The St. Petersburg International Economic Forum is not only the premier platform for discussing everything that matters in business and geoeconomics concerning Russia and the wider Eurasia.
It’s a privileged space where trends of the past, present and future are explored in detail: a microcosm of multipolarity at work.
The business program is usually an intellectual feast. It’s impossible to convey its breadth and reach in only a few lines, not to mention the exhilarating atmosphere of jumping from room to room in search of the perfect expose.
What follows could be regarded as a sort of incomplete Greatest Hits of the Thursday, June 15 sessions – packing enough punch to drive multipolarity-heavy debates for weeks if not months ahead.
The heavyweight-laden panel How The Russian Economy Will Develop featured Governor of the Russian Central Bank Elvira Nabiullina, Minister of Finance Anton Siluanov and top Putin aide Maksim Oreshkin.
The unflappable Nabiullina stressed now “inter-operability” will help “the Russian paying system to be integrated in the global system”. She remains in favor of “selected privatization”, keeping “confidence in capital markets”, and low inflation.
Siluanov was keen on the “need to change the paradigm”; the importance of the State creating demand; and the need to reduce subsidies. Macro-stability is important – “but we should not overdo it.” Oreshkin agrees: the government should get rid of assets “it does not really need”.
A De-Dollarization panel debated the plausibility of transitioning from the US dollar towards a “fundamentally new supranational currency, overseen by a broad consortium of states operating on principles of partnership”. That’s essentially what’s being discussed at the heart of both the Eurasia Economic Union (EAEU) and BRICS.
The future of Russia was at the center of the Horizon 2040 debate. Andrey Bezrukov, president of the Technological Sovereignty Exports Association and a professor at MGIMO, stressed how in 2024 Russia holds the chairmanship of BRICS: it’s time, right now, to “turn it not only into an alliance of equal partners but also a financial, technological and economic force.”
Alexander Dugin engaged in a stunning presentation, explaining paths towards development in parallel to how Russians should understand identity.
That led to an inevitable critique of ethnocentrism: “The West chooses itself as the only subject. It holds a system of values deemed to be universal – that everybody else must follow.” That’s “the West as the whole of humankind”, coupled with a drive to “de-subjectify the rest. The global subjectivity of the West is built in”. Dugin described it as “a virus”, developed “over centuries.”
Integration in the Global West, according to Dugin, “leaves Russia without a future.” Rather, Russia should declare the West to be “one force among several. Not an existential threat.” Russia can “proclaim itself as a sovereign state. Exercise a “mental de-colonization of society.” That’s how a “civilization-state that defines its own goals” should act.
Showing a diagram in three steps, “between red and lilac”, Dugin illustrated how Russia can perform the transition from “understanding itself in the Western world” towards “sovereign development.”
All about SCO, EAEU, ASEAN, INSTC, BRICS
Zhang Ming, the SCO-secretary general, and Bakhtiyer Khakimov, Putin’s special representative at the SCO, were particularly helpful in a panel that came with a game-changer: just like the BRICS, with its New Development Bank (NDB), the SCO is also working to create a development bank, integrated into an “open world economy” against sanctions.
The SCO secretariat in Tashkent already works as a forum for local and Central Asian governments. This is a true multilateral organization whose members are already responsible for no less than 2/3 of global trade cargo turnover.
Sergey Pavlov, First Deputy Managing Director of Russian Railways, made a key connection: SCO-INSTC. The potential of the International North South Transportation Corridor, he said, is “unbelievable”. He reminded everyone of Russia recently signing an agreement to build the “missing part of INSTC in Iran.” And he stressed how the strategic Kazakh-China border at the Khorgos dry port is ready for an export boom.
A much awaited BRICS discussion examined how different mechanisms may improve socio-economic sustainability. Enormous potential is to be explored by the African Continental Free Trade Area: 1.3 billion people, overwhelmingly young.
Alexander Isaev, an expert from the Directorate of International Transport Corridors, stressed the importance of “good quality logistic chains”. As foreign trade is fundamentally based on sea transportation, BRICS and future BRICS+ members will need to do their homework on “port infrastructure and road improvements”. Not to mention curtail red tape: “Companies spend 50% of total time in transit shipment. We need to speed up the process of crossing borders.”
A key question was posed: when there will be a “Made in BRICS”? Not before the “harmonizing of technical regulations”, as it’s already happening with “several groups” working between China and Russia.
