SCO and BRICS Financial Forum

SCO Business Forum

St. Petersburg International Economic Forum 2015 has played host to the business forum of the Shanghai Cooperation Organization (SCO – China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan) for the first time. The business forum addressed the current agenda and long-range objectives of the SCO member states.

It was noted in keynote speeches that the SCO was created to ensure trust along the borders of the member states and that its chief priority was to ensure regional security and stability by drawing on the potential of political and diplomatic measures, which called for substantive additions via the programme of trade and economic engagement. In 2005, the SCO Business Council and SCO Interbank Association were established.

The emergence of the Eurasian Economic Union (EEU) necessitates a new formula for trade and economic engagement.

Work must be done to align the concepts of trade and economic cooperation between the SCO member states, the new integration bloc – the Eurasian Economic Union – and the concept of the economic belt proposed by China President Xi Jinping around the projects New Silk Road and 21st Century Maritime Silk Route. These projects implement the idea of an Eastern China–Western Europe transport corridor.

The SCO member states supported the New Silk Road project and founded the Asian Bank and Infrastructure Investment Fund. The SCO Bank will also support joint infrastructure projects. Settlements between the member states could be made in national currencies, bypassing European and American banks. To this end, engagement and alignment of the national payment systems must be ensured.

Small and medium-sized business could be involved in these projects.

On 10 July 2015, the SCO development concept for up to 2025 is expected to be adopted at the next SCO summit in Ufa, and, in December 2015, some 70 projects within the framework of trade and economic cooperation between the member states will be submitted to the meeting of SCO country prime ministers in Beijing.

Another relevant challenge is to align the interests of the SCO and the EEU. This calls for creation of a barrier-free environment for implementing the strategies of the SCO and EEU member states. In order to reduce the implementation period for specific projects, stakeholders need to establish a project development centre and introduce digital services for increasing the effectiveness of all processes. The SCO Interbank Association proposed creating an International Project Financing Centre.

A centre for legal consultations and settlement of commercial disputes should be established as part of the campaign to improve collaboration mechanisms, alongside the SCO Regional Council as a platform for small and medium-sized business. The first interregional SME forum of the SCO member states is scheduled to take place in Ufa in October 2015.

Moderator: Sergei Katyrin, Chairman of the Russian Section of the SCO Business Council; President, Chamber of Commerce and Industry of the Russian Federation

BRICS Business Forum

For the first time, the BRICS Business Forum has been held as part of SPIEF. Businessmen and Russian officials took part in the forum, discussing the current situation and the prospects for developing cooperation among the BRICS member states.   

Establishment of BRICS creates a new window and new opportunities for all member states. Today, BRICS reflects the potential of the future. The aggregate indicators of the bloc’s share in the world economy are rising by the year.

Since 2008, BRICS has been a political reality; in 2012, the BRICS Business Council was established and, in 2014, the BRICS Development Bank and Currency Reserve Fund.

The newly established BRICS Development Bank will need to cooperate closely with the banks of the BRICS member states, to become a financial centre for settlements in national currencies. The bloc’s nations need to protect their resources and independence against external currencies. Real rapprochement and development of economies is only possible on the basis of national currencies.

In 2014, Russia submitted a proposal on the BRICS economic partnership strategy, outlining growth points and targeted sectors for mutually beneficial cooperation and development.

Russia’s roadmap includes 50 varying projects that may be implemented on a multilateral basis. One of them is the project to develop e-commerce tools aimed at boosting trade, investment exchange and a search for growth points.

A roadmap for the BRICS Development Bank is being developed. The market of the BRICS countries is huge. Trade is growing but businessmen from the different countries do not know each other well yet. New mechanisms of cooperation are needed, such as a united organization for trade and exhibitions providing for direct contacts between businessmen. Such contacts should lead to joint projects and new business opportunities. Small and medium-sized businesses will also be involved in carrying out promising projects. Particular attention must be paid to the needs of such businesses.

Through joint efforts, global projects can be implemented like the Great Silk Road and the Maritime Silk Road offered by the Chinese leader Xi Jinping with a view to creating an international Europe–Asia economic belt and the transport logistics corridor from China to Europe. To implement these projects, an infrastructure development concept is required and its integration with the infrastructure of the BRICS nations. Something has already been done in this respect: the Trans-Siberian Railway and Trans-Korean Railway. It is necessary to work not only in the interests of national markets but also in those of third countries.

To remove the existing administrative barriers (customs and technical regulation, insurance, visa regulations, staff issues, etc.), a special taskforce should be set up within the framework of the BRICS Business Council.

In order to enhance cooperation, there are plans to create a Council of the regions of BRICS nations. The memorandum on this has been drafted by Russia’s Foreign Ministry and is being agreed with the member states.

The role of the systemic platform for all BRICS business participants can be played by the First Interregional Forum of the Small and Mid-Sized Businesses of the SCO and BRICS nations, which will be held in Ufa in October 2015.

The mutual information vacuum must be liquidated through business missions, expositions and exhibitions. A consultative council for exhibitions is required for this.

BRICS has a unique opportunity for accelerated joint development of its economies. The BRICS Development Bank should invest actively in joint projects.

In 2016, Moscow State University opens a branch in China to prepare specialists for implementing the grand projects of the 21st century.

Sergei Katyrin, Chairman of the Russian Section of the SCO Business Council; President, Chamber of Commerce and Industry of the Russian Federation