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For about four hours, representatives of the international business community, officials, politicians, public figures, journalists and experts discussed the impact of the sanctions, imposed against Russia over the past two months, on the Russian, European and world economy.
The moderator of the discussion, Prime Minister of the Government of the Republic of Bashkortostan Andrey Nazarov, proposed to form an international working group with the participation of business and government representatives to find anti-crisis solutions and hold its meetings in the Bashkir capital every month.
The participants of the discussion supported the initiative and invited the Head of the Bashkir government to take over the organization and management of the work of a new group. During the discussion it was decided to call the group "Ufa Dialogue".
Opening the discussion, Andrei Nazarov noted that the sanctions regime imposed against Russia has caused additional mobilization of the economy of almost all developed countries:
"There are almost six thousand of them (sanctions measures). To be honest, we have already stopped counting them. Switzerland is the leader in terms of quantity and volume, followed by the entire European Union, Australia, the USA, Great Britain and Japan."
However, according to him, Europe is also feeling the painful impact of sanctions:
"According to Eurostat data as of April 21, price growth in the euro area is accelerating – in annual terms from 5.9% in February to 7.4% in March. In the European Union (which, in addition to the eurozone states, includes Sweden, Denmark, Bulgaria, Hungary, Romania and Poland), — up to 7.8%. Inflation in Germany in March was 7.6%, in Spain — 9.8%."
The sanctions also have a negative impact on third world countries, which have lost supplies of Russian grain due to virtually destroyed logistics:
"Bread is the staple food of millions of people there. Many countries almost completely satisfied their wheat needs at the expense of Russian grain. The threat of famine is facing these countries in full growth. And I believe that any civilized person should do everything possible so that people do not die of hunger in the XXI century."
Russia is the largest sales market for many European countries, therefore, Nazarov noted, in the absence of changes from above, it is extremely important to try to establish a dialogue from below, at the business level.
Thierry Mariani, a member of the European Parliament from France, co-chairman of the Franco-Russian Dialogue Association, is convinced that there is a basis for such a dialogue.
"Do not forget that 40% of the French voted for Marine Le Pen, who advocated balanced relations with Russia and called sanctions useless and harmful to all parties. Beyond the statements of the government, the French support the development of relations with Russia and would like everything to change," - he assured those present.
Mariani stressed that the COVID-19 pandemic has greatly changed the global economy, increasing the dependence of countries on each other, so "sanctions are more expensive for those who impose them than for those against whom they were imposed," and "hinder the effective prevention of crises." The MEP is convinced that sanctions are a "tool of the weak", which in the current conditions "often becomes an instrument of subordination to the United States and paralyzes the foreign policy" of European countries.
"Before the sanctions, the Russian market was the second largest food export market for the EU (about $ 12 billion). Our dairy producers, pork producers have suffered from the counter-sanctions imposed by Russia," - stated Mariani.
The Russian market, according to him, began to develop actively in the "closed" mode due to sanctions. The MEP expressed confidence that the EU should "return to common sense, stop following the US, end the sanctions policy and start a diplomatic dialogue."
The main thing is not to forget about the importance of human capital even in the current difficult circumstances, said Vladislav Onishchenko, President of the Center for Strategic Research Foundation (CSR). According to him, the sanctions "affect the price level, inflation in each of the countries, the growth of unemployment — and in this sense, in the medium term, they reduce the ability of people to earn enough income and have a job to invest additional money in education, in health, in improving the quality of life."
In terms of the implementation of the Sustainable Development Goals, a rollback or at least a significant decrease in the pace of their achievement is inevitable.
"When the crisis situation in relations is somehow passed, humanity will face the fact that problems that could have been solved long ago or at least started to be solved will no longer be solved in the medium and long term," - Onishchenko warned.
He proposed to include in the agenda of the Ufa Dialogue group being created consideration of the long-term consequences of the sanctions crisis.
"All sides will suffer irreparable losses. All the results that have been achieved in solving the long-term problems of humanity over the past decades can be significantly revised for the worse," - predicted the President of the CSR Foundation.
Christopher Weafer, co-founder of Macro-Advisory Ltd., who managed business processes in Thailand, the UAE and Ireland before moving to Russia, noted that during the eight years of sanctions, the Russian economy has managed to adapt to them - in particular, due to the restructuring of the federal budget and reducing its dependence on hydrocarbons.
