SPIEF

Today, I was at the St Petersburg International Economic Forum, where I made a few contacts, looked around the stands (the busiest of which seemed to be that of Kalashnikov), and learnt among other things that St Petersburg is hosting four games in the UEFA Euro championship next year. The very nature of such occasions tends to be positive, as they’re attended by people wanting to do business with one another. Despite all the talk of Russia’s isolation, people of many nationalities were present. And despite the somewhat stagnating nature of the Russian economy, there was a lot of money on display, which contrasted rather with the poorer living conditions of ordinary people which my students and I saw on an outing later in the evening.

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While at the forum, I attended a couple of panel discussions. The first focused on US-Russia relations and included a somewhat upbeat presentation of the state of the Russian economy and Russian-US economic ties. US investment in Russia was rising again, we were told, though judging by the speaker’s graph it’s still well below what it was before 2014. The session contained a lot of encouraging talk of the desirability of dialogue and exchange, coupled with repeated acknowledgements that relations are plagued by mutual misunderstanding. Hope was expressed that meetings like this might help to reduce these misunderstanding, but as one delegate told me afterwards, that would take a lot of time. I tend to agree. Despite the current political troubles, it’s clear that there are people on both sides trying to improve relations, but as yet they’re not making much progress.

Of course, a certain amount of happy talk is to be expected at an event where the Westerners are self-selected non-Russia bashers. A bit more downbeat, however, was a panel I attended in which a bunch of Russian economists discussed how their country could reach the target declared by Vladimir Putin of making Russia’s economy the 5th largest in the world.

To my surprise, when asked, about half the audience raised their hands to say that they thought that growth rates of 5-6% were once again possible. (I am not so optimistic). But subsequent speakers (though I admit that I didn’t hear them all as I had leave early) were more sceptical and pointed to structural problems that made such growth unlikely.

One panelist, for instance, spoke of a fundamental lack of trust in Russian society as a hindrance to effective business. This included a distrust of business by the state. There were repeated complaints that businesses were under legal ‘pressure’ from the state. One speaker went so far as to make the politically9 impossible demand that the Russian Constitution be amended. The Central Bank and Financial Ministry had the wrong legal priorities, he said. They piled up money in the name of macroeconomic stability while having little interest in increasing incomes or promote growth. This seemed a little harsh, but there is perhaps something to the complaint that Russian economic institutions are extremely conservative. The extent to which such conservatism is constitutionally entrenched is an interesting question.

Overall, then, what I got from the SPIEF was that:

1. There are definitely elements in the Western business community who are keen on improving relstions with Russia. As there’s money to be made in the process,  that’s no surprise.

2. The Russians are capable of putting on a glitzy show and are actually pretty keen to patch things up with the West. The idea that they want to wreak chaos among us is decidedly odd. They clearly don’t.

3. Despite all that, the chances of Russia being able to obtain the rates of growth required to converge with the West aren’t very good in the short to medium term.

I’d be very happy to be proven wrong on that last one. We shall see.

 

12 thoughts on “SPIEF”

  1. “…there was a lot of money on display, which contrasted rather with the poorer living conditions of ordinary people which my students and I saw on an outing later in the evening”

    And in Canada it is somehow different? I.e. – the conditions at any international economic forum would be on par with the “poorer living conditions of ordinary people”? Or are you saying that there are no poor(er) people in Canada?

    Or maybe – maybe! – your students for the first time escaped their Ivory Towers of Western academia and saw other people of not exactly their “strata”? Well, in that case this is just a sign of what kind of sheltedred life they’d lead before – and which they’d undoubtedly continue to live afterwards.

    P.S. BTW, professor, on what, besides the gut feeling, do you base your conclusions?

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    1. growth vs stability from my limited perspective cannot ever be about that “strata” of society present no doubt anywhere. I do have only rudimentary economical expertise. Nevertheless. At one point in time, late 80s, 90s the overheard talks in my local university library seemed to have changed. A felt 80% seemed to be about economics. Maybe it tells you something about me that while registering it as a more general trend, one special encounter or overheard chatter remains on my mind, as central: A young lady asked her male co-student, what the hell sustainability could possibly mean. …

      Paul, does not tell us what panel it was. But based on a very, very superficial check it could be this.

      The Russian Economy Seeking Ways to Boost Growth
      https://forumspb.com/en/programme/68891/

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      1. From the “hot-take” article by a well known liberast Nikolas Gvosdev:

        “Observing the St. Petersburg International Economic Forum from afar,”

        Full stop – the wanker did not attend it, did he?

        “the adjective I keep returning to is “lackluster.””

        SPIEF 2018 – 17 000 guests from 143 countries, with the biggests business delegation being from the USA (550), followed by France (200) and Japan (177). Signed 593 contracts amounting for more than $40 bln.

        SPIEF 2019 – 19 000 guests from 145 countries, with the biggest delegationg being from China (nearly a thousand), followed by the USA (520) Signed 650 contracts amounting for more than $48 bln.

        Lackluster? By all awailible data the SPIEFs back in 2014 and 2015 could be named as such. But denying the facts on the ground “from afar” – well, that’s one good reason to replace journos with robots. Slava robotam!

        Gvosdev’s article is full of intense butthurt, over the fact, that Russia paid so much attention to China at the event (I expect the vitriol among Westie AgitProp brigade to rise in the unpcoming week). It also all emotions, dissing and no hard data – like your blogpost, professor.

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    1. It’s a good thing then, professor, that with this:

      “And despite the somewhat stagnating nature of the Russian economy, there was a lot of money on display, which contrasted rather with the poorer living conditions of ordinary people which my students and I saw on an outing later in the evening.” (c)

      you showed them that you are not a sell-out – you are a Rebel!

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  2. Professor: For sure many ordinary Russians are not living the dream life. Hey, that’s capitalism for you. But “what about” those Canadian citizens who are also not so well off? For example, the indigenous, “real” Canadians who are treated so shabbily by their government? A dreary life of poverty, alcoholism and exclusion, not even allowed to learn their own language in school, what kind of life is that?

    https://awfulavalanche.wordpress.com/2019/05/17/cultural-genocide-and-whatabout-part-i/

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    1. https://www.google.com/search?source=hp&ei=mtr-XKCtOc6KggfUjoe4Cg&q=fox+news+homeless+in+america&oq=fox+news+homeless&gs_l=psy-ab.1.1.0l9.1749.6072..7794…0.0..0.183.1106.16j1……0….1..gws-wiz…..0..0i131j0i3.kX6lWFtepQU

      In the category of defense spending, the US spends more than the next seven highest spending countries combined – as America faces challenges with its healthcare, infrastructure, environment and schools.

      I was thinking about that matter as chubby Nuland piously (at a recent stink tank gathering) brought up the notion that Putin’s increased unpopularity is attributed to a weaker Russian economy, in tandem with Russian foreign policy ventures in Syria and the former Ukrainian SSR.

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  3. I think the conservatism of Russia’s major government financial institutions is understandable but ultimately detrimental. For example passing an increase in VAT is regressive and more harmful to the economy than, say, instituting an income tax which might raise considerable revenues for the government. Whether or not that could be enforced is a different question, but given how Russian impressions of honesty in government have improved it is possible people would be more willing to pay higher income taxes if the money was used for tangible spending purposes.

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