For years, the St. Petersburg International Economic Forum (SPIEF) was a lackluster affair, hampered by the sanctions against Russia and the country's isolationist economic policy. But this year's conference has been unusually lively, marking the first time since 2014 that Western businesspeople have attended the event in any significant number.
Notwithstanding the sanctions still in place against Russia, several large European energy firms, such as Total SA, Royal Dutch/Shell and BP, came out for this year's SPIEF. Total SA CEO Patrick Pouyanne even participated in a forum on doing business in Russia. Many European energy firms — including Italy's Eni and Norway's Statoil — had projects planned in Russia before the European Union imposed sanctions on the country. Some firms intend to resume their ventures this year with help from a grandfather clause in current EU law. The United States' sanctions regime doesn't include such a provision, but U.S. firms are well represented at the forum nevertheless; Exxon Mobil Corp., Chevron Corp. and Boeing Co. are all in attendance.
Yet despite the Western turnout, Russia has so far struck most of its deals at the forum with Asian partners. India and China have each brokered lucrative energy, nuclear, arms, rail and aviation deals with Russia at the summit. The implication is clear: Russia is still in business and can still close trade deals regardless of its weak economy, difficult business climate and economic pressure from the West.
Beyond business, Russian political dynamics were also on display at the forum. Many reformist politicians called for a restructuring of Russia's economic and business systems during the forum. Former Finance Minister Alexei Kudrin called for the Russian energy sector — Moscow's crown jewel — to be mostly privatized by 2025, a suggestion Kremlin officials quickly shot down. Similarly, VTB Bank's first deputy chairman said Russia's state shipping company, Sovcomflot, would soon be privatized. Though the move will doubtless irritate Russia's military-industrial and isolationist factions, many Western investors are already showing interest.