Future-Oriented Geo-economic Deliberations St Petersburg International Economic Forum 2019

By Elisabeth Hellenbroich

A highly successful conference took place in St Petersburg (SPIEF June 6-8). The Conference gathered several thousand economic and strategic experts from around the globe. Noteworthy was the plenary session which featured as speakers Russian President Putin and Chinese President Xi Jinping, UN General Secretary Antonio Guterres aside Armenian Minister President Paschinyan (Chairman of the Eurasian Economic Union presently), the Slovak Minister President Pellegrini (EU member country) and Bulgarian Minister President Radov (EU).

There were several leading German representatives who at the sidelines of the conference expressed hope that more efforts should be made to build a constructive relationship with Moscow. For example Saxon Minister President Kretschmer, who had stated that for centuries they have had relations and energy partnership with reliable raw materials deliveries, “therefore we must do everything that Russia keeps its European orientation.

We must end sanctions and I hope very much that the two sides come close to each other again.” His statement drew a lot of criticism from leading German representatives, especially from the side of former German Ambassador to the US and present chairman of the Munich Security Conference Dr.Wolfgang Ischinger. Ischinger seemed to have gotten such a fit of anger that he advised Kretschmer per Twitter to “hire an adequate foreign policy advisor.”

Emanuel Macron: We need a strategic dialogue with Russia

 Such criticism stands in sharp contrast to what French President Emanuel Macron had told in a recent interview with RTS Radio Television Suisse (11.06.19) in Geneva. He stated that “in this multilateral order which I defend, Europe must write a new Grammar of Trust and Security with Russia”, which given its history and culture, is part of Europe. He strongly urged that despite Crimea we need a “strategic dialogue with Russia” and announced that he in the context of France chairing the G7 and of his upcoming meeting with President Putin he was going to discuss this issue of strategic dialogue. It seems that Macron has a better strategic understanding than some German representatives, about what is at stake at present in terms of European Security and Politics and that he correctly perceives where Europe will end up if it gives in completely to Trump’s sanction mania as well as to his devious maneuvering games in the Mideast.

Plenary Session with Putin and Xi Jinping at SPIEF Conference

Thanks to the SPIEF website and Tass news agency, there was  broad coverage of the 23^rd  St Petersburg International Economic Conference, that took place  in the huge Congress Center of St Petersburg under the Motto “Creating a sustainable development Agenda.” Founded in 1997, the conference this year according to presidential advisor and executive Secretary of the SPIEF organizing Committee, Anton Kobyakov, was highly successful. As he underlined, the Forum was attended by 19.000 participants from 145 countries including 1300 at the level of top leaders as well as 74 Heads of state, including Chinese President Xi Jinping. The largest delegations were the 1073 Chinese delegates followed by the US with 520 delegates. Kobyakov spoke about 650 agreements which the Russian government signed – worth $47,81bn (or 3.1 trill rubles) this includes the ones that are not commercial secrets.

One of the main foci during the forum was the discussion which took place with the Chinese delegation and the meetings between Chinese President Xi Jinping and President Putin. In the prelude to the forum Xi Jinping had given an interview to the press agency Tass in which he was asked about his previous “One Belt one Road Forum for International cooperation” (BRF) and how he would see the future of the Eurasian Economic Union (EAEU) and as well as the Shanghai Cooperation Organization (SCO) . Xi Jinping referred to the fact that in “May 2015, President Putin and I signed a Joint Statement on Cooperation on Joint Silk Road Economic Belt and Eurasian Economic Union Projects, kicking off the process to connect the two initiatives (…).” He emphasized that China will work with Russia to advance negotiations on the Eurasian economic partnership agreement and contribute to the prosperity and stability of our region. Concerning his personal relationship with President Putin, Xi Jinping answered that (since 2013) he had “closer interactions with President Putin than with any other foreign colleagues” calling Putin his “best and bosom friend” and that his engagement with President Putin is built on high degree of mutual trust.