An immensely important round table focused on the INSTC, with representatives from Iran, Pakistan and Azerbaijan as well as Evgenii Moskvichev, chairman of a Duma committee and one of the world’s leading transportation experts. The Iranian Minister of Transport, Mehrdad Bazrpash, was keen to stress that Iran carries “an enormous logistical potential.”
This Eurasia-Southeast Asia interlink carries immense potential in transportation, logistics, digital economy and of course payment systems bypassing the US dollar.
The indispensable Sergey Glazyev, the Eurasia Economic Commission’s Minister of Integration and Macroeconomics, had to be part of the discussion. Evgeny Zaganyov, Russia’s representative at ASEAN (they have a Jakarta office), stressed how the time is now to “set up ASEAN as a hub of global growth”; work towards a “joint tax environment”; and invest in transport connectivity.
All that within the crucial framework of “mutual settlements in local currencies”. The Philippines, meanwhile, is keen to bill itself as the ideal gateway for the EAEU to reach ASEAN.
The traditional Valdai Club discussion tried to concisely identify the new world already in its title: “The New World Economy: Not Global, but Interconnected”.
Russia’s First Deputy Prime Minister Andrey Belousov came up with a necessary short recap, pointing how the “great globalization beneficiary in the 1990s was China, which doubled its GDP.” But then, “by the second half of the 2000s the Americans started to dismantle the standards.” Protectionism became the norm.
Belousov does not “believe the WTO will come back to life.” He prefers to focus on the “new countries” who will be key players in the new world order: Brazil, India, Indonesia, Mexico.
He sees three possible scenarios ahead: a new “Pax Americana based on digital technology, protectionist, a closed Western club”, with the use of force basically regimented against China; a “regionalization around centers of development”, such as China, India and Vietnam; or “controlled chaos”, submitted to the food crisis and the water resources crisis.
Gong Jiong, from the University of International Business and Economics (UIBE), focused on what he defined as “The Great Re-Orientation”. China of course is at the center: its biggest trade partner is in fact ASEAN. In parallel, China trade with Russia increased 40% last year and it may reach “way more than $200 billion by the end of 2023”, with no less than 70% – and counting – settled in yuan and ruble. The Russian Central Bank already holds 40% of its reserves in yuan. Welcome to the multipolar currency world.
Eldor Aripov, from Uzbekistan, offered a precious Central Asian perspective. The cost of food imports is “considerable”; in many cases “trucks from Europe take 2 and ½ months to reach Uzbekistan – with transportation costs doubled.”
Still, Tashkent expects a hefty 5,5% growth this year. The least one can say is that the “Eurasian Balkans” prediction (by the late Zbig Brzezinski) collapsed. Uzbekistan is now focused on – what else – transportation corridors; via Afghanistan to South Asia, as well as the Chinese project of a China-Kyrgyzstan-Uzbekistan railway.
Belousov for his part noted that Russia is able to use no less than four basic corridors. Two are operational: the Eastern Corridor, developed for coal and now being restructured for fertilizers, and the Southern Corridor, via the Black Sea to Turkey.
The two developing corridors are the North Sea Route – shorter and faster by two weeks compared to Suez – and the three branches of the INSTC: East, to Kazakhstan and Turkmenistan via Iran; the Trans-Caspian – with Astrakhan as the main port via Iran to the south; and the
Western corridor – also an alternative transit to Suez.
Not surprisingly to make it all work, like clockwork, requires “a lot of investment and political stability.”
Benedict Weerasena, from the Bait al-Amanah think tank in Malaysia, introduced a youthful, cheerful, optimistic element to the proceedings, stressing how ASEAN’s GDP per capita, congregating 690 million people, is “way higher than the global average”. He waxed lyrical over the rise of the ASEAN Monetary Fund (AMF), stressing how “regional bodies need to fight the supremacy of the IMF. AMF is not just a dream.”
Arvind Gupta, from India, engaged in a sharp critique of the weaponization of technology and financial systems, as well as the weaponization of supply chains “being forced into nations. He came up with a neat formulation: “The current system promotes either technology for profit or for surveillance.” India tries to “promote technology for good, for development.”
So that was only a sample of a full day of discussions at the forum. Nothing remotely similar, and digging so deep, takes place anywhere across the collective West. Welcome to St. Petersburg as a true capital of the emerging multipolar world.
Pepe Escobar, Eurasia-wide nomad geopolitical analyst, @RealPepeEscobar