The 20th International Economic Forum in St. Petersburg has kicked off. Political and business leaders have come to sign new contracts and agree deals. RT.com will keep you updated on the main events.
18 June 2016
Russia's Mir (World) payment system is a young and ambitious project aimed at protecting the interests of the Russian people, which is certain to occupy a worthy place among other payment systems this year and then assume a leading role, Sergey Radchenkov, sales manager of the National System of Payment Cards (NSPC), said in an interview with RT.
“We will start in Russia and then we will go global,” Radchenkov said.
The card is to perform a wide range of functions going beyond financial services to welfare and transport spheres and loyalty programs.
The EU leadership has to realize that sanctions against Russia are an “absurd mechanism” that does more harm than good, said the CEO of French trade and services firm CIFAL, Gilles Remy.
However, Remy said he was not optimistic about the sanctions being lifted in the near future. “I think that due to the ineffective work of European institutions, a consensus will remain and some countries, that are peripheral from the economic point of view, will make sure that the sanctions are renewed,” Remy told RT.
17 June 2016
Italian Prime Minister Matteo Renzi urged Europe and Russia to make an effort to restore their relationship.
“It is obvious that there are some problems in the Europe-Russia relationship, and it is clear that each of us has good reasons to think about the past, about why these problems occurred,” Renzi said.
Rosneft has agreed to sell a 23.9 percent stake in oil producer Vankorneft to a consortium of Indian companies. The deal is expected to be closed after getting governmental approval.
Vankorneft is a subsidiary of Rosneft and was set up in 2004 to develop the Vankor oil and gas condensate field in north eastern Siberia. The Vankor field is the largest oil and gas field discovered and brought into production in Russia in the last 25 years.
Russia is ready to again cooperate with Europe, says Vladimir Putin.
“We do not hold a grudge and are ready to meet our European partners halfway,” the president told the forum.
Putin pointed out that the EU remained a key Russian partner, despite the recent problems.
“European business is willing and is ready to cooperate with our country,” he said stressing that Russian authorities are not indifferent to the European economy.
By 2026 China's Alibaba e-commerce platform will be able to deliver goods worldwide within 72 hours, company founder Jack Ma said at SPIEF.
READ MORE: Alibaba to double turnover to over $900bn by 2020
“In ten years the world will make orders online and receive them within 72 hours. This is what I want to do,” he said, adding “I believe that in 20 years there will be no cash, and society will be transparent. There will be no corruption, because cash leads to corruption.”
Many investors from different parts of the world attending the forum are a good sign, says UNECE Executive Secretary Christian Friis Bach.
“And here I think the companies are voting with their feet and their minds and their actions and they are telling us ‘we need to cooperate, we need more economic integration across borders and we need investments across borders, we need more trade, we need more transport, we need more transit and more tourism’,” he told RT.
Mr. Bach added that it was a good sign for the UN as well, as the organization aimed to provide help states cooperate.
Lukoil is in talks with Shell and Total over jointly working in Iraq, CEO Vagit Alekperov told TASS.
“We are discussing changes to our contract to expand beyond the West Qurna-2 oilfield… We are in talks with Shell and Total to create a refinery. Iraq supports our efforts,” Alekperov said.
READ MORE: How Russia's Lukoil survives sanctions and cheap crude
Lukoil has significant stakes in Iraq, including a stake in the hard to reach crude in West Qurna-2.
The forum is initially a space for companies that already have a business relationship in Russia, said VTB CEO Andrey Kostin.
“They cannot ignore Russia, the companies are interested and waiting for increasing business opportunities,” said Kostin on the sidelines of the forum.
Russian Foreign Ministry spokesperson Maria Zakharova spoke to RT about the key issues at the economic forum, and said that top businesspeople and officials at the event had voiced thoughts which reflect the current state of affairs in Russian-Western relations.
“The EU lost [a sense of] reality about Russia, and this is a problem. The politicians in the West really lost this [sense of] reality about Russia,” Zakharova said.
President Putin says SPIEF-2016 is an important arena for dialogue and the exchange of opinions and ideas.
