Question: Could you tell us about the plans for integration within the EAEU for the current year? What will Russia focus on as a chair country in 2023?
Answer: Cooperation within the framework of the Eurasian Economic Union is developing quite dynamically. In the current geopolitical and economic situation, joint work on the EAEU platform to a certain extent allowed minimizing the negative consequences of sanctions and restrictive measures by a number of Western countries against two member states – Russia and Belarus – and increasing the stability of the economies of the Union states. Important steps have been taken to support Eurasian businesses and citizens.
In its work within the framework of the Russian chairmanship in the EAEU this year, key attention will be paid to the implementation of the priorities that were formulated and outlined by President of the Russian Federation Vladimir Putin in an Address to the heads of the EAEU member states. Among them: ensuring energy and food security, as well as technological independence of key sectors of the economy, accelerating digital transformation; creating a common financial market; removing regulatory and trade barriers; developing transport infrastructure; climate agenda; building up scientific and youth exchanges. The priority is to launch the process of preparing new long-term planning documents that will determine the main vectors of integration cooperation for the period up to 2030 and 2045.
The development of the international agenda of the EAEU will continue, including in the context of popularization of the Union not only on the internal, but also on the external circuit. It is important to build mutually beneficial and equal cooperation of the “five” countries with foreign partners and international associations, to expand contacts with the states of the Asia-Pacific region, the Middle East, Africa and Latin America. Our association should become one of the key centers for the formation of a Large Eurasian Partnership.
Taking into account the proposals of Russian ministries and departments, a program of events of the Russian presidency has been formed. It includes about 70 meetings, conferences, round tables devoted to various aspects of the development of cooperation within the Union. For example, the Eurasian Economic Forum will be held in conjunction with the meeting of the Supreme Eurasian Economic Council (May 24-25, Sochi) with the participation of the heads of the EAEU member states. “On the sidelines” of the Eurasian Intergovernmental Council and the Council of CIS Heads of Government on June 7-9 in Sochi will host the III Eurasian Congress, the II Youth Forum of the CIS and the EAEU, as well as the international exhibition of cooperative projects “Eurasia is our home”.
Question: When is it planned to conclude agreements on free trade zones between the EAEU and Iran, the EAEU and Egypt? How is similar work going with Israel and India? When will the FTA negotiations with Indonesia and the UAE be launched?
Answer: The topic of concluding trade agreements with third countries is a constant focus of attention of the Eurasian Economic Commission (EEC) and the EAEU member states. At the same time, it is not easy to name specific deadlines for concluding an agreement, since the preparation of such documents is a lengthy process that requires serious analysis.
The negotiation process is most intensive on a full-format free trade agreement with Iran: six rounds of consultations have been held since November 2021. A promising task is the completion of negotiations this year and the signing of the contract.
The implementation of the EAEU-Iran Interim Agreement dated May 17, 2018, which provides for the liberalization of trade in a limited range of goods, has already had a positive impact on the mutual trade of the parties. During its operation (entered into force on October 27, 2019), the trade turnover of the Union states with Iran has doubled – up to $ 5 billion.
The preparation of a similar document with Egypt is consistently progressing. In October 2022, the fifth round of consultations took place, which contributed to further rapprochement of the positions of the parties.
Within the framework of cooperation with Indonesia and the UAE, I would like to emphasize the constructive attitude of all interested parties, thanks to which decisions on launching negotiations were taken very quickly. The first round of consultations with partners from the UAE is scheduled for the beginning of March this year, from Indonesia – for the end of March – beginning of April this year.
Recently, contacts between the EEC and India have intensified on this issue, but it is too early to talk about specific agreements.
The negotiation process with Israel after six rounds was practically “frozen” several years ago due to the lack of real benefits for the Union from the adoption of such an agreement, taking into account Tel Aviv’s position on the terms of its conclusion.
Question: Does Russia plan to leave the ranks of the IMF and WTO, taking into account the sanctions policy of the West and the Fund’s financial assistance to Ukraine? Why do we retain membership in these organizations at the moment? What negative consequences could such a step have for the Russian economy?
Answer: The Russian Federation has been a member of the International Monetary Fund since 1992. Joining the IMF was conditioned by the need for structural restructuring of the economy in market conditions and the need for resource support for these transformations.
Starting in 2000, Russia stopped attracting the Fund’s credit resources, and in 2005 repaid its debt ahead of schedule, moving from the role of a recipient of funds to a full-fledged partnership. Since the Russian Federation has fulfilled all its obligations to the Fund, it is not able to make demands on the economic policy of our country, and its recommendations are not binding for us.
After 2005, Russia participated in various financial operations of the Fund, including financing credit programs, development assistance programs, debt cancellation of the poorest countries. The IMF provided consulting support to our country, including technical assistance, seminars, and professional development of government officials. Russian relevant agencies periodically contact the Fund on the economic situation in the country and forecasts of the development of the world economy. All these issues have been discussed and are being discussed in the Fund with our participation and taking into account our interests.
