Putin’s forum preaches self-reliance as foreigners stay away

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Vladimir Putin, President of Russia, at a press conference in Moscow on August 27, 2019. (Andrey Rudakov/Bloomberg)

Senior officials told the Kremlin’s annual economic showcase that Russia is weathering the sanctions better than initially feared, touting a new model focused on domestic production as the country faces unprecedented international isolation following a his invasion of Ukraine.

Fewer foreigners showed up at the St. Petersburg International Economic Forum this year, an event that in the past attracted top world leaders and top executives from the world’s biggest companies. They were replaced by local businessmen who attended a multitude of sessions on Russia’s need to become self-sufficient, according to participants.

Visitors to President Vladimir Putin’s response to the World Economic Forum include officials from the Middle East, Asia and self-proclaimed Russian-backed breakaway republics in Ukraine. Representatives of the Taliban are also present, who have proven popular among delegates looking for selfies.

Many Russian participants were reluctant to share the spotlight, fearing it would make them targets of sanctions from the United States and its allies, and several panels were reshuffled at the last minute. Many of the remaining speakers have already been affected.

Even so, the mood was optimistic during Thursday’s main economic session, during which no mention was made of Ukraine or the war. The government will revise down its forecast for a contraction in gross domestic product this year, Economy Minister Maxim Reshetnikov said.

“We see that the measures that are taken so intensively are having a result,” he said, without specifying the new figure. At present, the authorities are forecasting a drop of 7.8%.

But Reshetnikov warned that unlike past recessions, where the recovery put the economy back on its previous path, this time will be different. “Our goal is to buy time to allow for a structural overhaul,” he said.

Russia needs to rethink its focus on exports, which have long been an engine of growth and a source of hard currency, said central bank chief Elvira Nabiullina. With sanctions driving down the prices of the country’s main products and raising the cost of imports, the industry must focus on the domestic market, she said.

Finance Minister Anton Siluanov lamented that “the globalization we were moving towards before has not turned out to be so comfortable for countries, so to speak”.

This sparked a note of realism from the panel moderator, who pointed out that the country’s largest automaker has introduced a new post-sanctions model lacking many key features.

“I don’t want to spend time listing all the things this car won’t have, but there’s one feat it definitely will have: this stripped down version will cost more than the fully loaded version,” said Andrei Makarov , a ruling party legislator. “Does this mean that our import substitution will continue on the principle of lower quality for more money?”

Siluanov dismissed the problem as a problem only for the state if government employees had to drive Russian cars, prompting his press service to issue a statement clarifying that he had not offered to drive Ladas. stripped.

AvtoVaz, the carmaker controlled by Renault until last month, then offered to supply Ladas to any civil servants who needed them, state news service Tass reported.

Kremlin economic aide Maxim Oreshkin said Russia’s “economic development machine” had lost a few pieces – high-tech items, funding, etc.

President Vladimir Putin called officials and industry leaders for a meeting later in the day to discuss ways to reverse the sharp decline in the auto sector. Car sales have plummeted 80% and nearly every car factory in the country is closed due to sanctions and parts shortages.

The party circuit, like the latest Lada models, is stripped down. While stars like Sting and Robbie Williams have performed at forum events in the past, most parties this year are sponsored by state-owned companies and rely on Russian talent.

Even then, there were last-minute changes. Band B-2 have been removed from a night’s headlining after recently refusing to play in a Siberian town because of a pro-Putin banner referencing the war in Ukraine, Izvestia reported. They were replaced by a rocker who showed off a new tattoo on his chest that reads “Fatherland or Death”.

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