“Today the forum turned into an essential space for meetings, negotiations and the interchange of views,” the President said during the panel session.
Putin thanked leaders of the states, the heads of the international organizations as well as business representatives who had attended the event.
The President pointed out that the forum served as a place for the discussion of strategic issues.
“The conversation of the kind is important today more than ever, as the word is passing through a serious transformation, when deep changes touch upon all areas of life,” he added.
The chairman of Nestle Group Peter Brabeck-Letmathe told RT that he is against any sanctions because they usually penalizing people who havenothing to do with it.
“I’ve never seen sanctions really working, so I’m not a big fan of the sanctions,” he said.
READ MORE: Nestle sees turnaround in Russian consumer decline
According to Brabeck-Letmathe, over 90 percent of the products Nestle sells in Russia are produced in Russia, so basically the company is not affected by sanctions.
“Nestle has been here for 145 years, so it’s a very long presence. We have more than nine factories in Russia, we have 10,000 people working here and we are continuously investing into this country. For us it’s one of the most important countries in the world and we are optimistic that it will continue to be so in the future.”
Sanctions are not the only thing stopping money flowing into the Russian economy from international investors, says Sberbank CEO Herman Gref.
“We need to build a serious institutional system that provides for investor’s rights and makes the investment environment attractive,” he said during a news conference on the sidelines of the forum.
Russia offers interesting business opportunities, as investment yields are many times greater than in Europe, the CEO stressed.
“The country is potentially very interesting for investing, but we need to reduce the risks,” added Gref.
Boeing has opened the most modern training facility in the world at Russia’s Skolkovo innovation center. It gives a unique opportunity for scientists, software engineers and pilots to work together, said Boeing CIS President Sergey Kravchenko in an interview with RT. The $100 million investment is aimed at improving flight safety and analyzing and reduce risks, said Kravchenko.
“What I am proud of is that the Boeing Company is one of the largest investors in the Russian economy for so many years,” he said, adding that sanctions and political tensions do not help any business.
“We are very nervous about how long this political instability will continue because our plans are for decades. But all the projects in civil aviation like this training academy and research institute fly above the political clouds.”
The future of civil aviation is with global partnership and cooperation, and Russia is a vital partner for this, Kravchenko added.
The economic crisis Russia experienced in the last couple of years is finally over; a period of recovery has kicked off, according to Russian Direct Investment Fund (RDIF) CEO Kirill Dmitriev.
“First of all, oil prices are more stable, so people are less concerned about the instability. Secondly, there are expectations that sanctions will be removed by the end of the year, so there’s a positive sense among investors,” he told RT.
Dmitriev stressed that businesses had positive returns from Russia both in rubles and dollars and intended to invest more. Foreign investors are interested in the growing sectors of the Russian economy, the privatization program and infrastructure projects, according to the CEO.
“We believe that Russian market is big enough to accommodate investors from the Middle East, Asia and Europe,” he said, adding that there would be no competition between European and Asian financiers.
If you are interested in global energy policy then the St. Petersburg forum is “a must-attend because it’s a gathering of all the majors from the energy sector,” said former Australian Prime Minister Kevin Rudd.
“The St. Petersburg forum is an essential part of the global discussion,” Rudd told RT.
Speaking about sanctions, he said it’s important to talk to other side and understand their perspective because “it’s only then that you begin to understand their actions and could find compromise and forge cooperation for the future.”
Rosneft and BP are to spend $300 million creating a joint venture called Ermak to explore and analyze geological information.
BP owns 19.75 percent of Rosneft.
Italian companies have signed deals and memorandums worth €1.4 billion with Russian partners, TASS reported the Conoscere Eurasia Association as saying.
“On the first day of the SPIEF, a whole package of agreements was signed between Italian and Russian companies with regard to various sectors of the economy – construction, the crediting of start-up businesses, technologies, designing and cooperation in the implementation of infrastructural projects,” the association said in a statement.
Italian Prime Minister Matteo Renzi is expected to speak at a SPIEF plenary session today, and President Putin will visit an Italian pavilion at the forum.
Total CEO Patrick Pouyanne told RT that the company’s investments in Russia include the $30 billion Yamal LNG project.
