Russia’s annual St. Petersburg International Economic Forum ended up with an impressive financial haul—$15.3 billion in contracts, compared to just $3.6 billion last year. But more important than the investment tally was a new-look political message for the West, delivered by Russian President Vladimir Putin from the forum’s dais.
Independent analysts in Russia mocked the annual gathering as “a masquerade ball”. As journalist Oleg Kashin wrote in anticipation of the event, “In this role-playing game, security service veterans, the same old officials, and people whose business cards probably say ‘A President’s Friend’ (because there is nothing else to say about them), will be transformed into world-class businessmen.” And despite the performance being executed competently, it is still a performance: there are no real success stories, nor is there any competition. This was to be “a company party for a super-rich firm, whose only businessman is Vladimir Putin,” Kashin said. He singled out former Russian Railways CEO Vladimir Yakunin to make his case. At last year’s Forum, Yakunin appeared to be a highly influential state oligarch (a “state” oligarch, because Russian Railways has always belonged to the Russian government); Yakunin was fired last year, and today nobody even knows where he is and what he is doing, Kashin pointed out.
The Russian opposition politician Vladimir Milov, who was deputy Energy Minister of Russia in 2002, was asked his opinion ahead of the Forum. He wrote on his Facebook page: “An attempt to portray some strategic perspectives and geopolitical strength with a complete lack of either of them; the worst crisis of the past 20 years, and no strategy for how to overcome it; Vneshekonombank’s bankruptcy; an inability to even build the bridge to Crimea; […] lame ducks like Sarkozy who have no chance of regaining leadership roles; an absence of Chinese businessmen on the two major panels devoted to strategic issues of energy development—I just don’t see what there is to comment on.”
Besides former French President Nikolas Sarkozy, the Forum was attended by a number of high-profile politicians and dignitaries: the President of the European Commission Jean-Claude Juncker attended, as did Italian Prime Minister Matteo Renzi, the President of Kazakhstan Nursultan Nazarbaev, UN Secretary General Ban Ki-moon, as well as Vice Presidents and Deputy Prime Ministers from eight other countries.
The Forum opened with a discussion on sanctions. In a carefully-worded statement, Juncker called for a restoration of trust between Russia and Europe, “despite economic sanctions”. In discussing the sanctions specifically, Juncker said the the only way to get them lifted was “a full implementation of the Minsk agreement—no more no less”; the European Commission President didn’t shy away from mentioning the annexation of Crimea either. Matteo Renzi, for his part, even had a dispute with Vladimir Putin over the question of why Europe enacted sanctions on Russia in the first place. Putin insisted it was done due to U.S. pressure, while Renzi defended the decision as having been authentically arrived at by Europe’s statesmen.
Nicolas Sarkozy, on the other hand, didn’t hesitate to flatter his host. Speaking during the Forum’s first day, Sarkozy said that he had had a private meeting with “his friend” Vladimir Putin, and that he had asked him to take the first step in lifting Russia’s counter-sanctions, the food import ban. In response, Sarkozy seemed to indicate, Europe would lift its sanctions too. “The strongest should give way first, and the strongest here is President Putin”, Sarkozy explained. Speaking at a press-conference after talks with Matteo Renzi, Vladimir Putin parried Sarkozy’s proposal. “We would have been ready to be the first to lift sanctions against the West, had we been assured we wouldn’t be ‘conned’, as we say in Russia,” Putin said, resorting to a vulgar slang expression. “We have to be assured that our moves would be followed by appropriate counter-moves.”
Given rising prices, a worsening food deficit, and the Russian people’s resultant discontent, Putin’s statement was coming from a position of weakness. Putin had always argued that the food import ban was put in place to help develop Russia’s domestic production—to “protect national interests”, as the official Kremlin document had it. Here, however, Putin was openly admitting that the move was as much as anything a means of saving face. Help me walk this disastrous decision back, he appeared to be saying.
While at last year’s Forum the Russian President tried to put a brave face on the economic situation, saying that Russia was successfully weathering difficulties, and that the sanctions hardly had any impact on the country, this year Putin used the Forum to directly address the West. One statement in particular got a lot of play in Western media: “America is a great power—today, probably the only superpower. We accept that. We want to and are ready to work with the United States. The world needs strong nations like the U.S. And we need them,” Putin said. “But we don’t need them constantly getting mixed up in our affairs, instructing us how to live, preventing Europe from building a relationship with us.” This, too, was new rhetoric, considering Putin’s previous proclivity for railing against a U.S.-led “unipolar” world order.
It confirmed something that some analysts have been arguing for a while: Russia’s President is not an ideologue in the mould of Kim Jong-un. Indeed, he is largely free of ideology, and ultimately wants the world to admit him back into the international system—but of course on his own terms. As Stanislav Belkovsky put it in his interview with TAI:
Vladimir Putin is a Westerner who suffers from being rejected by the West. But he refuses to understand and accept that an alliance between Russia and the West, if it is to exist, will have to be built on the basis of values, not on some balance of military forces hewing to an old-fashioned, Stalinist paradigm.
Politicians like Jean-Claude Juncker were likely invited to the Forum as message deliverers, in hopes of helping Putin rebuild ties with Europe—not to help Putin wreck the existing European order, as many believe to be his goal.
Also worth noting: Putin gave a speech in which he discussed relations between the military and security services—the siloviki—and businesses, a subject he first broached in February of this year. Unlike in February, when Putin told business leaders to deal with the siloviki through the Kremlin, Russia’s President this time suggested that the siloviki ought to back off. The security organs bore personal responsibility for the destruction of businesses, he said.
These unbelievable words were being uttered at the same time as the owner of Domodedovo, the second largest airport in Russia, was sitting in prison, accused of providing inadequate security at the time of a terrorist attack on the facility in 2011 when 37 people were killed.”The case against him comes against the background of the state’s long-running attempts to acquire a stake in Domodedovo,” the BBC reported. Roman Trotsenko, a former adviser to Rosneft CEO Igor Sechin and head of the AEON holding company, who happened to be attending the Forum, said he was interested in buying Domodedovo. The same man, along with Rosneft, tried to acquire the airport twice before, in both 2011 and 2013. Trotsenko is known as one of the biggest corporate raiders in Russia.
After his speech, Vladimir Putin met with various Italian investors who signed contracts totaling €1.3 billion. Later that day, Putin pulled his favorite trick, making investors from several other countries wait for him for two hours. An American investor, Jim Rogers, told RBC that Putin’s main message was that “everything is going to be OK”. “We were told that if if wanted to do business in Russia, we would be helped, and that the authorities are very friendly towards business,” Rogers said.
Kashin’s prediction came true: the St. Petersburg Forum really did turn out to be the year’s best masquerade ball. The only real surprise was the mask that Putin was wearing: that of a supplicant to the West.