The Saint Petersburg International Economic Forum 2013
View from the ground
The agenda for the Saint Petersburg International Economic Forum this year focused on Russia’s economic slowdown. A number of large-scale deals and initiatives aimed at boosting the country’s economic activity were announced at the Forum; however, many observers questioned the sufficiency of such measures. Instead, the discussions between the sessions were filled with worries over the main factors that chill the business climate in Russia: rising inflation, dependence on the oil sector and low investor confidence. These should be viewed in the context of the overall global economic conditions, with all the G20 severely affected. However, the Russian government laid out a strong investment agenda to stimulate the economy.
Despite the ambitious stimulus plan, the Russian government sent some conflicting signals to the business community.
The Saint Petersburg International Economic Forum (SPIEF) is the premier event for foreign and domestic investors and is used by the Russian government to make strategic announcements. This year’s SPIEF held between 20 and 22 June was headlined “Prospects for the Global Economy: Time for Decisive Action”. President Vladimir Putin – now in his thirteenth year as the country’s leader – made a stimulus plan the centrepiece of his annual speech at the event. With slowing economic growth a primary concern, this year’s agenda focused on boosting economic activity and once more emerging from the global financial crisis.
Despite the ambitious stimulus plan, the Russian government sent some conflicting signals to the business community. We discuss below what these signals might mean for the Russian economy and foreign investors.
This year’s Forum saw a number of developments which were ostensibly positive for the Russian economy.
First, President Putin pledged a US $43 billion investment for three large-scale infrastructure upgrade projects (the country still suffers from Soviet-era dilapidated roads and railways):
- the Trans-Siberian railway, which runs between Moscow and Vladivostok;
- a 500-mile high-speed rail line between Moscow and Kazan; and,
- a superhighway ring-road around Moscow.