Record investment contracts at St. Pet’s forum indicates global economy recovery

Dvorkovich further noted that some agreements provide for equities mergers and redistribution between Russian and foreign corporations. An example of these is the deals concluded between Gazprom and several French energy companies that envisage the participation of the latter in the realization of the Nord Stream and South Stream gas pipeline projects. The total amount of these agreements has been estimated at 120bln rubles. Moreover, several other contracts were signed, including so-called ‘Memorandums of Intentions or Understanding’ between different Russian corporations on one hand, and between Russian and foreign companies on the other. These contracts envisage placing large orders for different goods and services, some of which are to run for several years. The amount of these contracts also runs into several billion of U.S. dollars. “Consequently, the final total of all the investment agreements penned during the forum will probably be much higher, as a number of agreements did specify the sums involved or were signed as future contracts. Therefore, it is incorrect to just simply sum up these figures as the total amount of the investment contracts,” Dvorkovich added. 

This year’s forum also broke other records, both in terms of the number of participants, which exceeded 4,000 people, and the level of delegates’ authority: there were owners/CEOs of about 700 companies, which are leaders in their respective industries, national and global economies, as well as leaders of the world’s largest economic and political countries. All this made the forum a befitting event, as it provided a unique platform for thorough discussions of current issues as well as the new challenges facing the Russian economy in particular, and the entire global community as a whole. 

It, therefore, was not surprising that both Russian and foreign participants generously used only superlative epithets to describe the events that took place at the forum, notably, the sum and number of penned investment agreements and contracts. For example, the forum’s success had so impressed Valentina Matviyenko — the governor of St. Petersburg, the traditional venue for conference, thus making her the nominal hostess of the event — that she called it ‘stunning and unprecedented’ in the forum’s entire history. “The success of this forum is so grand that it beat our expectations and imaginations. It superseded all the previous forums in terms of the number of participants, level and organization, and has become the most productive in terms of the sum and value of concluded investment agreements.”

Medvedev sets the right business-style tone for the forum

Despite the fact that this year’s forum kicked off on June 17, it was, however, June 18 when the Russian President delivered a keynote speech on the Russian and global economies as well as measures taken by the leading countries from the G20 club to end the economic recession that marked the official opening. 

“The success of the forum is so grand that it beat our expectations and imaginations. It superseded all the previous forums in terms of the number of participants and their level and has become the most productive in terms of the aggregated value of the concluded investment agreements.”

As already stated, this year’s was held under the resonant slogan of ‘Laying the Foundation for the Future.’ Thus, speaking this topic with regard to Russia, Medvedev noted that the current situation in the world today brought about by the global crisis has presented Russia with a unique opportunity to occupy a worthy place on the global arena in the post-crisis era, calling the country’s steady course towards comprehensive modernization of its economy and innovative vector of social development of the entire society the vehicle for attaining these stated missions. “To bring modernization to its logical conclusion, a set of certain factors is needed. Some of them are already in place in Russia, while the others are being worked on,” he said. “Unlike most people who view this crisis as a disaster, we in Russia see it as an opportunity to change our country, reform our economy and fully modernize our society as a whole.” Indeed, such words as ‘reform,’ ‘change,’ ‘modernization’ and ‘innovation’ as well as other terms highlighting the acute need for overhauling Russian and global society, economy and businesses, ran through the president’s address like a red ribbon. 

Thus, noting that Russia has fundamentally changed, Medvedev also emphasized that today’s world does not look like it was five or even a year ago, thus, setting the productive business-like tone for all the brainstorming discussions on different sessions devoted to various branches of the Russian and global economies. “We see an improvement in the forum participants’ general mood, compared to what we saw a year ago. Although we still face problems, this time global business elite has come here with a completely different mood,” he said. And taking about global economy, the Russian president noted that what had previously been seen as unshakeable pillars of global finance have all collapsed under the weight of unprecedented financial problems and corporate defaults. “Liberalism in the world has given way to a moderate, and in certain cases, to even full-scale protectionism. Similarly, ‘flexibility’ and ‘adaptability’ have become more popular words today than ‘stability,’ ‘predictability’ and other anti-crisis expressions,” he added. “Not everyone is happy with this situation, but there is no going back to the previous, old order and the old development models.”

