St. Petersburg Forum Helps Rebuild Trust, Develop EU-EAEU Dialogue

There are plenty of clouds on the horizon for the global economy, as the World Bank’s latest outlook report has confirmed. Looking at what has happened over the first half of this year and the risks ahead has forced the bank to cut back again its forecasts for global growth it made in January.Безымянный

The bank is right to be cautious. Political uncertainty has increased and is holding back investment and making global markets more volatile. Europe’s hopes of recovery, for example, have been badly stalled and confidence undermined by the upcoming UK referendum on the so-called Brexit on June 23.

Security concerns and the threat from extremism – something even a stable society like Kazakhstan has experienced recently – are also helping create a challenging environment. And where we should be seeing increased cooperation over trade, we are seeing divisions and calls for a return to protectionism.

Such calls may strike a chord with some audiences but they are not the answer to global problems. It is free trade that has been the motor for economic growth and rising prosperity right across the world and choking it off will only damage us all.

Kazakhstan stands as an example of this progress. The openness to investment and to partnership has been a major reason for the transformation of our country and the living standards of our citizens since independence. We trade successfully with countries around the globe.

Like many economies, Kazakhstan too is being buffeted by global forces. But we know that the best way of overcoming these difficulties and continuing to build a prosperous future is by being open, not closed, to investment and trade.

Our accession to the World Trade Organisation last year is a symbol of our determination to continue along this route. It is also why we are determined to do all we can to remove barriers whether it is playing our part in improving transport routes across Eurasia or forging new trade partnerships.

It is against this gloomy background but also with this goal in mind that Kazakh President Nursultan Nazarbayev travelled to the St. Petersburg International Economic Forum. He joined political leaders, senior business figures and experts from around the world for public, and private, discussions on how the global economy can be put back on track.

No wonder the Kazakh President called for dialogue between the European Union and the Eurasian Economic Union (EAEU), which brings together Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

“The EAEU is interested in a strong and stable EU and wants to cooperate closely with (the 28-nation bloc). Likewise, for Europe constructive cooperation with our integration union is beneficial,” he said at a plenary session of the forum.

He further proposed creating “an EU-EAEU forum for bringing together experts, scientists and business leaders and explaining to them what our union is about.”

Of course, much attention was paid to participation from European Commission President Jean-Claude Juncker, along with Italian Prime Minister Matteo Renzi. The former’s meeting with Russian President Vladimir Putin attracted much attention too, as it was the first one since the EU introduced sanctions on Russia in the wake of the Ukrainian crisis two years ago.

While the talks produced no breakthrough, the very fact that they took place is a step in the right direction. It is only through dialogue that problems can be overcome and a new tentative relationship – based on mutual economic gains – can begin to be forged which can bring big benefits for all countries in the wider Eurasian region.

The forum agenda covered a wide range of challenges and opportunities from the impact of mass migration to the role that drones can play in improving logistics. There were also sessions dedicated to how growth can be made more inclusive. As President Nazarbayev has said, we must ensure that every country and everyone shares fairly in rising prosperity.

But perhaps the dominant theme – rightly for a forum taking place in a city which represents the meeting of West and East – is the breakdown in relations between Europe and Russia and how they might be repaired.  Sessions focused on trying to identify a new model for the future based on economic co-operation and mutual respect.

The EAEU clearly offers the foundation for this new partnership. There is huge scope for removing barriers between the EAEU and the EU to encourage trade and give a welcome boost to growth. The long-term aim must be to create a unified trading bloc of nearly 700 million consumers.

It is often forgotten that the EAEU was a concept first proposed by President Nazarbayev over two decades ago. He has been very clear from the start that the union should be economic in nature and open in character.

Kazakhstan, of course, has every incentive and is in an ideal position to act as an honest broker. The country has excellent relations with both Russia and the EU. We have also been one of the countries outside the dispute over Ukraine which has resulted in the tit-for-tat sanctions imposed by the West and Russia on each other. These sanctions are an added burden on the global economy when it already faces enough serious challenges.

Rebuilding trust and relations between Russia and the West will not happen overnight. But small steps to improve economic links can play a big part in easing tensions while, at the same time, boosting global trade and prosperity.

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