“We have just finalized the financing of it with the Russian and Chinese banks, so it’s a big commitment for our company. It’s the largest project that Total has today in the world and in Russia. So, despite the sanctions, we are moving on,” he said, adding that Total is investing in the Yamal project for 40 years.
READ MORE: Chinese investments shore up Russia’s Arctic LNG project – Total CEO
According to Pouyanne, it’s important in the oil industry to stay the course and to have a long-term vision because “prices can go up or down and sanctions could come or exit.”
He added that Total will stay in Russia because there’s a lot of oil and gas, especially low-cost gas, which is very important. “When you are an oil and gas company you go where the oil and gas is,” Pouyanne said.
Russian Foreign Ministry spokesperson Maria Zakharova, presidential press secretary Dmitry Peskov and Sberbank CEO German Gref were among the participants in the SPIEF Race, which was held as part of the St. Petersburg International Economic forum (SPIEF). The 8-kilometer race took place in the historic center of the city, Russia’s northern capital.
According to the organizers, nearly 650 people applied to participate in the event. The participants gathered at 6:30am Moscow time near St. Isaac’s Cathedral and took a run past the Winter Palace, the Church of Savior on the Spilled Blood, Kazan Cathedral and other St. Petersburg landmarks.
Welcome back to the second day of the International Economic Forum in St Petersburg!
Today, Russian President Vladimir Putin is scheduled to meet with Kazakhstan’s leader, Nursultan Nazarbaev, and Italian Prime Minister Matteo Renzi. A Q&A session is on the agenda.
President Putin will also meet with the heads of leading foreign companies, including BP, Siemens, Shell and Caterpillar. He is further scheduled to hold a news conference with international press agencies.
16 June 2016
The Russian economy has finally emerged from recession and is now enjoying all the conditions necessary for growth, Russian President Vladimir Putin said at a meeting with investors and members of the Russian Direct Investment Fund (RDIF) at the SPIEF on Thursday.
“The economy has adapted to the new environment,” Putin said.
“Moreover, after introducing a flexible national currency rate, it [economy] now has competitive advantages,” Russia’s leader stressed.
Russia’s first stretch of high speed transportation system Hyperloop, that will cost around 30-40 billion rubles ($450-600 million), could be laid from China to the Russian port of Zarubino, located in the south of Primorsky Krai, Transport Minister Maksim Sokolov told media.
“By the time of the Eastern Economic Forum that is to take place in September, we will have prepared a technical and economic plan for the project and will present it at the forum,” Sokolov said.
Russian President Vladimir Putin and European Commission President Jean-Claude Juncker touched upon the energy industry during a meeting at SPIEF, Russian envoy to the EU Vladimir Chizhov reported.
“The subject of energy industry has been brought up,” Chizhov confirmed. He also expressed hope that, after the meeting, there will be some visible progress on the matter.
Russia could engage in talks with Italian officials over the privatization of 19.5 percent of Rosneft shares, Russian Deputy Prime Minister Arkady Dvorkovich said.
“We are currently discussing the matter with all of our strategic partners. There are Italian officials at the forum, including the Prime Minister. We’ll see if they are going to be interested. However, we will take into consideration all of the possibilities. We are on good terms with Chinese and Indian partners,” Dvorkovich said in an interview with Bloomberg TV at the SPIEF.
Watch RT's latest report from St. Petersburg
The construction of the Moscow-Kazan high-speed railway may start next year, and if all the paperwork is done even by the end of this year, said Russian Transport Minister Maksim Sokolov.
READ MORE: China to build 400km/h train for Russia's high-speed railway
China is currently developing a new generation of trains capable of reaching speeds of 400 kilometers per hour for the route which is expected to be open in 2020.
In an interview with RT, Russian Deputy Prime Minister Aleksandr Zhukov said Procter & Gamble has signed a new investment agreement in Russia and is interested in staying for at least another 25 years. He added that Western companies working in Russia are interested in increasing their investment in Russia rather than speaking about sanctions and their extension. “They understand Russia is a country with a good labor force with a vast industrial and economic potential,” Zhukov added.
