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Diplomacy and Business

6-04-2009, 17:57

 

 

Russian Foreign Minister S. V. Lavrov, in an interview with A. G Oganesyan, edi tor-in- chief ofthe International Affairs journal, and V. V, Makarov, editor-in-chief of the Partner TPP RF magazine, spoke about diplomacy and economic diplomacy, politics and business, and globalization processes and world politics.

Q: Sergei Viktorovich, a specific feature of World War II and the Cold War was that, first, the struggle for survival, and then ideological confrontation pro vided motivation for the development of scientific and technological progress at the level of states and personalities. Essentially, antagonism in international relations was a source of technological breakthroughs. Today, we are seeing a new type of development on the global level. What could motivate the world com munity, which is so full of contradictions, to cooperate and advance economic development in the present conditions?

A: In the ongoing globalization processes, especially in the context of an emerging polycentric world order, it is not an easy task to make forecasts with regard to specific directions along which a new technological foundation of the global economy will evolve.

You are right in that contradictions remain an essential characteristic of international relations today. The current transitional stage of global develop ment as such is contradictory, which consists in making the choice between a genuinely collective approach toward dealing with international issues and the realization that unilateral solutions are counterproductive, on the one hand, and the instincts and prejudices of thinking based on bloc affiliation, inherited from the Cold War era, on the other. As always, the new is struggling with the old, and the proponents of a return to the past always pursue selfish interests, which they will strive to uphold in the future.

At the same time, a significant potential for change has accumulated in the world. Today, mankind on our planet is faced with the problem of survival. This is what the global challenges and threats confronting all states are, basically, all about. This refers to the fight against international terrorism, piracy at sea, and the danger of the proliferation of weapons of mass destruction, ensuring energy security, and the need to resolve regional conflicts, eliminate poverty, hunger, and infectious diseases, stop climate change, and protect the environment.

Therefore, they can be effectively countered only through collective efforts. This gives the world community as a whole strong motivation for a new techno logical breakthrough. In particular, with the aim of bringing economic and other forms of activity in line with the planet´s limited resource base, which presup poses new resource saving and waste-free technology. During the well-known period of euphoria immediately following the end of the Cold War, the ideas of sustainable development were unjustifiably forgotten, buried in oblivion. Furthermore, an attempt was made to return to "pure" liberal capitalism, encum bered neither by any moral considerations nor by an understanding of social or any other responsibility. We can see what this has led to. So sustainable devel opment, alongside a search for ways out of the current crisis, constitutes a sig nificant part of a unifying agenda for the world community. What is involved here is an evolutionary transition to a new model of economic development, which will be based on the use of high technology and intellectual capital, as well as the broad dissemination of innovation.

I would like to hope that the ongoing global financial and economic crisis will provide sufficient argumentation in favor of abandoning ideological con frontation, which should be replaced by an understanding that we are all "in the same boat." This is the only basis - pragmatism and common sense - on which cooperation in the interest of sustainable development of the global economy and scientific and technological progress is possible.

The experience of recent years not only shows that existing problems cannot be resolved with approaches that rely on force, but also that they are counter productive. The structure of vital services to ensure the existence of mankind, created in a globalizing world, has become so fragile that it will simply not be able to survive a war. So one can only hope that we will not repeat the history and experience involved in overcoming the Great Depression on the borderline of the 1920s-1930s - i.e., a solution that was found along the lines of the milita rization of the economy and international relations, which, in turn, became a key factor in the outbreak of World War II and then the Cold War.

Q: While considering global problems, we should not forget about the lessons of the financial and economic crisis that is now affecting the world, and Russia in particular. During this crisis, we have also been confronted not only with a lack of global regulation but simply the inability to coordinate positions. Is such coordination and regulation possible in principle amid general instabil ity in the international security sphere? Is this not the reason why so many voic es are being heard in favor of the status quo?