And, speaking about Russia and its future development plans, Medvedev noted that his strategic mission is to turn Russia into a flourishing country with high living standards, built not so much on raw materials that are traditional for Russia, but on new innovative resources, high-end technologies and other intellectual property resources. “This is because the end goal of our initiatives is to make Russia a country highly attractive for all people from all over the world, for them to come over to realize their dreams and make use of the great opportunities for success and self-realization that our country will offer to all, who are ready to accept this challenge to love and make Russia their new or second home,” he added. “These are the ultimate objectives of our modernization policies, and I am totally confident that these are realistic and achievable goals.”

Forum’s VIP foreign guests’ views and opinions

French President Nicolas Sarkozy summed up foreign participants’ collective opinion on the initiatives declared, planned and suggested and announced by key speakers and other delegates of the forum on how to further develop the Russian and global economies. Speaking at the final session as the forum’s most honorable guest, the French president admitted that the forum had so impressed him that he decided to put away his speech prepared by his aides and speak straight from his heart.

Sarkozy started by drawing attention to the Russian-French and Russian-European relations, saying that both Russia and EU states must join forces on a new basis because they are facing the same types of problems and challenges. “With regard to practically all issues, Russia and France are among countries that want to see the emergence of a new world order. We always do not perhaps have exactly the same views on every detail, but we do share the same general strategy. There can be different views within this strategy, but we are always ready to look for a compromise.” 

Thereafter, the French leader criticized the prevailing situation in the global economy, the reasons that led to it and also some measures implemented by governments in order to normalize their national economies and global financial markets in general. For example, Sarkozy said he was dead against any ‘special and preferential conditions,’ so-called ‘financial or tax havens’ for the financial sector in some countries’ economies in order to attract foreign businesses and investments. “Why do we need such tax havens? Why do we need to let our own banks make investments and open accounts in tax havens in other countries, where they can forget about all regulations?” the he asked rhetorically. “We have always fought and will continue to fight against enterprises from avoiding regulations via shifting their assets to tax havens.” 

The French president also criticized the investors and bankers that often use questionable speculative instruments on the financial markets to dupe financial services customers and undermine the stability of national and global banking systems. He further argued that the lack of joint and adequate regulatory impacts on investors in conjunction with poor national and global economic control systems adapted to the realities of the 21st century has led to the nearly full collapse of national and global financial systems during the current crisis. 

Sarkozy also turned the forum participants’ attention to the fact that the current crisis brought to light all the shortcomings in the economies of all countries, because almost all governments had to some extent suffered from the crisis either directly, or indirectly via the impacts of its negative consequences, and/or from both factors. “Today everyone can see that the pre-crisis operation mode of the financial markets, which in fact still remains in effect today, has proved its absolute inefficiency in this recession. In fact, any market operating without any clear rules will sooner or later fall hostage to speculations from dubious investors or other key players, and this in turn often leads to all kinds of bubbles in different sectors of the economy,” he said. “The lack of clearly formulated rules has led to the reign of speculation, rather than traditional free-market principles, and this has brought negative consequences for all,” he added. “When I am told that the market must regulate itself, I agree but on one condition, and that is such market should be based on production, and not on speculation.”

Ivan Svitek, Home Credit Bank board chairman, expressed the general opinion of the Russian and global business circles. “This year’s forum was much more productive, compared to the previous year’s event. Indeed, in 2009 neither Russia nor the global economic and financial community was ready to offer any specific ways to solving common problems. Moreover, they were not even sure about the success of the measures taken then,” he said. “While last year’s forum was restricted to joint recommendations of a general nature, this year’s forum offered specific projects and is characterized by much greater results and achievements,” he added. “In fact, the data on the gross volumes of penned investment contracts highlights the results of this year’s activities. In my opinion, this is how an economic forum of this status should end.”