SPIEF takes place in conditions of external isolation

Exhibition Hall of the St. Petersburg International Economic Forum-2022A photo: Anatoliy Strebelev
Photobank of Roscongress

Despite the war and sanctions, an economic forum is being held in St. Petersburg. At the current forum, mainly internal problems of the Russian economy are discussed.

The jubilee XXV St. Petersburg International Economic Forum was held in conditions of external isolation. Formally, the decrease in representativeness is small. In pre-COVID 2019, 145 countries were represented. Now representatives of 127 “countries and territories” have arrived, including Russia, informs Roscongress – including from the UK, China, USA, France, Italy, Germany and the Netherlands. The guest of the forum is Egypt. Attention attracted members of the Taliban government, as the organization is considered a terrorist organization and banned in Russia.

Stand of Egypt at SPIEF-2022A photo: Kirill Kazachkov|Kirill Kazachkov

Conceived as a showcase for Russia and a platform for discussing and negotiating international deals, the St. Petersburg forum managed only one of two tasks. For several years now, there have been practically no real agreements that would give an influx of foreign investment. More and more agreements of intent were signed, which did not go beyond the forum. But the loud statements of the participants and stands successfully conveyed optimism and confidence.

Stand of UCC Uralchem ​​JSC at SPIEF-2022A photo: Arseniy Kats|Arseniy Kats

This year, SPIEF participants are trying to show that nothing special is happening in the country’s economy and that war is not a reason to cancel the holiday. So, Rostourism presented a route to the places of rest of Russian President Vladimir Putin, though then clarified “Novaya Gazeta. Europe”, that “no one will let you into those very places. Just around.” At the stand of the Belgorod region, footage about the Belgorod airport, which has been closed since the end of February, was shown, along with the inscription “The geography of air transportation has been expanded”, drew attention RBC.

Project “Great Russian Wine” by SimpleA photo: Dmitry Andreev|Dmitry Andreev, Roscongress Photobank

Vladimir Putin, speaking at the forum on Friday, called Western sanctions “insane” and “thoughtless.” According to him, they did not reach the goal and did not worsen the state of the economy. And the “special military operation in the Donbass” did not affect the global price increase.

However, a number of economic problems are difficult to deny. The ruble exchange rate, which has strengthened excessively over the past couple of months, now poses a threat to Russia, since it is not beneficial for exporters. About it spoke Minister of Economic Development Maxim Reshetnikov.
Chairman of the Bank of Russia Elvira Nabiullina admittedthat Russia suffers losses in foreign trade: “Because our exports are at a discount, imports at a premium.” The view of exports as an “intrinsic value” that provides foreign exchange earnings, she said, needs to be reconsidered, because the incoming currency cannot buy imported goods.
But there is no unanimity among Russian officials here. Restricting exports for the sake of the exchange rate would be a strategic mistake, and the government, on the contrary, intends to expand the geography of export supplies in every possible way without harming the domestic market, declared to the Interfax agency, First Deputy Prime Minister of Russia Andrey Belousov.
In the face of sanctions, inflation and a strong ruble, Russia is going increase federal budget expenditures for 2022 by 13% (by almost 3 trillion rubles – this is about 50 billion euros at the exchange rate of the Bank of Russia). Federal budget spending for 2022 will amount to 26 trillion rubles (430 billion euros). The budget will become deficit (so far the deficit forecast is 2% of GDP). On his Russia cover can take money from the “piggy bank” of the National Wealth Fund, as well as in debt on the domestic market. The fact that the Ministry of Finance does not exclude entering the domestic borrowing market in 2022, told Russian Finance Minister Anton Siluanov.

Part of the additional costs is to support business and domestic demand. Thus, more than 20 billion rubles (333 million euros) will be given to support demand for cars, said Industry Minister Denis Manturov. And apparently, the revival of the “shuttle” profession (a term from the 90s for merchants who brought Turkish and Polish goods from shoppers for sale) should support the people who have been left without work: Anatoly Popov, deputy chairman of the board of Sberbank, proposed to allow the self-employed to parallel import, who said in in particular, that “everyone remembers how RAM for computers was carried in suitcases from Singapore.”

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