World Economy

Russia Seeking Financial, Expertise Input

Russia Seeking Financial, Expertise InputRussia Seeking Financial, Expertise Input

Russia’s economy is grappling with trade sanctions, deflated oil prices and difficult international relations—but as a high-level, three-day conference in St Petersburg which concluded Saturday shows, this gateway to 250 million consumers is still up for doing business, and so too are powerful interests in the West.

European Commission president Jean-Claude Juncker, Italian PM Matteo Renzi, UN Secretary-General Ban Ki-moon and former French president Nicolas Sarkozy were among the 7,000 attendees at the St Petersburg International Economic Forum, Yahoo reported.

Entrepreneurship, medium-term macro-economic strategy, Eurasian Economic Union and world energy markets were on the agenda, along with development of market infrastructure, high-tech industries and Russia’s regions.

As the guest list shows, this conference is more than Russian lip-service to economic openness. The country is actively seeking financial and expertise inputs.

Following steady growth averaging 3-5% from 2009 to 2014, Russia hit a recession which reached its nadir in Q2 last year with a 4.5% drop in GDP as the country hit a fiscal ‘perfect storm’ due to negative macro- and micro-economic events.

Predictably, this has had knock-on effects for Irish exports over the past 18 months. Figures for 2015 show a 55% drop compared to 2014.

But things look like stabilizing. President Putin appears serious about further opening up Russia’s 143 million-strong market to imports which will also help access to the 100 million people in the rest of the Commonwealth of Independent States.

“We must react more swiftly to the shifting demands of the market and to the looming transformation of the global technological landscape,” the Russian president said in his welcome message at the SPIEF-2016.

Russia’s energy-driven economy—hit by both the West’s punitive measures and the drop in oil prices—has slumped into the longest recession since Putin came to power some 16 years ago.

Despite claims from officials that the economy could return to limited growth soon, there are serious fears of a prolonged economic stagnation and the authorities are pledging much-needed structural reforms to attract investors.

“We need to change the structure of the economy to make it less dependent on external factors,” Russian Finance Minister Anton Siluanov told journalists.

“The strategic task is to generate higher rates of growth in the economy.”