A: Needless to say, the global financial and economic crisis has demonstrat ed the imperfection of the modern mechanisms and methods of regulating world economic ties, their obvious inconsistency in the context of the present-day real ity. It would not be an exaggeration to say that it arose from the economic unipo-larity that had been artificially cultivated and that had created a deep imbalance in the entire system of international economic ties.

Obviously, the prime cause of the upheavals is the crisis of the ideas of lib eral capitalism, and this puts all countries, including Russia, in the same position in the framework of discussions about the further lines of social and global devel opment. It is important that the crisis is literally prodding everyone toward col lective action to overcome its effects and determine the new parameters and sources of economic growth in the interest of sustained development. Naturally, taking into account the lessons of the crisis, there is also a need for effective "safety fuses." The restructuring of the global financial architecture will objec tively facilitate the further deideologization and demilitarization of international relations, which will provide additional guarantees against the outbreak of large-scale conflicts involving the use of force.

Collective measures in response to the crisis should be of a systematic and long-term nature. This is not only about overcoming economic recession and achieving a positive development trajectory. The reform efforts should ultimate ly lead to the creation of a more stable and fair global economic model, based on polycentrism, the rule of law, respect for the interests of other parties, and col lective responsibility. We believe that the parameters of a new global financial architecture should be formally recorded in international conventions and agree ments. Only then will a new system become legitimate and start to enjoy the trust of the entire world community.

Are all these transformations feasible? I believe that they are. In any event, the world community has no other options. Otherwise, we will eventually be faced with a recurrence of the crisis: The global economy is simply not in a posi tion to endure for very long the burden of imbalances and shortages that accu mulated under the previous system. I hope that our partners share this under standing.

Russia is generally satisfied with the ongoing work in this direction in the framework of the G-20, the G-8, and other forums, and organizations, including the UN. We believe that multilateral efforts to overcome the crisis, reform the international financial architecture, enhance the effectiveness of the regulation and transparency of the financial sector, and restore trust on world markets have been set on the right course.

Nevertheless, naturally, much work still lies ahead. We hope that dialogue on the ways of building a new, fairer and more transparent system of global eco nomic and financial regulation will continue. This is, in particular, the aim of the upcoming meeting of the G-20 leaders in Pittsburgh, set for September 24-25, which will be attended by President D. A. Medvedev.

Q: Still, history shows that the development of international relations is a process that is difficult to predict. Should new cold wars be expected? In this context, what role could Russian business play in strengthening peace, security and cooperation?

 

A: Russia does not seek confrontation with anybody. There are simply no grounds for that. We do not impose anything on anybody - we only want to achieve general understanding with regard to where the world is headed and what needs to be done to ensure collective security for mankind in its modern interpretation. Therefore, any wars - "cold" or "hot" - are not in our interests. We are resolved to develop cooperation with all states willing to cooperate, on the basis of equality, respect for each other´s interests and mutual benefit, as well as to promote a positive, unifying agenda in international relations.

I do not think that we should expect any "cold" wars. Today, all countries are facing tasks that are closely linked to the idea of sustained development. Although in theory, nothing can be ruled out: Some countries can be tempted to use some well-known schemes to divert attention from the economic or other problems that they have encountered. We have seen this before, and our reaction will be balanced and appropriate.

As for the role of Russian business in strengthening peace, cooperation and security, the answer is self-evident. The expansion of multidimensional, mutual ly beneficial cooperation with our foreign partners, our effective and complete integration into the global economy, and the diversification of Russia´s presence on world markets by expanding the range of its exports and the geographic pattern of foreign economic and investment ties objectively enhance our country´s stature and influence in the world.

 

Incidentally, U.S.-Chinese ties offer a good example of positive economic interdependence. This has a strong stabilizing effect on the entire complex of their ties, providing incentive to resolve all issues on the basis of mutual respect, taking each other´s interests into account.

Cooperation between the diplomatic and business communities is beneficial for both sides. The strengthening of Russia´s international positions helps domes tic business circles develop foreign markets, while progress along these lines enables us to make a more effective use of our foreign policy potential.