Aside shouldering the same historical responsibility for the countries’ development, he emphasized the strategic significance of the China- Russia relationship. Aside efforts that are being made to bring the trade volume between Russia and China to a higher level and promote high quality development of bilateral trade, he stated, that “our two countries are steadily implementing major cooperation projects in energy, transportation, agriculture,  aviation, space and other fields.” In reference to specific regional cooperation, he underlined that “the two sides have signed a Plan on Cooperation and Development in the Russian Far East Region (2018-24) and a Development plan for Agriculture in Northeast China and the Russian Far East and Baikal Regions.”

In terms of China’s and Russia’s strategic role for the present world he specified  that  both countries see the “JCPOA” (Joint Comprehensive Plan of Action) agreement with Iran as an “embodiment of multilateralism and crucial for the international nuclear non- proliferation regime and for peace and stability in the Mideast.” He announced that China and Russia will stay in close coordination to push for “positive developments while upholding the authority of the UN.”

President Putin’s address to the SPIEF plenary session

In an overcrowded conference hall Russian president Putin used the plenary session together with President Xi- Jinping and UN General Secretary Antonio Guterres to speak about the multiple strategic and economic challenges which the Global Economy is facing at present. While the “ architecture of the global economy has changed dramatically since the Cold War as new markets were becoming part of the globalization process,” the Western liberal Euro-Atlantic model had a universal role. “International trade was the main driver behind the current globalization model. From 1991 to 2007 it grew more than twice as fast as global GDP. This can be accounted for by the newly opened markets of the former Soviet Union and Eastern Europe, and goods pouring into these markets.” Yet he also pointed out that “the outbreak of the global financial crisis of 2008-2009  not only exacerbated and revealed imbalances and disproportions, but also showed that global growth mechanisms were beginning to fail” and he noted that the global economy had entered a period of trade wars and mounting direct or covert protectionism. Those states “that previously preached the principle of free trade and honest and open competition, have begun to talk in terms of trade wars and sanctions and resorted to undisguised economic raids with arms twisting, intimidation and the removal of the rivals by so called market methods.”  He used as example the conflict around the construction of the second Nord Stream 2” gas pipeline (from Russia via the Baltic sea to Germany) and  the complete freak out which this project has provoked. In a clear allusion to the US, he stated that they “are used to letting others pay their bills, endless attempts to torpedo this project are made. It is alarming that this destructive practice has not only affected traditional energy, raw materials and commodity markets but it has also leaked into new industries that are now taking shape.”

One of the big challenges for the global economy is according to the Russian President an increasing “gap of disparity” where “today more than 800 Million people around the world do not have basic access to drinking water and about 11% of the whole World’s population is under nourished.” He also spoke about the need to address the exacerbating environmental and climatic changes that represent a direct threat to the socio-economic well- being of all humankind which make the crisis worse. Climate and the environment have become an objective factor in global development, a problem fraught with large –scale shocks, including another uncontrolled surge in migration, more instability and undermined security in key regions of the planet. He reminded as well that Global Financial Institutions were created as part of the Bretton Woods system 75 years ago, but that “new economic centers have appeared since then, the role of regional currencies has increased.”

Two possible scenarios for further development were outlined: The first is the degeneration of the universalist globalization model and its turning into a parody, a parody of itself, where common international rules are replaced with the laws, administrative and judicial mechanisms of one country or a group of influential states. “I state with regret that this is what the US is doing today when it extends its jurisdiction to the entire world. Such a model not only contradicts the logic of normal interstate communication and the shaping realities of a complicated multipolar world but most importantly it does not meet the goals of the future.” The second scenario is a “fragmentation” of the global economic space by a policy of completely unlimited economic egoism and a forced breakdown. “This is the road to endless conflict, trade wars and maybe not just trade wars. Figuratively this is the road to the ultimate fight of all against all.”