"Russia's external debt is below $50 billion, it is less than 10% of GDP and the fifth lowest indicator in the world. Therefore, despite the ever-increasing sanctions, the Russian economy is under much less pressure than other countries that have applied sanctions against it," - Weafer explained.
According to him, Russia has learned to find alternatives in all spheres:
"Now the largest Russian trading partner is China. It used to be Germany. And we see that with the growth of sanctions, there is a shift in trade, increasing diversification in production and transport. Relations between Russia and Turkey are also very strong, and their importance is growing."
In the current situation, the Ufa Dialogue, Weafer is sure, "could unite not only Russian and foreign managers and investors, but also parliamentarians, as Mr. Mariani has already said, and this will benefit the global economy."
Denis Kravchenko, First Deputy Chairman of the State Duma Committee on Economic Policy of the Federal Assembly of the Russian Federation also expressed his willingness to join the work of the group.
"This is a very important undertaking, and I think Ufa is an absolutely wonderful platform for organizing this work," - he said.
Kravchenko recalled that before the introduction of the main sanctions, the trade turnover of the Russian Federation with the United States "fluctuated between 20-30 billion dollars, and with the European Union amounted to almost 0.5 trillion dollars," therefore, in the current situation, it is quite obvious that "US representatives are leading their European partners by the nose, who, of course, suffer significantly more from the imposed sanctions than America".
According to him, Russia, in conditions when partnership with the West has become impossible through its own fault, is forced to reorient itself to the East and strengthen measures of domestic support for the economy:
"Over the past month and a half, we have increased our trade turnover with China by more than 10% compared to the same period last year and are working on sectoral support measures, of which four packages have already been adopted."
About 1.5 billion rubles have been allocated for the light industry support program in Bashkortostan, which has been implemented for two years. This was told by the Minister of Industry and Energy of the Republic of Bashkortostan Alexander Sheldyaev.
"The task is to double the volume of light industry in 24 years. Thanks to the support measures, we just opened new enterprises in the special economic zone last year, where 800 people work," - he added.
The president of the Russian-Asian Union of Industrialists and Entrepreneurs Vitaly Mankevich also spoke about the "turn to the East", recalling that this vector of development of the Russian economy was set by Russian President Vladimir Putin back in 2014.
"We see a very interesting trend: about 30% of what we used to buy in the EU can be replaced with supplies from Asia. Our union is actively working on this - first of all, with regard to industrial equipment, components, chemical raw materials, various semi-finished products and consumer goods," - Mankevich said.
According to him, cooperation with China, India, Vietnam, Indonesia, the Philippines and other friendly countries which "have not imposed sanctions and do not plan to," and "trade and financial settlements with them go without excesses" is expanding. About 30% of the imports that have so far come from EU countries and are now under sanctions will be able to pass through third countries with the help of already tested logistics schemes, Mankevich is sure.
Special support is required for the Russian light industry, which has declined 10 times in relation to GDP since 1990, the founder of the ZENDEN Group Andrey Pavlov believes. He suggests developing this industry in depressed regions in conditions of free economic zones (FEZ). As for the brands that have left the Russian market, the businessman urged not to regret them:
"They lost our market. We'll find someone to replace them with. Russian companies are ready to dramatically increase turnover, Chinese brands and Turkish brands will enter the market."
Pavlov spoke about a dialogue with "the largest shoe seller in Europe and the world", who admitted that he was forced to leave Russia under pressure, although he did not want to do so, because he was losing huge profits and was unlikely to be able to return - after all, his niche would be occupied. Therefore, the founder of ZENDEN is convinced that Russian business is "doing well, and sanctions are only a plus for us, because for a Russian person, the worse, the better," especially in terms of developing a creative approach to development.
Sergey Mironov, General Director of RestConsult LLC, one of the country's most famous restaurateurs, also expressed optimism about import substitution. He recalled that in the field of public catering, the situation has changed a lot since the 1990s, including due to fierce competition, successfully borrowed European experience and continuous development. According to him, logistics chains that were broken due to sanctions have already been restored through contacts with friendly countries, and in any case it is only a matter of time. The problem with the supply of wine from Italy and the New World is more serious, but it is also solvable. On the contrary, a unique situation is developing with fish: Russia used to export its best catch and imported Norwegian salmon and Chilean salmon instead, and now it will use what was previously exported.
The exodus of Western players from the Russian restaurant business is not actually happening - in any case, there are no those that would be worth regretting, Mironov said.
