Forum Tipped to Be Bigger Than Ever
By Boris Kamchev
Special to The St. Petersburg Times
As St. Petersburg braces itself for this weekend’s 12th International Economic Forum, its organizers are determined to make the event live up to its nickname of “a second Davos” amid the increased presence of the world’s leading politicians, economists and business tycoons who will gather to discuss the future and potential of Russia’s booming economy. As one of the world’s biggest emerging markets, with great geopolitical and economic ambitions, in recent years Russia has established the forum as a supreme showcase of the country’s vast and diversified business potential. At a recent meeting of the forum’s planning committee, organizers confirmed that the government wants the St. Petersburg event to become the main international event for discussing the most important contemporary economic challenges. “This is our aim,” said Elvira Nabiullina, Minister of Economic Development and president of the committee. German Gref, the former Economics Minister who now heads Russia’s largest state-owned bank, Sberbank, last year pledged that the next forum would cover an “even wider range of topics and be even more informative.” Nevertheless, the volume of agreements and protocols signed during the last forum — worth a staggering $13.5 billions, half of which were private direct investments — showed that the summit’s focus is Russian issues, including the boom in foreign investment, risks and competitiveness accompanying it, the future of doing business in Russia and challenges faced. In 2007, the general mood in the international business community was one of excitement about the opportunities in Russia. “The business environment in Russia is absolutely fantastic. Many companies rate this market number one in the world. Russia is much better than China and India, sales and opportunities are very good, due to top quality products with top quality prices,” said Daniel Thorniley, Vice President of the Economist Group in an interview in February at a Moscow conference of Economists. Since last year, the St. Petersburg forum has become global, judging by the list of participants. According to the committee’s final records announced at a press briefing, the summit is expected to welcome official delegations from 120 different countries and almost 1,000 representatives of domestic and international business, along with an estimated 180 CEOs. In total at least 8,000 guests will attend and dozens of agreements worth billions of dollars are expected to be signed in the presence of President Dmitry Medvedev and top government officials. Only time will show if the St. Petersburg forum can truly overtake the multinational World Economic Forum (WEF) in Davos. The annual talks in the Swiss Alps are based on different summits numbering about 200 sessions, usually attended by around 800 leading global CEOs and official delegations from most nations, who meet to discuss global and European challenges. However, the partnership between the two forums has become closer since the WEF decided in 2006 to support the St. Petersburg event with their new concept of organizing CEO roundtables, which are designed to facilitate in-depth interaction between the CEOs and highest government officials. Felix Howald, Director for Europe at the WEF, last year compared the two summits to brothers. Speaking on the Russia Today television channel during the event, he said, “We are the older brother that has existed for 37 years, but these two brothers can work together perfectly well and should cooperate.” The St. Petersburg Economic Forum has been held annually since 1997. This year’s Russian CEO roundtable is crucial because many of the 180 leading global CEOs are expecting to meet Medvedev and influential government heads. Among the CEOs due to meet the president are BP’s Tony Hayward, Shell’s Jeroen van der Veer, Chevron Corp’s David O’Reilly, PepsiCo’s Michael White, Cargill’s Greg Page, JPMorgan’s James Dimon and Intel Corp’s Craig Barrett. Christopher Weber, Associate Director and Head of Europe and Central Asia at WEF, emphasized the significance of these meetings for the Russian economy. “The issues that are going to be discussed are foreign direct investment, corruption, corporative transparency and energy security. All these contemporary topics will be raised informally with Russian top officials,” he said in an interview via email, adding that this year the organization of the Russian CEO Roundtable has been planned with Nabiullina. The St. Petersburg forum is a symbolic moment for Medvedev. His major international debut to the business world comes about 3 months since he was elected in March. Many expect his opening plenary speech, “National Economic Interests vs Global Governance Institutions” to provide some insight into Russia’s economic development under his rule and his vision of the future role of the Russian economy in the global market. The new government, headed by former president Vladimir Putin, has to tackle the complex problem of the country’s entry into the World Trade Organization; the question of the diversification of the economy, developing infrastructure, reforming the pension and health care system, interregional and global trade, secured energy supply, global financial risks and inflation. According to analysts, these are the key economic challenges that must be solved under the auspices of the Medvedev presidency, implementing the government’s optimistic scenario of making the country one of the five most developed economies in terms of GDP by 2020. These topics are certain to be discussed at both the International and Russian days of the forum’s varied program. Top experts who will moderate some of the conferences will include Lionel Barber, Chief Editor of the Financial Times, and Jim O’Neill, Managing Director and Chief Economist of Goldman Sachs, author of the BRIC concept. At a briefing, Gref said the forum’s program reflects the most difficult problems that the world economy is facing today. “The world economy has presented us with two basic challenges: market globalization and the need to protect national economic interests. If earlier we were faced with difficulties in exporting energy, then now it seems that we have the same problems in other sectors as well, for example in the export of food production.” First Deputy Prime Minister Alexei Kudrin and Nabiullina are expecting to speak at Sunday’s plenary session, “SWOT Analysis of the Russian Economy — Global Challenges and Opportunities through 2020,” discussing the strengths and weaknesses of the domestic economy and the country’s economic policy, to show Russia as a reliable and trustworthy partner. Unprecedented in scale, the forum has a total budget of 700 million rubles ($30 million) — about 30 percent more than last year’s budget, according to the organizers. Part of this sum has come from the Russian business community. Sberbank and state energy giant Gazprom are the forum’s main sponsors. Last year an entire new complex covering more than eight square kilometers was built at Lenexpo to host the forum, equipped with cutting edge lighting, sound, huge screens and communication systems. The state is clearly determined to put the St. Petersburg Economic Forum on the map and present a real rival for its Alpine sibling.
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