Investors from Asia and the Middle East are taking the opportunity to more localize production in Russia, according to Ian Colebourne, the CEO of Deloitte CIS.
“What we are seeing is particularly interesting: agriculture, pharmaceuticals, healthcare continue to be of [investor – Ed.] interest,” Colebourne told RT.
There is also expansion in light manufacturing, while sovereign wealth funds are interested in traditional sectors like energy, natural resources and infrastructure, he added. The retail sector and logistics are also of investor interest.
Russian President Vladimir Putin intends to discuss Russia's relations with the EU when he meets European Commission President Jean-Claude Juncker. Earlier on Thursday Juncker said he intended to discuss sanctions with Putin. Russian Foreign Minister Sergey Lavrov said he hoped the meeting between Putin and Juncker at the St. Petersburg International Economic Forum will help to improve relations between Moscow and Brussels.
The head of OMV of Austria Rainer Seele says Russia has always been and continues to be a reliable supplier of energy to Europe.
"Europe needs more gas, and I am ready to buy an additional amount. The first contract was signed 48 years ago and Russia has always been a reliable supplier of gas regardless of the political environment. We have always received every molecule fixed in the contract. It convinces us that we must continue our business dialogue,” said the CEO.
Russia’s high-tech Rostec company and the Russian Direct Investment Fund (RDIF) have signed an agreement on investing in Russian Helicopters. According to Rostec CEO Sergei Chemezov, the deal could be worth $600 million.
"Further development of the company [Russian Helicopters –Ed.] can be possible either through a technical partnership, or through attracting portfolio investors, which in addition to direct investments could open opportunities for entering new markets ..,” Chemezov said.
RDIF and Middle Eastern funds are to buy up to 25 percent of Russian Helicopters’ share capital.
India's Oil and Natural Gas Corporation (ONGC) plans to invest $5 billion in Russian projects this year, said the company's Managing Director Narendra Kumar Verma. He also told reporters that ONGC is interested in expanding its partnership with Rosneft. The Russian oil company signed a number of agreements with Indian companies on Wednesday.
St Petersburg Economic Forum: Opening Ceremony
On the sidelines of the forum, French MEP Rachida Dati said the sanctions against Russia are bad, not only from an economic point of view, but they also hinder the global work against terrorism.
“As you know, I am actively involved in fighting terrorism and, in particular, jihadism. The sanctions have affected the heads of your [Russian] intelligence agencies. We no longer have the ability to directly interact with the leaders of your intelligence services, because they cannot come to Paris to discuss extremely important information on intelligence, which corresponds to the security interests of both Russia and Europe. The United States, which imposed sanctions against Russia, did not impose them against the heads of Russian intelligence services. They cynically called others to impose sanctions, but they do not adhere themselves. Why, then, are we trying so hard?” she told RT.
READ MORE: 'Why Europe needs Russia more than ever': Open Letter from European politicians
BP chief executive Bob Dudley says the company intends to continue its partnership with Rosneft, as it values the long-term business relationship in Russia.
Mr. Dudley said he had no insight about the removal of sanctions, but BP has to be careful. “We work really hard to make sure we remain within the boundaries of the sanctions,” he told RT on the sidelines of the forum.
He expects Russia will get back to the world of the commerce and trade, pointing out that his company has a big future in Russia.
“I generally believe sanctions probably do not accomplish what they are meant to do, and I think it harms business, and I’m a big believer that trade between nations builds bridges between countries,” said Dudley.
Russia and the EU should carry on their dialogue despite sanctions, the European commission head Jean-Claude Juncker has said at the grand opening of the St. Petersburg Economic Forum.
READ MORE: EU’s Juncker: Russia, EU should continue dialogue despite sanctions
Anti-Russian sanctions are getting in the way of the West doing business with Moscow, Severstal chairman Aleksey Mordashov told RT.
Sanctions have a very negative impact on the overall spirit, as well as prevent Russian and Western economies from growing, Mordashov stresses.
Though Severstal doesn’t feel the impact of the sanctions directly, the policy provokes anxiety and uncertainty in the business sector, keeping people away from investing, according to the chairman.