"Who's coming out? There is practically no serious high gastronomy among them. It's fast food out — McDonald's is trying to get out, Burger King. And even their exit today is practically impossible for anyone, with the exception of McDonald's, because, as a rule, it is a franchise, and the commercial concession agreement does not provide for the closure of franchisees just like that. In addition, according to management, fast food has long had Russian products by 25%. Therefore, the market will not lose anything here, but on the contrary, it will acquire some new opportunities that the franchise has limited somewhere in the commercial sense," - the restaurateur predicts.
Domestic tourism should become the driver of the development of the restaurant business under sanctions, Mironov is convinced.
"Our tourist does not go to other countries now, he does not go to Europe, he starts traveling inside Russia — and this is the most solvent tourist, he comes and leaves money with us. I don't see any serious shocks for the restaurant market, it's not production. Almost everything can be replaced here," - the restaurateur believes.
Andrey Belyaninov, Secretary General of the Eurasian Peoples’ Assembly, recalled that about 6 billion people in the world "do not share Western values" and are quite capable of creating their own ratings, rating systems (for example, an analogue of Michelin stars for restaurants), etc.
In Europe, from his point of view, what is already happening is more hitting in Europe than in Russia:
"The bubble that was called the European economy, you could even say appendicitis, burst. Nothing happened, but already panics, crisis phenomena, unrest. During all this time, the Russian Federation has not reduced the volume of hydrocarbons supplied to those countries that have announced sanctions. Moreover, according to statistics, the volumes have only increased in two months."
Belyaninov quoted one of the slogans of the Assembly - that "Crimea is the pearl of Eurasia" - and called for "really turning it into a pearl", "making it green". He cited forecasts according to which 10 million people are going to visit the peninsula in the upcoming holiday season, many of whom will come there by car. Therefore, according to the Secretary General of the Eurasian Peoples’ Assembly, it is extremely important to take care of the ecology of the Crimea — in particular, creating infrastructure for the use of electric vehicles.
Trade is a unifying beginning for States, said the professor, Doctor of Sciences of Keppler (Linz) University Veronika Wittman with reference to the works of philosophers - in particular, Immanuel Kant.
"Trade is a key driver of the development of international relations, and the use of trade networks can help improve relations between States. Therefore, trade policy can also be an effective tool for building mutual understanding and global cooperation and can be used as a very good tool for solving global problems," the researcher believes. She urged Western politicians to think about the role of international trade in conflict resolution and, accordingly, the destructive role of sanctions. "Trade can stabilize conflict situations and ensure human security, so as a result, stimulating international trade meets the interests of all its participants," - Wittman summed up.
Germany understands that the sanctions policy is dictated to Europe by America. This was stated by Bundestag deputy Stephan Koiter, he worked for a long time in commercial enterprises, and later in the Committee for Economic Cooperation and Development, which deals with issues of global economic cooperation.
"The Germans are not thinking about national interests now; they are fighting for the interests of others, for the interests of Europeans and for the interests of other countries, especially the United States. The media tell us about "bad Russians" on the one hand and about "poor victims" on the other hand. This is not journalism, it is pure propaganda, and it encourages the emergence of even more sanctions. We see a reduction in interaction with Russian companies. Informed sources say that reducing energy supplies from Russia is utter madness, supporting the coal economy and undermining their own interests," - says Koiter.
He expressed confidence that Russia will find a replacement for the German companies that have left its market, but they will not make up for their losses.
The work of propaganda was noted by both American and Russian journalist Tim Kirby. According to him, an unprecedented campaign is being waged in the news field, which did not exist either in the 1960s or in the 1990s - and Europe is actually being required to sacrifice funds and opportunities for the sake of "a regime led by an actor who smokes cocaine in his bunker." This propaganda is aimed at ordinary people, who, meanwhile, according to Kirby, suffer most from sanctions.
"We need to take into account the points of view of all countries, all interested parties, in order to find a way out of this crisis. It is important to adapt to the situation and make the most positive decisions," - the journalist believes.
When asked if he had a desire to return to the United States against the background of everything that is happening, Kirby recalled that electricity bills there are 10 times higher than in Russia.
The deputy of the regional parliament of Veneto, Stefano Valdegamberi, also noted the "huge amount of misinformation" about Russia that is now coming to Europe:
"They are now making an enemy out of Russia and creating an image of an enemy country for Europe. But those who know Russia and Russians understand that this is not so. There are a large number of people in Italy who do not believe this; they know how things really are. And business says that relations with Russia are very important."
