Russia’s determination to defy the West’s sanctions was on display at its Davos equivalent in St. Petersburg, with President Vladimir Putin looking South and East for partnerships. He was speaking at the city’s 27th International Economic Forum—one of the biggest economic events held since its invasion of Ukraine—and his message was that Russia had not been sidelined or isolated, as Europe and the United States had hoped.
Russia’s economy has not only survived the sanctions but flourished despite them. Its central bank now has inflation under control at around 8%. This had been a worry since a lack of labour (owing to military call-ups) had sent wages spiralling. Furthermore, GDP is now growing at 5.4%, according to figures released on Friday. Russians have money in the banks, and with the value of the rouble on the rise, the cost of imports is coming down.
“Despite all the obstacles we are facing and the illegitimate sanctions imposed against us, Russia remains one of the key participants in global trade and is rapidly expanding the new logistics and geography of cooperation,” Putin said. Between 2020-23, he told delegates that Russia’s business ties to Latin America had grown by 42%, Asia by 60%, Africa by 69%, and the Middle East by 100%.
From Russia, with love
The forum, which draws participants from 100 countries, first ran in 1997 and is known informally as ‘the Russian Davos,’ a reference to the World Economic Forum held annually in the Swiss resort. This year, Putin wanted to show the world that Russia was doing well economically and woo Asia and the global south into new partnerships.
The goals and objectives of Russia’s new economic cycle were covered at the forum, with national priorities often referred to as “traditional values”, but the ambition of the gathering ran beyond national borders. Much attention was given to the development of a multipolar global economy, in which Russia is hoping to play a major role through new partnerships with countries in Asia, Africa, and South America.
Business dialogue sessions between representatives, policymakers, and business group lobbyists from Russia, China, India, Africa, Latin America, and the Association of Southeast Asian Nations (ASEAN). Other sessions covered Russia’s relations with Azerbaijan, the United Arab Emirates, and Oman.
Yusif Abdullayev, director of Azerbaijan’s Export and Investment Promotion Agency, said there were 1,300 Russian-Azerbaijani joint ventures in his country. Elsewhere, delegates heard that Russia’s trade with Oman is up by 60% in 2023.
“We see how confidently Oman is developing, how its economy is growing, and its citizens’ wellbeing is improving, as well as demands for external trade contacts and joint investments,” said Russian economy minister Maksim Reshetnikov.
“Moreover, we see Oman as a wonderful entry point for the (Arabian) Gulf countries, which are estimated as a market of more than $2tn.”
Signs of strength
The World Bank recently estimated that Russia was now the fourth largest economy by purchasing power parity in the world, overtaking Germany at the end of 2023, something that several Russian speakers were keen to point out. Andrey Makarov, chair of the Russian parliamentary committee on budgets and tax, said Russia was ahead, having set its sights on overtaking Germany by 2025.