Russia is not considering the possibility of canceling the countersanctions against the West, as it wasn’t Moscow who kicked off the sanctions war, said Economic Development Minister Aleksey Ulyukayev.
“It’s the biggest foreign delegation I’ve seen here [at SPIEF] for many, many years,” Mark Otty, Managing Partner at Ernst & Young told RT.
Speaking about increasing interest in Russia from foreign investors, Otty said EY has noticed a 61 percent year-on-year increase in FDI projects in Russia. This is representative of the size of the economy and the opportunities it offers to investors, he added.
Despite recent supply shortages, global oil overproduction remains at 1.5 million barrels per day, according to Russian Energy Minister Aleksandr Novak.
Russian businessman Aleksandr Lebedev told RT that despite hi-tech research and manufacturing in Russia has been underfunded, there are “certain good things happening.”
MC-21: Russian high-tech plane rolls out to challenge Airbus 320 (PHOTOS, VIDEO)
“Look at the MC-21; it seems to be quite a good plane. And even the Sukhoi Superjet… is performing very well in Mexico, the Mexicans are quite happy,” Lebedev said, adding that Russia has not lost its competitiveness.
The key rate in Russia should be downgraded to 9.5 percent this year and to 7 percent in 2017, said VTB Bank CEO Andrey Kostin, adding that it’s artificially inflated now.
Last week, the Central Bank reduced the key rate from 11 percent to 10.50 percent per annum. After hiking the rate to 17 percent in December 2014, the bank has been gradually cutting the rate.
Trade between Russia and the UK reduced by 40 percent in 2015, said British Ambassador to Russia Laurie Bristow. The causes are the ruble’s depreciation and the contraction of Russian economy, he added.
"Her Majesty’s government supports development of business ties between Russia and the UK, but within sanctions and within the law," he added.
According to Russia’s former Finance Minister Aleksey Kudrin, the country can’t fight for investments with China and the US at current inflation and budget deficit levels.
"I would compare a budget deficit with the heart and blood vessels, which must be in good condition. A hypertensive person can’t compete in the Olympic 100 meters. It is impossible to compete for investors’ money with China and the US at the inflation level of 7-8 percent," said Kudrin.
Gazprom says transiting gas through Ukraine is 20 percent more expensive than through the planned Nord Stream-2 pipeline.
"The Nord Stream-2 transport tariff stands at $2.10 per 1,000 cubic meters of gas for 100 kilometers. The transport tariff via Ukraine totals $2.50, which means that transit via Ukraine is 20 percent more expensive," Gazprom CEO Aleksey Miller said.
The members of the Shanghai Cooperation Organization (SCO) are currently discussing the creation of a new continental free trade zone, according to Russian Economic Development Minister Aleksey Ulyukaev.
Founded in 2001 in Shanghai, the SCO is a Eurasian political, economic and military organization uniting Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
Nicolas Sarkozy, the former president of France, has called for anti-Russian sanctions to be lifted, adding that Europe has enough problems without them.
Sarkozy stressed that he had come to Moscow as relations between Russia and Europe had never been so cold. “Europe should work hand in hand with Russia. We are not interested in the Cold War,” the ex-president said.
Russian President Vladimir Putin has welcomed participants and guests of the International Economic Forum in St. Petersburg in a post published on the forum’s official website.
“It gives me great pleasure to welcome participants and guests of the St. Petersburg International Economic Forum,” the president wrote.
“The challenges facing the global community demand concerted action aimed at achieving sustainable and balanced growth. It is vital that we work together in our search for additional drivers of development. We must more fully make use of the industrial, scientific, technological, and innovative potential of our nations, and also the potential of international integration structures. We must react more swiftly to the shifting demands of the market and to the looming transformation of the global technological landscape,” he wrote.
15 June 2016
Here’s the June 16-18 program. On Thursday, Russian President Vladimir Putin is expected to meet European Commission President Jean-Claude Juncker, and the CEO of Royal Dutch Shell Ben van Beurden. There is also a meeting with UN Secretary-General Ban Ki-moon and Special Envoy for Syria Staffan de Mistura on his agenda.