We are aware that Russian business sometimes runs into difficulties in enter ing foreign markets. The emergence, from time to time, of more or less acute problems and the existence of some unresolved issues is an objective process, especially in the economic sphere. They can only be solved through consistent efforts and only if they are approached in a balanced, calm, and realistic way. The more areas for economic contacts and cooperation there are, the stronger the competition will be. The political goal - as we at the Foreign Ministry see it - is to put this competition into bounds that are understandable to both sides and pre clude, as in competitive wrestling, the practice of "barred holds."

Although only Russian companies themselves can play a key role in uphold ing their interests, we regard the provision of non-discriminatory conditions for their work, as well as the creation of a favorable regulatory environment for eco nomic activity, as one of the most important goals for the Russian Foreign Ministry. Maintenance of constant and effective contacts with business circles is one of the key prerequisites for successful economic diplomacy. This is a focus of activity by the Business Council under the auspices of the RF Foreign Minister, which in recent years has signed agreements with a number of large Russian companies and leading non-governmental organizations in the econom ic sphere.

 

Q: Let us consider this in regard to Russia s relations with the CIS. Russian businessmen seek to develop ties with their partners in the Commonwealth of Independent States, remembering that we are "doomed" to friendship and coop eration. However, political disagreements with some of our neighbors also have a negative impact on business. Perhaps it would be a good idea to more active ly tap economic diplomacy? This refers to cross-border ties, direct links between enterprises, co-production schemes, etc. Russian business communities abroad could play a special role here.

A: I cannot but agree that economic contacts, ties with the business commu nity play a key role in laying the groundwork for interstate relations, which makes them more stable and less exposed to short-term political impacts.

This fully applies to the CIS area. Especially since the Commonwealth territory is a market with huge possibilities, where very good results can be achieved with effective business organization, taking into account the national specifics of each state concerned.

 

The development of economic cooperation in the framework of the CIS has always been given the priority that it deserves. Russian state institutions provide essential backing to our businessmen on a regular basis. Economic cooperation is declared a priority in the Concept for the Development of the CIS, adopted in 2007.

We expect that further intensification of efforts in this area will be facilitat ed by the CIS Economic Development Strategy through 2020 and the Plan of Action for the Implementation of Stage 1 of the Strategy (2009-11). These are wide-ranging, comprehensive documents providing for concrete activities that will help significantly intensify economic cooperation and make these efforts even more focused. We believe that the achievement of these goals will further facilitate the work of Russian businessmen in the CIS member states.

As for interregional and cross-border contacts in the CIS area, these are indeed one of the most effective and promising forms of cooperation. One-third of Russian Federation constituent members - 28 regions - border on the CIS´s four largest member states: Belarus, Ukraine, Kazakhstan, and Azerbaijan. Direct links between the regions help strengthen mutually beneficial trade and economic relations, expand cultural exchanges, and contribute to improving the living standards in our countries.

 

With a view to ensuring a better use of their potential in a multilateral for mat, a decision was made recently to create a council on interregional and cross-border cooperation between the CIS member states, and a convention on cross-border cooperation was signed. A significant legal groundwork has been laid in a bilateral format. I believe that in this respect, we have a good basis for build ing effective and mutually beneficial economic ties. Incidentally, the CIS Executive Committee has drawn up and maintains a register of international doc uments pertaining to interregional and cross-border cooperation between the CIS member states. It is available to anyone interested to access it.

Our efforts are aimed at encouraging the Russian regions to become closely involved in integration processes in the CIS area. We also see considerable potential in the implementation of regional projects in the fuel and energy sector, the agro-industrial complex, the mining industry, and machine manufacturing. I believe that our regions´ capabilities could also be used for developing contacts in the sphere of high technology, agriculture, and transport infrastructure.

 

To sum up, we fully back the efforts of Russian business to expand our pres ence in the CIS market. Needless to say, it is up to business people themselves to choose specific forms and methods - in particular, you have mentioned direct links between enterprises and co-production schemes. In any event, this is a process that presupposes mutual interest and reciprocity.