From a foreign policy point of view, we proceed from the expediency of continuing full-scale participation in the activities of such a large and influential international financial organization as the IMF, which is an important element of the post-war economic world order, as well as a specialized UN agency. This has both an important image value and a purely practical interest in terms of access to advanced international financial expertise and involvement in the process of coordinating global economic initiatives and projects. Thanks to its membership in the IMF, Russia has the opportunity to participate directly in the work of the International Monetary and Financial Committee, which is a key advisory body of global financial governance.
Participation in the work of the Foundation makes it possible to use its platform to convey to the world community the Russian position on key economic issues of our time, including paying attention to the increasingly clear inconsistency of the current model of the global financial architecture and its excessive politicization.
Russia’s demonstrative initiative withdrawal from the aforementioned structure would most likely be presented by our detractors as a refusal to support countries in need and from the global development agenda as a whole. In addition, we should not forget that the Russian multi-country directorate at the IMF includes Syria, whose interests we actively defend.
It should also be borne in mind that membership in the IMF, regardless of our attitude to this structure and the existing disagreements, is still to a certain extent a “quality mark” recognized by the world community for the leading economies of the world.
As for the World Trade Organization, the issue of leaving this structure was indeed discussed in connection with the relevant initiatives of a number of deputies of the State Duma of the Federal Assembly of the Russian Federation. At the same time, to date, the position of relevant departments, including the Russian Foreign Ministry, has not changed – we still consider the WTO an important and uncontested platform for defending Russian trade and economic interests. Full membership in the Organization allows our country to participate in the development and improvement of global trade rules, promoting and protecting national priorities in this area. Active work on the WTO platform contributes to the implementation of tasks related to strengthening the presence of domestic economic operators in traditional and new foreign markets, expanding the nomenclature and geography of Russian exports.
A possible exit from the WTO would mean actual self-exclusion from the processes of the international division of labor, would lead to a decrease in involvement in global production and sales chains, would negatively affect the level and quality of foreign economic relations. Not a single State in the history of the GATT/WTO has refused membership in the organization. Given the high level of Russia’s integration into the world economy, such a radical step could lead to artificial self-isolation of the national economy.
Question: How do you assess the economic consequences for Russia from the introduction of a ceiling on oil prices – now and in the future? Can our country make significant profits in the future due to the growth of oil consumption, in particular, in the Asian region, where we have redirected our supplies?
Answer: In view of the decision of the EU countries to refuse to import Russian oil and petroleum products, the Russian fuel and energy sector has shifted towards closer cooperation and trade with friendly countries, in particular the Asian region, where demand for energy resources is growing at a faster pace. Nevertheless, it will take some time to establish full-fledged ties and create additional infrastructure to serve the growing needs of the oil and gas industry in the Asian direction.
The Russian Foreign Ministry is countering attempts by Westerners to draw friendly states into an economic confrontation with the Russian Federation. Washington and its allies regularly make attempts to expand the circle of countries that support restrictive measures introduced bypassing the UN Security Council, including the “price ceiling” for oil and petroleum products.
The application of discriminatory pricing in relation to Russian hydrocarbons will lead to the termination of their supplies, as stipulated by the Decree of the President of the Russian Federation of December 27, 2022. It is worth noting that most states refused to join the “ceiling” of prices. Western countries are trying to take advantage of their monopoly position in the financial and insurance services market to prevent the sea transportation of Russian oil. At the moment, there are no significant economic consequences from the introduction of conditional restrictions.
In coordination with the Ministry of Energy of Russia, work is being carried out with the main importers of our oil. At this stage, energy cooperation and trade with friendly countries continues without political reservations on their part.
Question: Do the BRICS partners show interest in creating a single currency of unification? Can we expect practical results in this direction by the end of this year?
Answer: It’s no secret that the current international financial system today primarily serves the interests of the United States and its allies. At the same time, the dollar, which is its cornerstone, has been turned into a weapon by Washington itself from a reserve currency. There is no doubt that Russia’s unlawful deprivation of the ability to dispose of its dollar holdings sent an unambiguous signal to the rest of the countries: the American currency has become a high-risk financial instrument.
In this regard, more and more countries are thinking about increasing the role of alternative currencies to the US dollar in mutual settlements. This trend can no longer be reversed. Our BRICS partners are well aware of this. The President of Brazil, L. Lula da Silva, recently announced the initiative to create common currencies within the framework of the association when used in mutual settlements. Prior to that, Russian President Vladimir Putin at the XIV summit of the “five” (June 23-24, 2022) proposed to think about the possibility of establishing an international reserve currency based on the basket of currencies of the BRICS states. And I must say that the share of non-dollar transactions between the BRICS countries is steadily growing.
