IBEC Business Forum: New Outlook on Eurasian Partnership and Financial Technology

Moscow hosted the international business forum “Europe – CIS. 4D”. Organized by the International Bank for Economic Co-operation with the support of the Banking Association for Central and Eastern Europe, the CIS Financial and Banking Council, and TransKapitalBank, the Forum brought together more than 200 participants from both Russia and European countries, as well as representatives from Vietnam and Mongolia as IBEC member states, that are actively developing economic cooperation with European partners.

New mechanisms for expanding and deepening foreign trade operations of European countries with the CIS markets was the key item of the agenda. As was mentioned by Yuri Zubarev, Deputy Minister of Finance of the Russian Federation, it is important for the regulators to create incentives to use new cooperation mechanisms, not to try to impose inefficient decisions on the market, even if they correspond to political trends.

The IBEC has historically developed as an important infrastructure component of the Eurasian cooperation mechanism. Ruslan Grinberg, Director of the Institute of Economics of the Russian Academy of Sciences, who led the plenary session, ironically mentioned that the Bank was founded back in the 1960s as a settlement bank for the CMEA countries and did not manage to fully become a driver of economic integration in the planned economy conditions. Today, in the new geopolitical environment, the status of the Bank uniting countries with various features of socio-economic development, opens up new opportunities for international cooperation and increases intensity of foreign economic cooperation. It was these prospects that predetermined the activity of the forum participants, including representatives of business, governments and central banks, commercial banks, export-import agencies, banking associations and unions of Eurasian region.

Denis Ivanov, Chairman of the IBEC Board, highlighted in his report the current status of the foreign economic cooperation between the IBEC member countries and other countries of the region, and the role of multilateral development institutions at the present stage. According to Mr. Ivanov, the unique status of the IBEC as a settlement bank provides an opportunity to effectively meet the requirements of commercial companies and financial institutions, whose current market demand is risk sharing optimization, both at investment and at settlement level. The priority focus of the updated strategy that is currently being implemented is to create and market products and settlement tools to support European exports to the CIS countries.

Digital platforms are increasingly becoming a technological basis for such solutions. “Digitization: Smart Solutions for Trade Finance and Settlements” session was one of the most fruitful and interesting discussions of the Forum. IBEC is actively working on a blockchain platform for trade financing. The use of the distributed register technology in interbank settlements will help significantly optimize them, enabling transparency and efficiency with 100% reliability and low costs. István Lengyel, Head of the Banking Association for Central and Eastern Europe, believes that blockchain-based settlements may become an effective tool for dedollarization of foreign trade in the Eurasian space.

The issues of economic partnership with the CIS countries are also important for the EU countries, as was noted during the panel discussion by Katarína Kováčová, General State Counsellor of the Ministry of Finance of the Slovak Republic. She believes that development institutions, including IBEC, will facilitate the development of new mechanisms of cooperation between countries. Key aspects include the enhancement of transport and logistics capabilities and the involvement of SMEs in international relations. It is telling that a set of policy papers, particularly, the concept “Connecting Europe and Asia — Building Blocks for an EU Strategy” adopted in September 2018, is aimed at developing effective economic relations between Europe and Asia, establishing partnerships based on generally accepted rules and standards, and eliminating investment and other restrictions.

The Forum was not limited to expert discussions. A number of bilateral and multilateral agreements were signed. They include an agreement between IBEC and the Polish research and implementation company Frako-Term. The document signed by IBEC Chairman Denis Ivanov and the head of the Polish company Waldemar Kozłowski provides for the issue of a Bank guarantee to execute the contract for the supply of equipment for the Joint Institute for Nuclear Research in Dubna. It is telling that the research institute also has interstate status as IBEC. So, the agreement is truly of a multilateral and integrative nature.