Q: The foreign policy agency has developed effective forms of cooperation with the Russian republics, territories and provinces. In particular, the Council of Heads of Russian Federation Constituent Members under the auspices of the Russian Foreign Ministry has been highly instrumental in this respect. This refers to diplomatic backing for the regions foreign economic activity. This work was very important at a time when our economy, including our regional econo my, was entering foreign markets. However, times are changing. What, in your opinion, should the Council´s new goals be? Is it not time for regional business representatives to become involved in its activity?

A: Yes, times are changing. Nevertheless, diplomatic support for the regions´ foreign economic activity is not only still very much in demand, but needs to be further expanded and improved, in particular in so far as concerns making a more effective use of instruments at the Russian Foreign Ministry´s disposal.

As a matter of fact, this is exactly what was discussed at the Council´s latest meeting in May - i.e., working in line with the priorities set out in the Russian Federation government´s program of anti-crisis measures in 2009. The recom­mendations that were made at the meeting include the continuation of the work to provide diplomatic support to Russian manufacturers, exporters and investors, and rendering them assistance in entering new and developing traditional mar­kets.

 

As for regional business representatives´ involvement in the Council´s activ ities, in accordance with its statute, its membership is open to heads of regional administrations. However, this does not rule out the possibility of representatives of the business community being invited to join some of its activities. The most important thing is to draw up an agenda for a mutually beneficial discussion among the parties concerned, and prepare it so as to create added value - both for Russia and for our partners.

We are receptive to all constructive proposals. Incidentally, another type of our diplomatic support mechanism - the Consultative Council of Russian Federation Component Members on International and Foreign Economic Ties under the ministry´s auspices - can be used as a platform to this end.

Q: In 2003, an agreement was signed between the Russian Foreign Ministry and the RF Chamber of Commerce and Industry. It contains a number of sensi ble provisions that can help both diplomats and businessmen. However, five years have passed, and the question arises: Is it not time to review the docu ment´s implementation and outline measures to improve these joint efforts and gear them more toward addressing current issues?

A: The agreement on cooperation and the synchronization of efforts between the Foreign Ministry and the Chamber of Commerce and Industry, which was signed in 2003, has laid the groundwork for joint systemic and focused efforts by government agencies and the business sector in the foreign policy sphere. Incidentally, today, the Foreign Ministry has similar agreements with eight respectable Russian business associations, including the Russian Union of Industrialists and Entrepreneurs, Delovaya Rossiya, OPORA Rossii, the Association of Russian Banks, and the Union of Russian Machine Manufacturers.

It is a framework agreement of unlimited duration. It does not set concrete goals or specify the forms and methods of our cooperation, making it possible to continuously upgrade and adapt them to the changing reality. Therefore, we should be talking not so much about reviewing the document´s implementation as about the level of cooperation between our structures that has been achieved by now.

The title of one of your publications - Partner - aptly describes the nature of ties between the RF Foreign Ministry and the RF Chamber of Commerce and Industry. We are indeed Partners with the capital "P," since we have years of experience in effective and mutually beneficial cooperation built on principles of transparency, good faith, and mutual assistance. This partnership - without a doubt, very successful - is based on mutual interest in providing favorable con ditions for the development of Russia´s trade and economic ties with other coun tries, attracting foreign investment to the national economy, expanding the export of Russian goods and services, providing assistance to Russian business in devel oping foreign markets, and protecting the economic interests of Russian business abroad. All of these goals acquire a special importance amid the ongoing global financial and economic crisis, but neither the government nor business can achieve them by acting on their own.

Over the past several years, the Foreign Ministry and the Chamber of Commerce and Industry have made a substantial contribution to advancing the development of Russian business both at home and abroad. We are ready to con tinue stepping up our efforts in the interest of ensuring Russia´s prosperity, its stable innovative development, and improving the living standards of all Russian citizens.

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