The 2023 Sankt Petersburg International Economic Forum (SPIEF), Russia's world economy summit, was ignored by companies and policymakers from countries aligned with the EU and G7 economic sanctions against Russia.
While failing to project the "business as usual" image (link SPIEF 2023: How Kremlin tried to spin-off the big failure of the" Russian Davos" I ), the Kremlin focused on the new strategic direction it was forced to choose: the pivot away from EU and G7 countries to emerging economies in the Middle East and East Asia, with all the attached opportunities and threats.
"The UAE is a big focus"
SPIEF was initially conceived as a way to present Russian technology and investment opportunities to Western political and business leaders. SPIEF formerly attracted heavy-hitting attendees like Spanish Prime Minister José Luis Rodríguez Zapatero (2011), German Chancellor Angela Merkel (2013), Italian Prime Minister Matteo Renzi (2016, and French President Emmanuel Macron (2018). In 2014, 248 heads of major international companies and 40 international executives listed in the Forbes and Fortune rankings attended the Forum.
Virtually none came this year.
With Western leaders and business executives boycotting SPIEF for a second year, the 2023 event mainly saw foreign guests from the United Arab Emirates, former Soviet countries, Africa, and Cuba, which are largely neutral on the Ukraine war.
Only the United Arab Emirates agreed to partner with Russia for the event. UAE held the honorary status of the main guest of SPIEF 2023, as it sent a large delegation of ministers and business representatives.
UAE President Mohamed bin Zayed Al Nahyan met President Vladimir Putin in Sankt Petersburg before the SPIEF plenary session on June 16. "The Emirates' economy and social infrastructure are developing quite actively under your leadership and, in this respect, of course, the Emirates is a very good and amenable partner for us. The relations between Russia and the Emirates are developing quite successfully," the Russian president told his Emirati counterpart.
The pivot towards the UAE was brought up as an opportunity by Russian analysts and Kremlin officials. "We have to look for new partners, the UAE is a big focus, and we have a lot of meetings with them, discussing new projects and investments", said a former official of Russia's central bank, adding that "the atmosphere is normal, not very depressing. People don't talk much about Ukraine."
The UAE has replaced the West
In a panel at SPIEF 2023, Russian economic policymakers said they are surprised about how fast the global market rebalanced and how successful Russian companies were in redirecting much of Russia's strategic trade from West to East.
State media outlets and Kremlin-friendly organizations jumped in to hype the newly-minted dual partnership.
The TASS agency quoted Kyle Shostak, CEO of US-based Navigator Principal Investors, saying that SPIEF 2023 showed that the idea of Russia being isolated from the international community does not hold water. "Despite the fact that the total number of foreign participants was smaller than in previous years, this year's SPIEF refuted the thesis of Russia's international isolation. The East has replaced the West. This trend will obviously continue in the future. Russia will increasingly seek to orient its logistical, trade, and financial flows to markets in the Middle East and Asia", he said.
BNN Breaking, a news site owned by Gurbaksh Chahal, an Indian-American internet entrepreneur, described SPIEF 2023 as a" resounding success", as more than 900 agreements, totaling $46 billion, were signed during the event." The Forum, attended by 17,000 delegates from 130 countries, served as a platform for fostering economic cooperation and forging partnerships between Russian and international companies", reads the report.
BNN Breaking emphasized that the UAE boasted the largest delegation, consisting of 200 individuals: "This underlines the close economic relations between Russia and the UAE, which have been bolstered by various investment projects and collaborative initiatives".
A website called "Russia Briefing", which belongs to a consultancy company, writes that regarding the geopolitical landscape, Russia has made good progress in re-configuring its trade to the East: "This is a rapidly accelerating process, with opportunities throughout the region." The same source says that Russia is negotiating free trade agreements with the UAE, Egypt, and Indonesia, which are projected to come into force possibly from 2024.
The Russia-based Distributed Power Generation Association, an organization of companies operating in the field of power generation, published a text that praises the unique relations between Russia and the UAE, bringing some technical details:
- In 2022, export volume from Russia to the UAE grew by 71% to $8.5 billion, and import volume — by 6% to $ 500 million.
- The UAE is the first among the Arab states in terms of the volume of Russian investments, accounting for more than 42% of accumulated direct investments from Russia in the region.
- The UAE is the leader among Arab countries in terms of investments in the Russian economy (44%).
- Russia and the UAE are already implementing advanced astronautics, medicine, agriculture, energy, and IT projects.
- In the context of sanctions pressure, the role of the UAE in Russia's foreign economic activity has surged — the country has become one of the major trade and business hubs since the robust infrastructure and global ties of the UAE provide access to key international markets.
- To date, about 4,000 Russian companies have been registered in the UAE.