The Russian nervous government, where the country faces economic challenges

At the International Economic Forum at St. Petersburg, the Russian MP came to me.

“Are you going to bomb Iran?” He asked.

“I am not planning to bomb anyone!” I answered.

“I mean you, the British …”

“Don’t you mean Donald Trump?”

The man smiled, “He told what to do by Britain.” “And on the deep state.”

It was a brief conversation. But he showed that in St. Petersburg this week there was more than people’s minds more than just the economy.

Take President Vladimir Putin.

On Friday, the Kremlin leader delivered the main speech at the forum’s plenary session. I focused on the economy.

But this is what the Kremlin leader said in the discussion episode after that, which made the headlines.

“We have an old base,” announced Putin. “Where you exceed the foot of a Russian soldier, this is our strength.”

Imagine that you are a country leader hosting an economically forum, looking for foreign investment and cooperation. The boasting of the foreign land seizure army does not seem to be the most effective way to achieve this.

But this is the point. Since Russia has been widely invaded to Ukraine in February 2022, the state of economics has been a secondary situation to win the war against Ukraine. This is the comprehensive priority of Karmlin. It is true that the Russian economy was growing, but to a large extent due to the huge state spending on the defense sector and the military industry complex.

Even this war -related growth is now coming out.

Putin did not seem very concerned.

“As far as it comes to” killing “the Russian economy, as a famous writer once said -” rumors of my death are largely exaggerated, “this is what the Russian president announced.

But the Russian government is clearly tense.

At the forum, the Russian Minister of Economic Development, Maxim Reshetnikov, warned that the country’s economy was swinging “on the edge of the recession.”

“It has grown for a fairly high rate due to the stimulation of unused resources,” said Russian Central Bank, Elvira Nabulina. “We need to understand that many of these resources have really exhausted.”

The International Economic Forum is designed by the Russian economy. Many of this shine faded due to thousands of international sanctions imposed on Russia on the war in Ukraine. Many western companies withdrew from Russia.

You may return?

After all, US President Donald Trump explained that he wanted better relationships with Moscow.

“Today we ate breakfast with the American Chamber of Commerce and many investors came from the United States. We have a feeling that many American companies want to return,” Kirill Dmitryv, President Putin’s envoy to foreign investment. We talked on the sidelines of the ST Petersburg Forum.

“I think the American administration realizes that dialogue and joint cooperation are better than the sanctions that do not work and harm your business.”

Nevertheless, Western companies are unlikely to return in large numbers while Russia launches the war on Ukraine.

“I think it is clear that you should have a somewhat conflict before American companies think about returning seriously,” said Robert Aji, head of the American Chamber of Commerce in Russia.

“Did you ask the Trump administration to remove some sanctions from Russia?” I asked him.

He replied, “We went to Washington.” “We have analyzed the effect of US sanctions on American companies. We have transferred this to management.”

“Do you accept that the idea of ​​returning Western companies is controversial in light of the war in Ukraine?” I asked.

“Western companies have made decisions based on what happened three or four years ago,” Mr. Aji answered. “It is up to them to report if this is the time to return.”

After more than three years of war and collective sanctions, Russia faces difficult economic challenges: high inflation, high interest rates, recession reports, and recession. The problems in the economy are now discussed and discussed.

It is not clear how long they will be resolved.