Highlights of this year’s St. Petersburg Economic Forum
ST. PETERSBURG, Russia — This year’s St. Petersburg International Economic Forum (SPIEF), the 13th version since its foundation, which took place on June 4-6 in Russia’s Northern Capital, was, expectedly, fully devoted to today’s pressing global issues and other recent negative developments, namely, the world economic crisis and its negative consequences and other related problems as well as different exit strategies from the current financial crunch and discussions focusing on the reformation of all the global economic institutions and the future forma of the new world financial architecture in the post-crisis era.
However, unlike in the previous years, the SPIEF-2009, in view of the current negative tendencies in national and in global economies, was not conceived by the organizers – the Russian government acting via profile ministries and departments – as an ‘investment’ but rather as an ‘intellectual platform’ for large-scale economic discussions on all issues concerning the depressing situations in today’s global business and the ways to rectify them. This, in parts, has helped explain the rather modest volume of contracts and memorandums of investment intentions penned during the forum, which contrasted sharply in comparison with the sums of similar investment contracts valued in tens billions U.S. dollars signed at the past forums.
Thus, commenting on the results of the forum, Russian Economic Development Ministry Elvira Nabiullina preferred to only ‘verbally describe’ the amount of investment contracts signed at this year’s forum, simply noting that transactions worth ‘some billions’ of U.S. dollars were concluded, without specifying the concrete sums or figures involved in the deals. This, indeed, is a deviation from traditions, as the announcement of the investment contract figures has always been the headliner of the main news disclosed at the ends of previous forums. For example, it was with huge pride that Nabiullina and other top Russian government officials disclosed the overall sums of investment contracts at the 2008 and 2007 forums, which totaled $14.6bln and $13.5bln, respectively.
In the absence of the desired investment news, participation turnout, another equally significant indicator of influence of economic forums of such international levels, was moved to the top of the news agenda at the final press conference. Here, it must be noted that SPIEF-2009 fully met the international grade, with over 3,500 participants from all over the globe in attendance. Specifically, the huge turnover included over 250 official government delegations, including five heads of states/governments, eight vice presidents/prime ministers, 26 ministers from different countries and 46 governors from Russia and abroad.
Beside foreign governments, local and foreign businesses were also heavily represented at the forum, evident in the over 500 CEOs and other top executives of leading domestic companies and over 400 world’s largest foreign corporations that graced the event with their presence. And, finally, both the Russian and foreign mass media, a constant attribute of forums of such international scale and level, also took an active part in the forum, with over 1,200 print journalists/TV correspondents providing comprehensive coverage of the forum. On the whole, over 83 countries were represented at the forum, according to the official data.
Naturally, such level of high-profile participation by world’s top politicians and business titans, especially on the background of a raging global economic crisis of an unprecedented scale, was seen as a ‘flying success’ by the organizers. The huge turnout was readily reflected in the speech of Russian President Dmitry Medvedev, who, by traditions, always presents the keynote address at the opening of the St. Petersburg forum. Expectedly, the president dedicated his speech to the prevailing situations on the global and Russian economies, the ongoing crisis phenomena and some of the best probable exit strategy scenarios from the present economic depression. Locally, he also dwelled on his ‘pet project issues’ of transforming the Russian ruble into a major international reserve currency, making Russia a global financial center and embarking on full diversification of the domestic economy with the ultimate goal of putting it on an innovative economy development trajectory.
The Russian president later explained the nearly impossible decision dilemma faced by both foreign governments and local and international investors and CEOs of Russian and global corporations at the beginning of the year on whether to remain at home and in offices in order to personally oversee the operative management of their countries/companies battling the global financial meltdown or take sometime off to attend the St. Petersburg forum. “At the end, most chose the second variant, and this is a good indicator of the collective wish of the all participants in global economic activities to take part in the discussion of key global issues, finding answers to the most complex international economic and financial questions, readiness to compare different countries’ national anticrisis programs, and finally, an obvious testimony to the fact that Russia still remains a highly attractive investment destination for global economic players.”
A similar view was aired by the Russian economic minister, noting that the quality of an economic forum depends not on how many people are in attendance, but their calibers, and who they are and represent. “All the important people were in attendance and this enabled all the issues scheduled for discussions at the forum to be fully discussed,” Nabiullina noted. “Specifically, the forum enabled us to deliberate on the various anticrisis economic stimulus packages adopted by different countries, which led to the understanding of the impossibility of exiting this global crisis one by one, on an individual basis, and hence, the urgent need for discussion and adoption of a joint exit strategy from the current economic downturn.”
One of the conclusions from such discussions was that about 75%, or an overwhelming majority, of the SPIEF-2009 participants, believed in the urgent necessity of reforming today's global financial architecture. More specifically, about 75% of world’s leading experts in the fields of global economy, politics and international finance said the existing world financial architecture will definitely not remain the same after the end of the current global economic crisis, according to data of the electronic blitz-poll of participants at plenary session, titled, Postcrisis Financial Architecture, which was held within the SPIEF-2009. Commenting on these poll data, Alexei Kudrin, Russian deputy prime minister, who also doubles as the nation’s finance minister, noted that the expectations of the titans of global businesses were normal and expected. “These poll results are quite natural, as each of those present in this hall today, and this includes both businesses and governments, has personally felt the full impacts of this current crisis.”
However, the main lesson that the St. Petersburg forum participants would have taken home, according to experts, is the caution expressed by the Russian president not to be excessively optimistic at this point in time because of the last good news indicating some ‘green shoots’ of imminent global economic recovery, such as some pundits saying that we have crossed the bottom of the crisis curve, nearing the end of the crisis and all other types of related/similar optimistic forecasts. “Russia, like most other countries, has for the past difficult nine months of crisis been able to achieve relative financial stability in its economy. But the volume of the yet-to-be-solved problems is, in monetary terms, still being measured in trillions, and this is irrespective of the leading global currencies used in such computations,” Medvedev noted. “Therefore, in my opinion, it is still ‘absolutely too early’ to uncork a bottle of champagne at this point in time.”
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