In this context, it is not surprising that there are ideas of creating a single currency of the association, at the same time, it must be admitted that there are certain difficulties in this matter. Thus, the transition of two or more countries to a single currency will require the creation of a new issuing center and a regulator (analogous to the European Central Bank). However, the coordination of the order of its formation and the scope of powers, as well as the location, can be quite a difficult process. As is well known, the transfer of rights to issue money to a supranational body limits the ability to pursue an independent macroeconomic and monetary policy.
It would be more pragmatic to consider the hypothetical BRICS currency not as a replacement for the national ones, but as a new promising multilateral instrument based on a basket of currencies of the member countries of the association. One of the previously proposed models assumes the functioning of the BRICS currency as a reserve by analogy with special drawing rights issued by the IMF. But this option also requires in-depth study by the relevant Russian government agencies and their partners in the BRICS.
At the same time, it is important to understand that our association is not an integration one, that is, it is not aimed at forming a single economic space with unified norms in financial, economic, migration and other spheres. BRICS is a multifaceted strategic partnership, a sought–after platform for convergence of positions on a wide range of interstate dialogue. This is a very democratic format, no one imposes anything on anyone in it, there is no rigid block discipline characteristic of archaic military-political alliances. The Five are united by a positive agenda aimed at creating favorable economic and political conditions for the internal development of our countries and improving the well-being of their peoples.
Question: Is it possible to create a free trade zone based on BRICS, “BRICS plus”? How does Russia assess such a prospect? Are such discussions taking place within the framework of the association?
Answer: The issue of creating a free trade zone (FTA) on the basis of BRICS or in the expanded BRICS Plus format is not on the agenda at this stage. This task is not an easy one. Let me remind you that Russia has a common trading space within the EAEU. South Africa participates in the African Continental Free Trade Area. Brazil is a member of MERCOSUR. This is if we go through the tops, without taking into account the relevant bilateral agreements of the BRICS members with other associations, such as, for example, the agreement of India with the ASEAN countries. Regardless of the obvious complexity of agreeing on all possible nuances of creating a FTA of the “five”, taking into account existing multilateral agreements, the launch of discussions on this topic should be preceded by a comprehensive analysis for economic feasibility and added value for all participants from the creation of such a mechanism.
Question: What are Russia’s expectations from working with APEC in 2023? What are Russia’s goals for this year? In general, with which Asian countries is it now a priority for Russia to establish or deepen cooperation?
Answer: The Asia-Pacific region has traditionally been one of the key areas of Russian foreign policy. Today it is a major center of world trade and economy, a natural point of attraction in international relations.
Russia’s cooperation with the Asia-Pacific economies is characterized by progressive dynamics and concrete content, as evidenced by the stable growth of Russia’s foreign trade turnover with partners in the region. In recent years, even taking into account the consequences of the COVID-19 coronavirus pandemic, we have reached record levels with a number of countries. With China, for example, in 2022. the value volumes of mutual supplies increased by 29%, exceeding the figure of 190 billion US dollars.
Russia holds leading positions in the APEC forum and is the author of many popular initiatives. We are getting ready for further substantive practical work within APEC. First of all, we are talking about strengthening the multilateral trading system under the auspices of the WTO. Russia is also a dynamic supplier of hydrocarbons, food and fertilizers in this region. We intend to expand the range of our commercial turnover primarily at the expense of goods with “high added value”. We will promote Russian technologies, digital solutions, machine-building products, and agricultural products within the framework of APEC.
It is important to protect such interaction from illegal restrictive measures by Western countries, primarily the US and the EU. It is sad that they continue to unleash a spiral of geopolitical confrontation. Additional risks are provoked by the USA, the EU and the “seven” countries: one-sided forms of energy transfer, “printing press” inflation, illegitimate barriers to trade in Russian food and fertilizers. This accelerates the growth of prices for the basic needs of the population and business – energy and food, “hits the wallet” of ordinary citizens. We will strive to overcome these challenges by creating alternative trade, transport and settlement mechanisms in a coalition with other countries that do not depend on Western whims. We mean, in particular, China, the ASEAN countries and Latin America.
We will actively use the creative potential of the initiative of the President of the Russian Federation V.V. Putin to create a Large Eurasian Partnership, involving the construction of a broad integration circuit with the prospect of participation of the EAEU, SCO and ASEAN.
They are aimed at making a practical contribution to the work of APEC. We plan to pay special attention to the formation of convincing agreements that would be able to give an additional impetus to the global economy and international development. We are talking, among other things, about the promotion of initiatives and projects in the field of trade policy, global supply chains, carbon pricing, digitalization, development of remote and rural areas, women’s entrepreneurship.
We hope to preserve the non-politicized nature of the work on the priorities of the forum agreed upon with active Russian participation. His busy agenda for this year – interconnectedness, innovation, ecology, sustainable development – completely coincides with Russian interests.
Source: Russian Foreign Ministry
