Finans (Moscow) - November 17, 2008

On November 1-9, the business leaders' summit 'Russia-Latin America: Strategic Partnership and Profitable Investment' arranged by RBC was held in Chile and Argentina. The major topics of discussion were the search for a new global financial architecture and the key issues of trade and economic cooperation between Russia and Latin America.

All in all, RBC's summit mustered together roughly two hundred participants, including high ranking officials from Russia, China and Argentina, heads of major companies, and public figures. As such, the conference was attended by Ambassador Extraordinary and Plenipotentiary of Russia to Chile Yury Filatov, Ambassador Extraordinary and Plenipotentiary of Russia to Argentina Yury Korchagin, head of Russia's Federal Service for Veterinary and Phytosanitary Surveillance Sergei Dankvert (acting as chairman for Russia of the intergovernmental cooperation commissions with Chile and Argentina), chairperson of the Federation Council's information policy committee Lyudmila Narusova, chairperson of the Civil Society Institutions and Human Rights Council under the President of the Russian Federation Ella Pamfilova, President of the Association of Russian Banks Garegin Tosunyan, General Director of the Moscow International Business Association Alexander Borisov, President of the Russian Financial Corporation bank Andrei Nechayev, Vice President of the Independent Association of Machinery Manufacturers Alexei Yeryomenko, and many other Russian business people.

The event was held as part of the official program of the Days of Russia in Latin American countries supported by the Russian Presidential Executive Office, Foreign Ministry, and the Federal Agency for Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation. Among its partners, the summit counts the Russian Embassy in Chile and Argentina, Argentina-Russia Council of Entrepreneurs (CEAR), Chilean Ministry of Public Works, the Central Bank of Chile, and the Chilean-Russian Chamber of Commerce. The summit was opened in early November, after an almost month-long falling streak in stock indices globally. Naturally, discussion of the global financial crisis was inevitable, though the participants managed to make mainly positive emphases. Obviously, emerging economies were tipped to take advantage of the crisis to gain a stronger foothold geopolitically. The summit in Santiago and Buenos Aires has become another platform to voice the criticisms of the extant global financial economic system. "The crisis has revealed that it can only be solved by a global effort and that the world is gravitating towards a multipolar and multicultural model," said Foreign Relations Minister of Argentina Jorge Enrique Taiana. "Today, we have to offer the world solutions with more factors taken into account." This position was virtually a verbatim account of the favored stance of the Russian side these days. "The crisis has brought about a decisive transition from unilateral to multilateral solutions to global issues," observed Russia's Ambassador Extraordinary and Plenipotentiary of Russia to Argentina Yury Korchagin. "Together with Argentina, we are pressing for the democratization of international relations, which will eventually provide an impetus to business cooperation."

The Chilean side stressed that it was high time to capitalize on the opportunities opened up by the crisis. With regard to the cooperation potential between the two countries, Director of PRO CHILE for Moscow Fernando Belloni said, "We have to become a platform for Russia to enter Latin America, while Russia, in turn, may open up doors for Chilean businessmen to operate on the CIS market. The International Monetary Fund and the World Bank forecast economic growth for Chile and Russia even in conditions of an economic downturn - by 3.5 and 5.5 percent, respectively - and we must take advantage of it to begin negotiating a free trade memorandum. The Russian side has not only shown interest in the expansion of food supplies from Chile, but also outlined its interests on the Pacific Ocean coast. Russia is set to promote electrical, energy and machine-building equipment in Chile, which has already proven itself reliable in Latin America (in Argentina, for instance, Russian-made equipment is responsible for 20 percent of the country's total electricity output). "Additionally, we would like to bring aircraft to the market and set up assembly plants here," Sergei Dankvert stated. Despite the fair prospects, Russia-Chile economic relations still leave much to be desired. "Chilean-Russian relations have been lacking dynamism. Still, over the past six years, trade between our countries surged fivefold, from $50m in 2001 to nearly $300m in 2007. This, however, does not apply to mutual investment, which is at a mere $60m," said Chilean Minister of Public Works Sergio Bitar. Russia's Ambassador to Chile Yury Filatov linked the insignificant figures to a lack of awareness on both sides. "Why don't marketing specialists and advertisers work?" he questioned. "Furthermore, inter-bank cooperation is poor, which hampers large-scale projects."

Garegin Tosunyan felt the need to stand up for bankers. He believes investors are the major driver for trade and economic relations between Russia and other countries. "Large players are above all interested in European partners, as they are closer to Russia," he observed. "Latin America has always been in Europe's shadow. We don't travel here too often; we don't look each other in the face. As for state support for exporters, unfortunately, it does not extend as far as Latin America." Incidentally, Russian-Argentine turnover appears to be more impressive, with trade on top of $1.3bn in 2007. Yet, it is not all roses in terms of trade between the two countries. Argentina has not yet recognized Russia as a market economy. Accordingly, Argentina applies anti-dumping measures to Russian imports - steel, as such. Meanwhile, many goods from Argentina enjoy a 25-percent discount on import customs duties under the agreement on mutual trade preferences signed in 1993, as head of the Federal Service for Veterinary and Phytosanitary Surveillance Sergei Dankvert pointed out. Among other things, the discount applies to Argentina's vital export article - food. "Why doesn't Argentina keep the 1993 agreement? Should our government point to those mutual commitments by marking down the customs duty discount to, say, 10%?" Dankvert rhetorically exclaimed on the sidelines of the conference. Summing up the conference, many participants noted that it was the first time ever that a delegation of such a high level visited Latin America. President of the intergovernmental commission for trade, economic, scientific and technical cooperation with Russia Carlos Furche pointed to the meeting's international context, noting that it was staged in the run-up to November's Asia Pacific Economic Cooperation summit to be held in Lima, with President of Russia Dmitry Medvedev attending. Argentine Foreign Minister Jorje Enrique Taiana, in turn, said that the trade and economic discussions opened up at the RBC summit will be continued during Argentine President Cristina Fernandez de Kirchner's visit to Moscow scheduled for December 8-10, 2008. "Tax relations between Russia and Argentina will be the focus of the top-level meeting," he added.