DEVELOPMENT OF ECONOMIC COOPERATION “FROM LISBON TO VLADIVOSTOK”
02 September 2016
As part of the Eastern Economic Forum, a key session was held “Development of economic cooperation “from Lisbon to Vladivostok”.
Antonio Fallico, President of the Conoscere Eurasia Association and Chairman of the Board of Directors of Inteza Bank (Italy), noted that specific projects and the conditions for implementing needed to be considered. The Silk Road is an integration project that will change the architecture of the world trading system, although it included nothing new. Cross-border links date back to antiquity – from Caesar and Alexander the Great. The Great Silk Road at the time of the Han dynasty existed from 114 A.D. until the 15th C and stretched 8,000 km. This system for organising trade has come down to our days and is required by today by the global economy.
Formation of a common economic space is a complex process. It requires compromise, since the interests of many countries may not coincide. The EU is the junior partner of the USA, which wants to cut Europe off from Asia. We need to build a Greater Europe including Russia. Italy should not reject building new trade unions. One needs to study geography. Russia is at the centre of the world map. Without it, no land, air or sea cross-border transport corridors can be built from Europe to the APR.
Alexey Likhachev, Senior Deputy Minister for Economic Development of the Russian Federation, noted in his speech that trade turnover between Russia and the EU peaked in 2013, reaching USD 436 bn. Under today’s conditions, we will not return to this figure in the near future. The spirit of our economic relations has suffered, though many European companies continue to work both in and with Russia.
Without a political turnaround by Brussels towards Moscow, the negative trends will continue. Today, Germany and Japan are behind the USA in trade turnover with Russia. It is important to create the conditions for normalising relations between the EU and Russia.
If the heads of countries and policy say let’s consider the proposals, at the expert level they say it isn’t time yet. Joint efforts are required for integration and investment projects. We need to sit down with the experts and discuss the outline and specifics for integration agreements.
The new global trade and economic architecture is not some new world order but a step forward in integration processes in a time of global challenges. It requires a rethinking of the formats for collaboration in the EU–Big Eurasia–USA triangle. Russia is installing the requisite levers for this and is hoping for constructive collaboration with Brussels.
Ulf Schneider, CEO, Schneider Group (Germany), stated that business in the EU is extremely interested in collaborating with Russia, since exports in 2015 fell by 30%. New initiatives are needed. There needs to be interaction with EU commissions on priority topics and projects that may be discussed without a political undertow: harmonisation of tax and technical rules, unification of legal documents, a visa-free regime. The start could be signing of memoranda on creating a common economic space from Lisbon to Vladivostok.
Petr Fradkov, General Director of AO Russian Export Centre, said that objective processes are under way and the space between Lisbon and Vladivostok is being transformed. One can already speak about an economic space within the framework of Europe–Russia–APR. Artificial barriers on this space will be removed.
Russia’s export map will also change. At the moment, 46% of exports go to Europe and 22% to the APR. Russia’s share in the Asia–EU trade turnover is less than 1%.
Hans-Pol Bruchner, Chairman, The Boston Consulting Group, recognised that everything has been happening in the world since the 1990s has been determined by political processes. Countries are becoming increasingly nationalistic. A single, big integration programme will not eliminate all these contradictions. Scepticism is growing, in particular with respect to adoption of a new trade agreement with the USA.
Over the next 10–15 years, we will create a more open space with Eurasia and, above all, an infrastructure and institutional instruments. Even small steps forward in this direction might bring big changes.
The Far East must use its potential for trading with China and Japan. Russia’s key policies do not focus particularly on this. More incentives are needed for development of the Far East and Siberia. Powers should be delegated at the regional level, to avoid everything being decided in Moscow.
All parts of the world are now increasingly interdependent. We all need to move together in the right direction and not put our hopes in some unified global actionе. We must say that globalisation will improve everyone’s lives.
Hirosi Meguro, CEO, Mitsui & Co Moscow LLC. (Japan), said that the company had been doing business in Russia for almost 30 years now, from Sakhalin to Kaliningrad, including under the Sakhalin 2 project. It is now planning to invest in RusHydro projects.
To do business in Russia, one needs patience, but we believe in its potential. The idea of abolishing visas between Eurasia and the EU is a right one, but evidently unrealistic at the moment. This could be achieved between Russia and Japan. Tourism between our countries must be boosted and our government should announce this at all levels.
A transport infrastructure needs establishing in the Asia-Europe corridor, above all for the railways, especially high speed ones. These are important for development of the economy. We are prepared to co-operate with Russia on these projects.
Philipp Pegorier, President of Alstom in Russia, announced that many German and French politicians still lacked the political will to implement grandiose projects for the sake of humanity as a whole. A Greater Europe stretching from Lisbon to Vladivostok is so far no more than a dream.