The 5th International Innovation Forum rAsia.com

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The rAsia event is one of Moscow’s celebrated summer gatherings, which takes pride in being completely different in format and content form any other event. It is the only publically accessible high-level conference on ASEAN countries in Moscow, and at the same time, the young people who attend and participate in the Innovation Forum, give the event a fresh, avant-garde feel, which give the serious talk at the ASEAN conferences credibility. Where else can you get two conferences happening at the same time which are so totally different in content as: ‘Going Global in the Closed Eco-Systems: If It’s Still Possible’ and ‘Why and how to seek funding in Asia? Or maybe at a deep level they are all linked? As Alexander Shulgin the founder of rAsia mentioned: “There are a lot of people here from completely different industries, ranging for commodities to sports. They are all crazy, creative people who are actually building our future. This is a conference about our future.”

I couldn’t attend all the lectures unfortunately, so I attended the ones about ASEAN as I am interested in these countries and their relationship with Russia. Next year, Russia and ASEAN will celebrate its 20th anniversary and has reached a trade turnover of $20 billion a year, as Victor Tarusin, Director General of MG3, and executive director of the Russia-ASEAN Business Council at the Chamber of Commerce and Industry of Russia pointed out. “By the end of this year, ASEAN will establish a full scale economic union, which will not be the same as the EU, but is a remarkable step in breaking down economic barriers. Russia is a closer trading partner with ASEAN, which is now called: ASEAN plus one. But it is a two way road, and we need to find business opportunities in Russia for ASEAN countries, not just seek business opportunities in ASEAN for Russian companies.”

Selection_039In his vigorous keynote Speech: Djauhari Oratmangun, Ambassador of Indonesia to Russia reiterated the importance of the ASEAN.” With a GDP of almost a trillion US$, and a combined population of 600 million people, we are doing pretty well. You only need to look at the growth of member countries, such as the Philippines to see that. All ten ASEAN leaders meet each other at least twice a year, trying to thrash out ways to solve problems. Next year there will be a summit between ASEAN and Russia, because starting from next year we will be one community; not only economically but politically as well.”

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Carlos D. Sorreta, Ambassador of the Philippines to Russia mentioned in his speech how distorted the view of the world’s mainstream media is in regard to reporting relations between the Philippines and Russia. By way of demonstration, he showed a slide of a Guardian article ‘Snapping between meals: Russia to import crocodile meat’ from October 2104, as an example of the kind of infantile journalism about ASEAN helping to fill some of the gap in food exports to Russia.

Ambassador Sorreta went on to point out that trade between The Philippines and Russia is actually very small in comparison between Russia and other ASEAN countries. He listed various possible reasons for this such as geography, history, but explained that none of these explanations have any truth in them. “The real reason is lack of interest on behalf of Filipinos about Russia, and to a certain extent visa versa. It is very important to increase people to people meetings, and tourism is a good way to do that, but we have not been able to convince our ministry of tourism to put more energy into this…. We are competing with Thailand, they had 2 million visitors last year, whereas we had 40,000! We have a lot to offer. We offer a stable corruption-free and rules-based environment, with 6.3% average GDP over the past 5 years. Moreover, the Philippines is hitting a ‘demographic sweet spot’ whereby the median age is 22 years old, and the working population is 60 % of the total population, and this will continue to 2025.”

Evgeny Belyanko, the vice President of Strategic development of Glonass Union did not mix his words: “Very few Russian companies are interested in ASEAN. A lot of documents are signed, friendships are formed, but very few actual business agreements are made. Russians are not prepared to compromise on prices enough. Russian business is not prepared to research the market properly, to really study how people live and work, to find out how to market their products properly.”

Selection_038Victor Tarusin corroborated this point: “We are saying that we are going to Asia, but we are not doing very much about it. Sometimes it is easier to talk at a business level, there are a lot of promises but not so many actions.”

In response to my question about the possible effect of the US-China-Philippine conflict over the Spritely Islands, Ambassador Sorreta said: “We think that economic growth between Philippines and Russia is more important than politics. To say that we are not going to trade with Russia, because another country is in conflict with the U.S. is too simplistic. We are not going to let these disputes about these islands wreck our relationships with Russia.” On a positive not, ambassador Sorreta also spoke about the burgeoning animation industry in ASEAN countries, as Hollywood outsources production, and ASEAN entrepreneurs spearhead the creation of whole new creative industries in Asia.

Selection_042One of the most interesting lectures after the ASEAN session ended was a talk on an ‘imminent global financial crisis, and the future of the firm’, given by Benjamin J. Butler, founder of Apotheosis Consulting in Hong Kong.

Benjamin started off by explaining that we are unable to predict collapses accurately because we rely too much on the left hand sides of our brains, and we unable to see a major financial crisis about to happen: “I see a new financial crisis happening. Stocks are very expensive, it is difficult to find yield anywhere. Fund managers have to take greater and greater risks, buying further and further out on the curve. There are many divergences as we call it in financial markets, when things are not aligned. The Swiss currency, for example, dropped 14% in one day this year; these changes have never happened before. You have to look at the world economy as a Chinese doctor looks at his patient: holistically. If you only read the mainstream media you will miss the overall picture. In the last month we saw a massive move in the German bond market. The gap between the rich and the poor keeps on getting wider, and so on.

Selection_043“Chinese love crises, because they bring opportunities, they are a natural phenomenon. We are programmed to believe that negative growth is bad. But many great companies are created in these times. So prepare for the future. I travel a lot, and see a huge new wave of new companies and funds. Wherever you go in the world entrepreneurs are materializing. People are also becoming more introspective about their lives.

“People are learning that in order to survive, the way we have to organize our companies is in a more natural organic way, without so many hierarchic structures. For example, Tony Hseih, the footwear entrepreneur has taken a very bold move in the USA in abolishing his company management. Companies work best when they are self-managed, then you get collective intelligence. As in nature, the old system has to be challenged and destroyed, but I think there is a rainbow out there, and creativity will be the long term solution.”

Kim Waddoup gave a clear and concise description of the expat community in Moscow. He dispelled the myths about the number of expats here, putting the number at about 170,000.