SITE’s director Torbjörn Becker made a presentation on Russia’s external economic links—challenges and opportunities at the international conference ”Evolution of International Trading System: Prospects and Challenges”

1. Russia’s external economic links—
challenges and opportunities
Torbjörn Becker
Director of SITE
Presentation at Saint Petersburg State University’s international conference
“Evolution of International Trading System: Prospects and Challenges” on
October 20-21, 2016

2. 1
External economic links—key facts

3. Russia and oil—uncertain future?
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Russian GDP and oil price

4. Russian trade—EU biggest partner by far
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Exports
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• Imports 2013 – 2015: -42%
• Exports 2013 – 2015: -35%
• EU’s share of total trade went from 50 to 45%
• But CIS (13%) & China (12%) still far less important

5. Russian investments—EU again main partner
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Por olio investments from Russia
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• Investments often through tax havens
• => Hard to know source and destination
• EU (and EU havens) major partner
• Most “real” FDI likely from EU

6. Swedish—Russian ties
FDI going down…
…as is portfolio investments
From T. Becker, “Investment Relations between Sweden and Russia”, forthcoming in Foreign direct
investment to and from Russia: Recent trends and international investment cooperation, Edited by Kari
Liuhto, Sergei Sutyrin and Jean-Marc Blanchard

7. Swedish—Russian ties
Diversification
vs
Concentration

8. Challenge or opportunity?
Russia without oil—some counterfactuals

9. “Putin does not see the end of the era of hydrocarbons”
“…many started saying that
the era of hydro-carbons was
coming to an end…no real
reason for such far-reaching
conclusion yet.”
”…Mankind is moving
towards green energy.”
President Putin at World
Energy Congress in
Istanbul quotes from
pravda.ru

10. Challenge or opportunity?
The future without oil(?)—mining the minds

11. Conclusions
• “No man is an island” (John Donne, 1624); development in
isolation is not an option even for super large Russia
• Current external links are too heavily focused on
exchanging natural resources for consumption and
investment goods
• Oil creates too much uncertainty and is not a sustainable
driver of growth for Russia or the world
• Oil (and other natural resources) still an asset that can be
used to transform the economy, but it needs to start sooner
rather than later
• Russia already has the potential to leverage its human
capital, use this!
• The EU, including Sweden, are natural partners for Russia
in this transformation, both for trade and investment, and of
course scientific meetings!

12. 1
Thank you!
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