One of the first priorities for Russia is according to the President to become “one of the world’s top five economies“, following as national goals “the growth of the economy and people’s incomes, decreasing poverty, increasing life expectancy, improving education and healthcare, and preserving the environment.” The second field is accelerated technological development  in particular in the field of “Artificial Intelligence,”  given the fact that world market of goods with AI will increase almost 17 fold by 2024 to total around half a trillion dollars. He emphasized several comprehensive projects that are being implemented now in the south of Russia, the Far East and in the Arctic: “Today we must think about the upsurge of the vast territories of central and eastern Siberia. We must draft accurately, calculate and coordinate a development plan. This macro- region contains a very rich natural resources, about a quarter of all forest reserves, over half of the coal reserves, substantial deposit of copper and nickel, and tremendous energy reserves many of which have already been developed.” Aside seeing unique opportunities for agricultural development, he added that “the development of areas in central and Eastern Siberia, not as a raw materials base, but as a scientific and industrial center should turn this region into a link between the European part of Russia and the Far East, between the markets of China, the Asia Pacific Region and Europe, including Eastern Europe, and attract a well trained work force.”

Meeting leaders from Europe  

There were many high level meetings that took place at the St Petersburg Forum: this included a meeting between Russian and Chinese officials, as well as meetings with high level representatives from Germany, Italy, France, USA, Switzerland, Sweden et al. Noteworthy during the plenary discussion was the outline given by UN General Secretary Guterres who emphasized  the necessity for sustainable development,  underlining that 40% of the world population today are younger than 30 years and that a lot of education was necessary.

By referring to the UN Agenda 2030, he emphasized that the need for infrastructure and energy is going to expand, due to “population growth and urbanization in the Global South where some 60 percent of the area that is expected to become urban by 2030 has yet to be built.”

German representatives discussing about need for “strategic dialogue” with Russia

In St Petersburg there was a meeting about German- Russian relations, moderated by Professor Dr Klaus Mangold, long- tem chairman of the Ost-Ausschuss der deutschen Wirtschaft. Mangold emphasized that the sanctions didn’t yield the results that the West had intended and stated that there are in the world a lot of other subjects on which Russia and Germany should cooperate and that “Germany and Russia belong together.” German Economics Minister Peter Altmaier, who in the context of his attendance at the SPIEF Congress had inaugurated a Mercedes Benz production site in Moscow, stated that it was necessary to “intensify economic relations.” (Hartmut Hübner in the website www.russland.capital 08.06.19). He spoke about the need to reach a new efficiency in cooperation in different economic fields, such as digitalization, technical regulation, as well as medium size industry, education and energy supply: “These relations have a geostrategic importance for all of us, for Russia as well as for Europe and Germany.”

Altmaier spoke about a “Euro – Asian Space of prosperity” which should be based on “political stability.” He expressed hope for the continuation of the Minsk process and identified the “restrictions on enterprises and citizens of third states through the US (a reference to the new CAATS sanction law by the US against companies that participate in implementing the Nord Stream 2 project) “worrisome from the standpoint of international law (…) Germany will stick to the construction of Nord Stream 2 in the framework of what legally is allowed. Russia remains for us a strategic partner in all areas.” Former German Chancellor Gerhard Schröder, chairman of the board of Nord Stream 2, stated during a breakfast keynote at the St Petersburg Conference that Nord Stream 2 could be put into operation in the end of the year already in order to ensure safe deliveries of natural gas to Europe.

Danish policy has been however putting at risk the timely completion of the project, which in Schröder’s opinion “is certainly related to political pressure by the United States and Ukraine, and I can say this frankly.” This Danish stance against partner countries like Germany and the European Union “impedes sustainable deliveries of gas to Europe and contradicts the existing European legislation.” The chief executive of the energy company Wintershall DEA, Mario Mehren, from his perspective,  emphasized that “ Russia also in the future will remain the most important energy deliverer for Germany .This is extremely important and we cooperate since years successfully.” He added that “we in Europe could never realize our climate goals without Russian gas, for example exit from coal. The energy project Nord Stream II is enormously important.  Every day it proceeds and we build kilometers of pipeline. I understand that some European countries like the project less, but in the end it is our common European project.”