Translation. Region: Russian Federal
Source: State University Higher School of Economics – State University Higher School of Economics –
The geopolitical fragmentation of the global economy opens up new opportunities for Russia to cooperate with the countries of the Global South and strengthen its own role in global processes. This is stated in the HSE report presented at the St. Petersburg International Economic Forum as part of the VTB session.
Analysts emphasize that the global economy is currently divided into three large blocs – the United States, China and non-aligned countries, which is accompanied by a reduction in trade and investment between them by 12% and 20% since 2022. Despite this, developing countries are increasing their share in world trade: the volume of trade between the countries of the Global South has grown from $2.3 trillion in 2007 to $5.6 trillion in 2023. This indicates the formation of new economic ties and growth centers.
The report notes that the reversal of trade imbalances in 2024 – with the US deficit widening and China’s surplus rising, and the EU moving into positive balance – creates risks of new trade wars and investment reallocation, requiring companies to diversify supplies and expand their partner networks. Logistics challenges caused by conflicts in the Middle East and problems in the Suez and Panama Canals are stimulating the development of alternative routes, including the Northern Sea Route and “green corridors” for the accelerated delivery of critical cargo.
Particular attention is paid to the role of the so-called connector countries – Malaysia, Vietnam and India, which are strengthening trade ties with individual partners, while Russia, Australia and the EU are reducing their dependence on traditional markets, which contributes to the formation of sustainable regional trade turnover.
In the Russian context, experts note that human capital is becoming the main resource for economic growth: the average length of education for Russians aged 25–44 is 14 years, which is higher than in the US and Europe, but further investment in science and R&D is needed to realize this potential. In the context of the crisis, Russia has seen an increase in the production of high-tech products, the development of domestic tourism and paid services, as well as an increase in exports, which are less sensitive to sanctions.
Investment activity is most noticeable in the small and medium enterprise sector and in the production of investment goods, which contributes to the diversification of the economy and the creation of new jobs. Key challenges include tightening monetary policy, rising credit costs, labor shortages and tax pressure, especially in the manufacturing industry.
The authors of the report emphasize that a balanced budget policy and support for those employed in the public sector are necessary for macroeconomic stability, and sustainable growth is possible only with the simultaneous strengthening of the internal and external sustainability of the economy. In conditions of turbulence, Russia can play a key role in the formation of a new architecture of the global economy, focused on cooperation with the countries of the Global South and the creation of alternative development models.
The report was prepared as part of the VTB session “In Search of New Sources of Growth: Is a Different Model of Global Financial and Trade Architecture Possible” at the St. Petersburg International Economic Forum. The session was attended by: Andrey Kostin, President and Chairman of the Management Board of VTB Bank; Yaroslav Kuzminov, Academic Director of the Higher School of Economics; Ahmed bin Mohammed Al Sayyed, Minister of State for Foreign Trade of Qatar; Oleg Deripaska, Founder, En Group; Serhat Keksal, President of the Black Sea Trade and Development Bank; Alexey Overchuk, Deputy Prime Minister of the Russian Federation; Benedict Okey Oramah, President and Chairman of the Board of Directors of Afreximbank; Anton Siluanov, Minister of Finance of the Russian Federation.
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