Dr.Kostin was introduced by Rector Oleg Kharkhordin, to an audience of students – mostly from the international programs – and professors eager to hear what the head of one of Russia's leading state banks had to say during this time of tense relations between Russia and Europe.
Kostin's presentation began with a purview of the shared history of the two regions, highlighting their religious and cultural ties. The cultural exchange has not been just one way, though. Kostin pointed to major Russian cultural figures and specifically to the impression that the "War and Peace" section of the opening ceremony in the Sochi Olympics made on Western audiences.
Russia's roughly 70 years of communism, in Kostin's opinion, was a setback to Russia's relationship with Europe. During this confrontational period, however, economic ties thrived; Kostin used the historic pipe for gas deal to illustrate his point. Kostin saw the end of communism as an opportunity for Russia to greatly improve its ties to Europe. How effectively did Russia capitalize on this opportunity?
Kostin's response to his own question was mixed. He explained that Russia's initial goals were overly optimistic and that there was much that hindered their realization. Kostin pointed to the inherent difficulty in transitioning from 70 years of communism, the emergence of a multi-polar geopolitical landscape, and the breakdown of trust between Russia and western nations – the US in particular. The expansion of the EU, NATO, and constant criticism of Russia from the West regarding human rights has further strained relations.
After reviewing Russia's official position on Ukraine, Kostin moved to the US-led sanctions targeting Russian officials, which Kostin viewed as counterproductive. He thought that though the sanctions hurt, they did not represent a point of no return. More sweeping economic sanctions, such as those levied on Iran, would be disastrous, and not only for Russia, but the EU especially. Kostin found the "silver lining" for the Russian economy in the increased confrontation with the West: Russia could be propelled to diversify both its domestic economy – he noted the need for more high tech industry – and its customer base, with countries such as China, Japan, and South Korea representing increasingly attractive trade partners. He said that Russia needs "reindustrialization", and noted the increasing trend of manufacturing "coming back home".
Kostin began finishing up his speech with an optimistic tone, pointing to Russia's newfound self-confidence. Russia's ascension to the WTO in 2012 was a big success and the country has begun to take on a more global posture. "The EU is no longer the great pole, as it was twenty years ago. We should look at a more global picture." Kostin found that there was also a lot of untapped potential in Siberia, where economic development has become a national priority.
Kostin was also optimistic about the prospects of the Eurasian Economic Union set to launch in 2015. The unification of the EU and the Eurasian Economic Union into one free-trade zone was even raised as a possibility in the future. He said that relations between Europe and Russia could be improved by a higher degree of mutual respect.
The floor was then opened up to the audience for questions. The first question related to the position of the Russian state toward the administration currently in Kiev. Kostin answered that Moscow would recognize a fairly elected administration in Kiev. "If properly organized, these elections [in May] will create a legitimate regime." He emphasized the need for the future regime to represent the interests of the majority of the Ukrainian population.
The second question raised doubt about the effectiveness of a Customs Union that did not include Ukraine. Kostin conceded that the Customs Union would be more successful with Ukraine in it, but highlighted the untapped potential in Siberia and South East Asia. Kostin regretted that a formula allowing Ukraine to cooperate in the economic sphere with one – either the EU or Russia – without hurting the other did not exist.
The third question focused on the effect of Russia's policy on Ukraine on intellectual life. Kostin approached answering from a more economic point of view, while admitting that sometimes Russia's policy, specifically the manipulation of gas prices, could be better. He thought Russia should do more to "unfreeze the situation", noting that Western sanctions on Russian banks would be disastrous. He said such sanctions would be more damaging to Russia than vice versa. He brought up the example of Iran, where sanctions had completely isolated the country from any financial transaction. He said Russia should move to restore its relationship with the West.
The fourth question was about the relative standards of living in Russia, as compared to Ukraine, and how it related to Crimea. Kostin said he loves the Crimea, and has been going there during the summer for 15 years and also owns a house there. He's never had a problem with it being Ukrainian. He said the region is very close to the Russian heart with its literature, culture, and history, and then delved into the economic implications of the current situation. "It's a fact of life that Russian society is about twice as wealthy as Ukrainian. Many people there will benefit. But some will lose." On a broader note, Kostin said that the EU "will never manage to succeed in Ukraine unless there is the support of Russia. Ukraine has a lot of problems but may have more problems if Russia turns its back on Ukraine. Ukraine will really struggle despite Western loans."
The fifth and final question regarded whether or not Russia would implement a national banking system in the case of further sanctions. Kostin said that it should not be "tit for tat" and that Russia could reasonably implement such a system – if banks such his or Sperbank were sanctioned – within two months so Russians would be able to make payments. He said Russia could create its own card system in addition to Visa, but he was skeptical of its international acceptance and brought up the case of the Chinese card, which can only be used in some very high end stores. Kostin warned that Russia should not get rid of Visa or Mastercard.
After this answer, Kharkhordin interjected that Kostin had a flight to catch and with that, the audience applauded and the presentation was over.
Nicholas Watt
