'Business Goes On': Construction Exec Weighs In on Russian Firms Finding Alternatives to EU Goods

As the XV Verona Eurasian Economic Forum came to a close on Friday in Azerbaijan's Baku, the event's main takeaway turned out to be that while Russians are quickly adapting to the tectonic shifts in Eurasian business relations, the EU may inevitably lose various partnerships after breaking ties with Moscow.

Hundreds of entrepreneurs from Italy, Russia, Belgium, India and other nations, as well as government officials from Russia and the host country - Azerbaijan - have attended the XV Verona Eurasian Economic Forum in Baku.

The location had been chosen largely due to Azerbaijan’s strategic position between the East and the West, which made it possible to maintain business dialogue amidst the current political turmoil. Despite the economic sanctions imposed by the EU authorities and by the United States government against Russia, many Italians and other Europeans did not cancel their attendance at the Baku event.

Andrea Romani, a construction professional who used to work for an Italian business but has since joined Russia’s Incomstroy construction company as an executive director, says that he came away from the event satisfied:

“Basically this forum is a very good opportunity to have. And to recall contacts this year. Of course, it's a little bit different format, but I found yesterday two possible new opportunities for business and also some subcontractors that could be useful in our businesses.”

Incomstroy is currently working on construction projects in Moscow and in Northern Siberia’s Altai Republic. Romani says that even though the sanctions have made it difficult to buy some materials and equipment, many items are already being produced domestically in Russia, and local companies are already finding alternative routes for importing those that have to be brought from Europe, with growing delivery costs being the key problem.

Romani has also reflected on the participation of Russia’s senior government officials and top business executives in the Verona forum, but noted that their European counterparts have ignored the event, opting for a “low level of contact and dialogue” with Moscow.

Russia’s Deputy Prime Minister Alexey Overchuk, who took part in the Verona Forum, has slammed the EU’s approach:

“Only a small part of the pipelines which connect us with Europe is functioning right now. Most of them are either under sanctions or have been blown up,” Overchuk said. “And this is 21st Century Europe we’re talking about. We are surviving this crisis much better than it was envisioned by the 'designers' of the sanctions. We expect a 2.9% fall in GDP this year. As you might recall, everyone has predicted the number to be at 18%. The inflation will be at 12.4% and unemployment is at the record low – 3.8%.”

Overchuk has also said that Russia has no shortage of cheap energy and “many talented people,” which will help the country to build its future.

Turning eastwards, finding new partners in Turkey, Azerbaijan, the Gulf States, India or China, as well as trading in national currencies and using alternative payment methods, may very well offer new, affordable, risk-free and reliable solutions to many Russian businesses hit by European and American restrictions in the energy, financial and oil sectors.

Romani says that with Russia’s apparent “eastward turn,” European businesses eyeing an eventual return to Russia may lose their share of their market to competitors from the emerging Eastern superpowers:

“So Russia has decided very clearly to go in other directions. Of course, the sanctions today impede having a successful business. But, in any case, the business goes on because I know many colleagues who still work. Of course, the logistics, and so on - everything is much more complicated than one or two years ago. But, it's still possible that mass business and mass contacts and relations will be built with India, with China and with Asian countries.”

The XV Verona Eurasian Economic Forum is a two-day business event held with the aim of discussing economic cooperation in the Eurasian space in the context of the “new global reality.”

Besides the economy, the Forum’s sessions were also dedicated to finance, the environment, energy and innovation.

This year the event, which was held for the first time since 2004, was organized by the government of Azerbaijan, Russia’s Roscongress and Italy’s “Conoscere Eurasia” association.