According to the politician, Italian business is forced to leave the Russian market, and its place is taken by international competitors:
"This is really crazy. This is understood by manufacturers in Germany, it is understood by Italian manufacturers."
Valdegamberi believes that the sanctions policy will lead to a change in the polarity of the world, as a result of which Europe will cease to be a pole and give up its position to Asia, and the United States will be able to sell its liquefied gas to the EU, which has long been sought.
Political scientist, director of the Center for Geopolitical Studies Dragan Trifkovic, who represented Serbia, recalled that Belgrade refused on principle to join the European sanctions against Russia even under pressure from the EU. He recalled that the Serbs themselves lived under sanctions in the 1990s and know what it's like. But Russia, Trifkovich believes, has incomparably higher capabilities and resources:
"Russia is a country rich in natural resources; it has strong opportunities for sustainable development. For this reason, I believe that the policy of sanctions, which leads to isolation, in the future will create very serious economic consequences for those countries that imposed sanctions."
According to the political scientist, Europe has yet to find out how much its dependence on Russian energy resources is.
Hungary has become another country that is not going to break off relations with Russia and join the sanctions. The trade representative of the Russian Federation in this country, Sergey Bezrukov, noted that Budapest "keeps to itself in Europe", not supporting the introduction of anti-Russian sanctions.
"Hungary continues to implement major investment projects with Russian companies in the nuclear sector, transport engineering, chemistry. This creates the basis for further maintaining the trend of growth in trade turnover between our countries," - Bezrukov is sure.
In his opinion, it is now important to focus on finding new logistics solutions and marketing niches in order to use the current situation as a "time of opportunity" by applying a competent approach.
Now, more than ever, it is necessary to pay special attention to innovation, says Ivan Fedotov, Director of the Association of Innovative Regions of Russia. He noted that against the background of sanctions in innovative areas, there are common problems - the destruction of logistics chains, reduced availability of financial resources, etc. But, according to him, Russia has already found a possible solution, and several years ago.
"The research and development market is also undergoing changes. Large companies have suspended the financing of R&D centers in the country. But back in 2018, 15 world-class research and educational centers (RECs) were created in Russia. REC is primarily a relationship between business and science. If until February 2022 some large companies participated in the work of research and educational centers on a residual basis, now they are reviewing their relationships. Given the State support, the government's close attention to the RECs, we can actively develop high-tech developments," - Fedotov said.
The desire to maintain cooperation with Russia was expressed by Bruno Consonni, CEO of the Italian company RETTIFICA MECCANICA, which has been operating on the Russian market for about eight years.
"We always wanted to find common ground to create a joint production, but everything stopped because of sanctions. All logistics, financial support have become a huge problem - for example, making payments and receiving payment, just to place orders and fulfill them. We are excited about what is happening, but, nevertheless, we are ready to continue and strengthen our presence (on the Russian market) and look for a solution to go further together," - the businessman said, expressing a desire to visit Ufa and "see with our own eyes" what business conditions are provided there.
Austrian businessman, founder of Buben & Zorweg Harold Buben called himself a big fan of Russia and confessed his love for the country and its culture - and also that it hurts him to realize the current "unfriendliness" of Vienna towards Moscow.
"The worst thing that happens in the world is when countries try to interfere in the affairs of other countries and try to impose their own view on what is happening," - Buben believes.
According to him, Russia will definitely not lose under the sanctions, but will only increase its own economic independence.
"Russia got a little lazy, it was easier for her to import. But I suppose that's not necessary. You have your own capacities in order to become more independent," - the Austrian businessman summed up.
The participants of the discussion agreed to prepare an appeal to the European Parliament with a wide range of international signatories. Summing up the meeting, Andrei Nazarov noted the constructive position taken by the Russian authorities in the current difficult situation. He recalled that the President of the Russian Federation instructed to create the most favorable conditions for business, especially international.
"There are no checks and some other nuances that could worsen their work. This is a very important position. Despite what is happening, all conditions either remain as they were, or even improve for our partners. Therefore, we are proud of our president and support - and thank you to everyone who shares our position and works with us to overcome sanctions. Moreover, it is beneficial not only to Russia, but also to many countries that are involved in one way or another now, unfortunately, in this sanctions process," - he said.
