Russia Scaling Back at Economic Forum

The global crisis continues to affect Russia, including its premier economic forums, long held as indicators of the country's economic health. The mood is very different this year at the St. Petersburg Economic Forum, the main economic and investment event in the Russian Federation, which draws the top commercial and political elites from all over Russia and the world. The Forum's budget is scaled back significantly, and even the entertainment for the rich and influential will be different - last year's "Pink Floyd" concert will now be replaced by the music group "Duran Duran." The guest number has been cut from 2,500 to just 1,500, and each will be fed by traditional Russian cuisine at 100 Euros per person. Last year, participants arrived on private yachts that barely fit on the embankment of the Neva River. Now, according to the St. Petersburg Governor Valentina Matvienko, everything should be done "modestly, but with dignity." This year, instead of sailing to town on their yachts and private ships, the businessmen will arrive on their personal aircraft - St. Petersburg "Pulkovo" airport is prepared to accept 150 private planes.

At the opening of the Forum, Anatoly Chubais - former MP and Chairman of Russian Nanotechnologies State Agency - signed an agreement to create the largest production of solar cells in Russia, and commented on major economic issues and trends: "No one can say what will happen to the economies of China and the United States. It is now clear that Russia is fully dependent on them." Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, joked: "If we all stand on our knees and pray for the U.S. economy to revive, our country will also bounce back from the crisis."

Elvira Nabiullina, Minister of Economic Development, confirmed that the risk of the "second wave" of the crisis still exists, but in her opinion, Russia has all means to weather the troubles. According to Sergei Polonsky, chairman of one of the largest real estate companies, "this autumn in Russia, there will be a sharp increase in property prices - real estate will cost more than before the crisis."

Russian business was presented in the former imperial capital by the country's commercial elite, since the absence at the forum can be regarded as a sign that one's company is in trouble. Politicians and economists have also sought to reassure investors and businessmen - the Head of Russian Savings Bank German Gref said that the fall in GDP in Russia is slowing down every day: "In the second half of the year, we will see stabilization, after which the country will begin the economic revival."

At the forum, Minister Nabiullina met with Catherine Ashton, European Commissioner for Trade. Both discussed the possibility of Russia's entry into the World Trade Organziation. Nabiullina noted that this year Russia marks the sad date - 16 years of country's attempts to join the WTO. At the end of negotiations, it was stated that Russia may join WTO before the end of the year.

Belorussian President Lukashenko spoke to the Russian media about his country's relationship with the Russian Federation, noting that his republics's strategic support for Moscow is "priceless." With that backdrop, he noted that Russian economic assistance to Minsk during current global crisis is "inadequate." Speaking of the external threats to Russia (in particular, on the part of NATO), he said that "no tanks ever had an easy path through Belarus towards Moscow, and this will remain for the time being." The President urged Moscow to pay closer relationship to the strategic importance of Belarus to Russia: "You think that ten million people who are now a shield for Moscow - is that free? Is Belarus unimportant to you? Important. Who now performs an important function? Belarus - Air Defense, Army and so on. You that think that all of this should be pro bono?"

In the autumn 2008, Russia has agreed to grant Belarus a two billion dollar stabilization loan, but so far, Minsk has received only $500 million from this amount. Some observers believe that further financial support depends on the consent of the republic to recognize Abkhazia and South Ossetia, which was long sought from Belarus by the Russians.

In an interview, Lukashenko did hint that money was offered for the the recognition of the two break-away Georgian republics: "I said to the Russian leadership that we can solve this problem. But nonetheless, they said that if we recognize Ossetia and Abkhazia, there will be $500 million dollars." During the interview, Lukashenko gave no definitive answer whether his country will recognzie the provinces.

Ongoing opposition protests in Georgian capital Tbilisi are becoming more dangerous to the participants - on June 3rd, unknown individulas kidnapped two female activists of the youth wing of "Democratic Movement - United Georgia," headed by Nino Burjanadze, former Speaker of the Parliament. The criminal investigation has been launched into the event, but the Ministry of Internal Affairs has not officially commented about the incident. The victims reported that the kidnappers pushed them into the jeep, took to the outskirts of Tbilisi, and stopped near the cemetery. The young women were asked questions about their political party, and one of them was beaten. Both activists were released about six hours after the abduction.