Last month, the International Monetary Fund predicted that the Russian economy would be able to withstand in 2023 for the second year in a row, despite the war and sanctions, but in the medium term, growth prospects appear limited.
To counter Western sanctions and their impact on the economy, the Russians are leading an intense campaign to attract investments from the wealthy Gulf states to their country.
At the annual investment forum held this week in Abu Dhabi, the Russian government presented investment opportunities in the Russian market in two forums and a special pavilion to bring together Russian companies with investors, stressing that the Russian economy is fine despite the repercussions of the war.
Russian businessmen in the Gulf
“We are here to attract investors, whoever they are, including the Arabs,” Pavel Klamychik, acting director of the bilateral cooperation program at the Russian Ministry of Economic Development, told AFP.
Most Gulf countries distance themselves from the Ukrainian file. The UAE and Saudi Arabia refrained from criticizing Russia, although they called for an end to the war. Wealthy Russians flocked to the UAE over the past two years, establishing businesses and buying real estate to escape the sanctions imposed on their country.
Since its invasion of Ukraine in February 2021, Russia has been subject to increasingly severe sanctions imposed by the United States, the European Union and their allies, targeting political figures, industry, banking and the oil sector.
Moscow redirected its trade relations from West to East, especially with increasing the level of its oil exports to China and India, with the aim of reducing the impact of sanctions.
Russian Minister of Economic Development Maxim Reshetnikov confirmed that cooperation with the countries of the Middle East and North Africa region is “one of the priorities of Russia’s foreign economic policy,” which was issued last March.
In a speech he delivered during the Russia-Middle East Forum, he considered that “it is the right time to develop joint projects by seizing the new opportunities that open up,” calling for the establishment of a “financial and banking system independent” of Western countries to facilitate financial transactions and circumvent sanctions.
In the “Hall of Opportunities,” where the word “Moscow” was written in English on a large screen, representatives of the Russian authorities showcased the capital’s potential as “one of the largest urban economies in the world and the largest in Russia” and as an investment destination.
“Even in these not easy times when we are subject to sanctions, Moscow is still a leader,” said the capital’s government minister, Sergei Sheremin, referring to its infrastructure, transportation, technology, industry, tourism and more.
“For foreign investors, Moscow offers a number of competitive advantages. It is the entry point to the Russian market,” he added.
The white color dominated the Moscow pavilion, which was decorated with seedlings, and in the middle of it was a high wooden table on which Russian and Arabic sweets and coffee were served for visitors.
At one end of the booth, Maxim Anismov, co-founder of a startup, was explaining the importance of a Russian-designed and manufactured 3D printing machine on display. “We are here to attract Arab partners, and this matter is important to us. I know that there is a lot of development and opportunities in this region,” he told AFP.
High exchange volume
The volume of trade exchange between Russia and the Gulf countries increased by 40% in 2021 compared to the previous year, to reach $8.6 billion, according to officials.
In 2022, the level of trade exchanges between Russia and the UAE will increase by 68% to reach $9 billion, according to Russian Deputy Prime Minister Denis Manturov. According to Russian media, this figure represented about 55% of the total trade exchange between Russia and the Gulf countries last year.
“Gulf sovereign wealth funds have opened up to Russia over the past decade, often in coordination with the Russian Fund for Direct Investments,” said Justin Alexander, an economist on Gulf affairs from the Gulf Economics advisory group.
He added, “But these investments are relatively small compared to what they have in Western countries.”
In the Moscow pavilion, Emirati engineer Adnan Al-Nimr Al-Zarouni confirmed that he is interested in investing in Russia, because it is “a big country and has many great opportunities,” adding that it “is rich in minerals, livestock, energy, agriculture, technology, and has high-level programmers.”
Last month, the International Monetary Fund predicted that the Russian economy would be able to withstand the year 2023 for the second year in a row, despite the war and sanctions, but in the medium term, growth prospects appear limited.
In Abu Dhabi, the head of the “Roscongress” organization that organizes the St. Petersburg International Economic Forum, Alexander Stagilev, confirmed that “the Russian economy has shown resilience and the ability to grow under difficult circumstances,” calling on those interested in developing partnerships and business in Russia to participate in the forum scheduled for June. next June.
He pointed out that “the withdrawal of Western companies from the Russian market created opportunities for other companies that plan to develop their business in Russia.”
Since Russia’s military intervention in Ukraine, well-known Western groups have suspended or reduced their operations in Russia, including BP, Shell, McDonald’s, H&M, and Coca-Cola.