Economy
4:05 am
Thu May 22, 2014

Russian Economic Forum Boycotted Over Ukraine Crisis

Originally published on Thu May 22, 2014 8:18 am

Transcript

RENEE MONTAGNE, HOST:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep. Each spring Russian president Vladimir Putin welcomes international business and political leaders to an economic forum in St. Petersburg. It started today and Putin told those who arrived that Russia is ready to do business, although it expects to be treated as an equal.

Not as many people were listening as Putin might have liked. Some of those invited did not show up. They stayed away to protest Russia's actions in Ukraine. NPR's Jackie Northam reports on Putin's awkward stance on the world stage.

JACKIE NORTHAM, BYLINE: For nearly two decades, the St. Petersburg International Economic Forum has been a glittering event, pulling in business and political leaders from across the globe. It's Russia's answer to the other major economic event in Davos, Switzerland, and a chance to showcase all Russia has to offer, says Anders Aslund, with the Peterson Institute for International Economics.

ANDERS ASLUND: It's a wonderful, big event with big receptions, with thousands people at the old Czar palaces in the center of St Petersburg. And President Putin loves being there and he loves being among big American CEOs in particular.

NORTHAM: In the past, that would have included the chief executives of major companies such as Pepsi, Goldman Sachs and Alcoa, the aluminum giant. But this year, Putin is going to be mighty lonely. The Obama administration has encouraged companies doing business with Russia not to attend the St. Petersburg forum.

Ryan Lance, the head of ConocoPhillips, told shareholders he was already having second thoughts because of Russia's annexation of Crimea, but made up his mind after hearing the U.S. State Department's concerns. Boeing spokesman John Dern told NPR that the aircraft manufacturer decided not to send its senior executive at the request of the U.S. government.

Instead, it will send the company's representative in Moscow. Jamison Firestone, a partner with FD Advisory in London, says as the absence of so many senior executives sends a strong signal.

JAMISON FIRESTONE: It sends a signal that Russia's becoming a pariah nation where foreign countries don't want to invest because their investments aren't safe in a lawless country.

NORTHAM: Only four U.S. companies, including Caterpillar, sent their top executives to St. Petersburg. Although there are some European companies avoiding the event, many energy firms are sending their senior managers. Firestone, an American lawyer who helps companies do business in Russia, says Putin is the type that will keep a close eye on who is - and is not - attending the economic forum. He says that could put some companies with large projects in Russia in a difficult position.

FIRESTONE: You know, there may be some blowback, but it's difficult for me to believe that at a time when Russia really needs every dollar it can get that they're going to really retaliate against large American companies because somebody didn't show up at the economic forum.

NORTHAM: The Peterson Institute's Aslund says Russia is seeing a massive flight of capital. He says as much money, about $65 billion, left the country in the first three months of this year as it did during all of last year. And he says uncertainty is causing foreign investment to dry up.

ASLUND: There is a sense now in the business community that we don't know what President Putin will come up with next, nor do we know how the United States and the European Union will respond to it, so it's better not to do too much.

NORTHAM: This could all be material for discussion during the three-day St. Petersburg's forum, which the official website says is dedicated to sustaining confidence in a world undergoing transformation. Jackie Northam, NPR News, Washington. Transcript provided by NPR, Copyright NPR.