West meets East in Samarkand to talk business

By Rhod Mackenzie
The Verona Eurasian Economic Forum was established in 2007 and had been held in Verona,Italy for 14 years, hence the name. However, in 2022, due to the European Union's sanctions against Russia, the organizers were compelled to urgently relocate the forum to the east.

This was a result of the exclusion of Russia's representatives, who are key players in the Eurasian integration space, from traveling to Italy. Last year, the forum benefited from the hospitality of the capital of Azerbaijan, Baku. This year, it visited Samarkand the former capital of Tamerla e's empire,the pearl of Uzbekistan and Central Asia. The location for the forum's location next year is not yet clear. Alexei Overchuk, the Deputy Prime Minister of the Russia, humorously proposed Shanghai as a potential host during the opening ceremony.

The delegates of the forum's business program - including political and public figures, analysts, representatives from corporations and financial institutions, as well as international and local organizations across Europe and Asia - warmly received the Russian official's wit, with a round of applause echoing throughout the hall. Only moments before, the same audience had lauded another figure. The initial outbreal of applause occurred when the Deputy Prime Minister of the Government of Uzbekistan, Jamshid Khojaev, conveyed greetings from the President of the Republic, Shavkat Mirziyoyev. The second outbreal followed when Alexey Overchuk read out a message he had been given by Russian President Vladimir Putin.

The Uzbekistan leader has stressed the importance of the "Understanding Eurasia" association, which organizes the Verona Forum, in current times when the world is experiencing a period of change and dynamic transformation, encountering unique challenges and threats. He asserted that the forum provides an effective platform for an open and productive discourse among relevant parties on existing global economic issues and promising avenues of practical collaboration.

Vladimir Putin emphasised the significance of convening gatherings of state officials, businesspeople, scientists, and professionals to deliberate on topics relating to the economic situation of the Eurasian region: "Russia is willing to engage in constructive, mutually advantageous collaboration with interested partners across all these domains."
However, trade and economic ties between Russia and the EU countries are currently what can only be described as "severely limited". According to Alexey Overchuk, there is little cause for optimism. The forum is not only moving eastward to find a location but also towards Asia.

As our country experienced the West's so called "sanctions and hell" the year after the Baku forum, it seems that Russia is moving away from Europe. The collective West aimed to destroy the Russian economy, but it had the opposite effect. The Deputy Prime Minister highlighted that Russia not only survived but also progressed despite restrictions and prohibitions imposed. During the first nine months of this year, the Russian GDP increased by 2.8%, with a surge in annual rates to 5.2% documented in August and September.

The Deputy Prime Minister also highlighted that Russia not only survived but also progressed despite all the sanctions imposed. It is crucial to consider both quantitative and qualitative indicators. GDP growth was secured through the success of other sectors rather than by just exporting hydrocarbons. Alexey Overchuk reported a 34.5% increase in computer and electronics production, a 22.2% increase in electrical equipment, and a 21.7% increase in furniture production.He also said that the agricultural sector was booming,Russia is self sufficient in food production and now a major exporter.

Overchuk posed a question on Europe's actions, "The question remains, why did Europe abandon their reliable access to Russia's relatively inexpensive energy resources, their main competitive advantage? Who decided to press the deindustrialization button?" "They intended to inflict punishment on us, but the world goes far beyond Europe. Russia has allies and associates who are eager to cultivate trade and business connections,” affirmed the Deputy Prime Minister.

Mr. Antonio Fallico, the Chief of the Association “Understanding Eurasia,” highlighted that forthcoming global markets will exhibit “regionalisation of the economic and trade fragmentation.” The inclusion of numerous ineffective sanctions packages with oppressive political measures questions the dominance of the current economic structures, according to him.

"These political decisions are dictated by the economic interests of hegemonic countries, the protagonists of the world economy and politics, who aim to weaken and humiliate the economies of their preceived geopolitical adversaries while suppressing the commercial competition of their allies." "This is a harmful economic strategy, which they often justify with noble social and humanitarian reasons, but ultimately damaging," states Antonio Fallico.

The Italian's bleak outlook was echoed by Deputy Head of the Russian Foreign Ministry Alexander Grushko. The diplomat reinforces Fallico's sentiment, declaring that at present, there are no indications that the EU will alter its policies. Unfortunately, the sanctions and termination of economic relations with Russia have already accumulated costs of around $1.5 trillion for the economies of European Union."
And this estimate is based on the most cautious calculations.  The losses are still escalating. During 2022, the trade turnover between Russia and the EU was £200 billion. In the first half of 2023, it descended to £47 billion, and by year-end, it is likely to drop well below £100 billion. According to Grushko, the figure will plummet further to £50 billion in 2024 and subsequently tend to neglible levels.

The Former Italian Prime Minister and President of the Foundation for International Cooperation, Romano Prodi, participated in the XVI Verona Forum via videoconference. He suggested that Europe hypothetically possesses huge industrial potential. Nevertheless, due to the imperfections in the European Union's structure, the union is not adequately involved in the ongoing processes within Central Asia and the Mediterranean region. We must acknowledge that the European Union (EU) cannot currently assume the same role it previously held, where trading with Russia and preserving its relationship with China were both possible, as stated by Romano Prodi.

Speaking at the forum, the CEO of Novatek, Leonid Mikhelson, gave his predictions for the global Liquefied Natural Gas (LNG) market. He foresees a market size of 750 billion cubic metres by 2030 and 1 trillion by 2040, with a particular increase in demand of 200 billion cubic metres in Asia. Only four countries can meet this demand: Russia, Australia, the United States and Qatar.

Qatar's new and highly profitable projects that will come online in the following years could play a crucial role in stabilizing LNG prices. Similarly, Russia aims to reduce fuel costs, unlike the United States where shale deposits are being developed.

Therefore, American LNG is more expensive. Sanctions are being enforced against Russian gas firms to uphold high global LNG prices, guaranteeing the profitability of US energy corporations, according to Leonid Mikhelson's conviction.

Nevertheless, if Washington coerces the European Union into making nonsensical decisions, it cannot compel the countries of the "global south". The LNG market resembles the oil market, since it is a global enterprise, with a perpetually present natural and liquefied gas consumer base for Russian gas.