June 2, 05:15 (UTC+3)

Globalization revisited: is every country on its own now?

CHALLENGES:

  • Globalisation outlook is hampered by the growing uncertainty caused by disappointment with the existing system of international trade and finance

“We understand that there are numerous challenges, that globalisation will continue, that it is essential. However, at the same time, it is hard to predict its future path since there are too many questions. Its format is likely to change,” said Andrei Bystritsky, Chairman of the Board, Foundation for Development and Support of the Valdai Discussion Club.

“WTO developments leave much to be desired. The US persuaded us most into the economic integration. And what we see now is a completely different policy with regard to the WTO. The APEC ministerial meeting in Vietnam in May showed that the US delegation has very strict instructions. Any reference to the fact that we are committed to the principles of the WTO, that we support open trade and similar messages were removed from the document,” said Igor Shuvalov, First Deputy Prime Minister of the Russian Federation.

“We actually are coming off the back of a golden age in a sense [of those international institutions]. The years from the beginning of 1990s until recently, there was confidence that the multilateral institutions could produce solutions to shared problems,” said George Mark Malloch Brown, Deputy Secretary-General of the United Nations.

  • Instead of adding to the integration, globalisation is becoming a tool for geopolitical struggle and strong economic competition

“In 2014, we considered sanctions to be a political tool, but now we understand that this is pure competition,” said Igor Shuvalov.

“The world is divided not between countries but within countries, between those who are winners of globalisation and those who feel they are relative losers,” said George Mark Malloch Brown.

“I think it is obvious that geopolitical tensions, cycle of sanctions and counter-sanctions certainly lead to uncertainty in the market,” said Daniel Russell, President, US–Russia Business Council (USRBC).

SOLUTIONS:

  • Russia and its partners intend to cooperate actively in the context of regional integration structures, but without undermining the foundations of the global trade

“The Russian Federation is now building the Eurasian Economic Union with its partners on the principles of the WTO. This is a core principle, and we keep declaring it. No other inventions, we will develop the WTO.“ “In negotiations with us, the People's Republic of China stresses that we all must defend the interests of the WTO, as this is the platform for real integration,” said Igor Shuvalov, First Deputy Prime Minister of the Russian Federation.

  • Russia will develop business relations with all stakeholders

“We can learn to do a lot of business with India, and we want to do it. But we do not want to cut business either with the European Union or with the People's Republic of China. For us, these are all paths, routes to go,” said Igor Shuvalov, First Deputy Prime Minister of the Russian Federation.

  • Russia is ready to collaborate more closely with Western financial institutions, but in view of the current international environment new development banks look more promising

“From the political perspective, what is happening to Russia within the World Bank, this should not happen <...> It is impossible to discuss the matters of political education at the World Bank and the IMF <...> Russia will be smart enough to develop both the BRICS format and the Asian Infrastructure Investment Bank <...> We will be quite satisfied if, in the formats where we are not allowed to work at full operating rates, these institutions – the World Bank, the IMF, the European Bank for Reconstruction and Development – will go back to their fundamental principles. These political motives and actions intended to limit us, need to go away,” said Igor Shuvalov, First Deputy Prime Minister of the Russian Federation.

  • Stronger role of business in the global economy

“It is quite obvious that geopolitical tension, i.e. the sanctions and counter-sanctions, certainly creates uncertainty in the market and restrains the emergence of new companies and increases production costs. What is also important, is that the voice of the business community should be heard here,” said Daniel Russell, President, Chief Executive Officer, US–Russia Business Council (USRBC).