruction and Development (EBRD) will not go to St. Petersburg Economic Forum, which stated earlier that he would likely ignore the event. It is expected that the head of Ernst & Young Global, Ltd. Mark Weinberger will do the same as the EBRD President. To date, Weinberger only officially refused to address the participants of SPIEF.

Naturally, the list of registered participants of the Forum is more than impressive but, due to refusal of the main world players, the Forum will be mainly Asian and Arab, and this eliminates its "World" status.

Russia demonstrates double standards

What can Russia offer its SPIEF participants? Besides welcoming and costly reception, it surely offers communication with representatives of the Russian government and business elite. Participation in the Forum of the Head of "Rosneft " Igor Sechin looks particularly "attractive". Representatives of European companies do not have the right to get in direct business contacts with him due to personal sanctions against this official.

Head of "Rosneft " Igor Sechin / Wikipedia

List of participants from the Russian part is truly diverse and rich in well-known persons. In this context, ever more experts sneer about the "international" status of the Forum. The event, organized for Russian businessmen, managers and politicians and paid for by Russian state employees and taxpayers has the proud designation of "presidential".

Of course, the Forum is an honorable and a more than responsible mission. But a burden of responsibility may become unaffordable for the Russian Federation. The statement of Vladimir Putin to the Forum says that "Russia is ready to expand multifaceted contacts with all partners on the basis of genuine equality and respect for each other's interests."

Meanwhile, the present Kremlin government has already proven that "equality" and "respect" are nothing more than slogans which are very advantageous to apply only from time to time.

Russia lost its status as a reliable partner for a long time/ REUTERS

Such double standards expose Russia in a bad light with the world's business elite. Russia's long-term way to achieve a stable partner reputation in the world market is hopelessly interrupted. The extreme unreliability in connection with a new wave of sanctions, aggressiveness in foreign policy, predatory militaristic grin, ignoring international law and blatant disregard of public opinion are placed in the forefront.

Yevgeny Matyushenko , Aleksandra Zasmorzhuk

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