The current geopolitical and economic situation in the world limits the development of international cooperation, yet interest in boosting trade and economic ties remains. The Belgian-Luxembourg Chamber of Commerce in Russia is energetically promoting the broadening of business contacts between Russia and the Benelux countries. Oleg Prozorov, BLCC CEO, described its activities in an interview to Invest Foresight.
– What are the origins and what are the functions of your Chamber? Are there any obstacles to expanding its activities?
– The Belgian-Luxembourg Chamber of Commerce in Russia is a young and active organization with historic roots going back to the trade contacts between the Flemish and Russian merchants. Being part of the Hanseatic League, the Belgae traded with the Rus, building bridges between our lands. Even those days, they sat down together and discussed common trade routes and shared their experiences and knowledge with each other. There is evidence that in the late 19th and early 20th centuries, there already were business societies, prototypes of our Chamber. They gathered in St. Petersburg, Brussels and Antwerp.
The BLCC in Russia was established in 2014 at the initiative of the Belgian-Luxembourg Economic Union companies operating in Russia. Its functions are to promote the interests of its members, to help create conditions for convenient economic exchanges, and to maintain a sustainable and reliable platform for cooperation. As for obstacles, we could mention the absence of a visa-free regime between our countries and the generally unfavorable geopolitical situation in the world.
– How broad is the Belgian and Luxembourg business’s presence in Russia, and what are the most important areas of cooperation?
– Belgian and Luxembourg business is represented in almost all sectors of the Russian economy. However, in certain areas of activity, companies from Belgium are the undisputed leaders: chemistry, pharmaceuticals, logistics, and the food industry, whereas Luxembourg is one of the world’s financial centers.
– What are the most promising areas of economic cooperation development?
– We think there are good prospects for expanding exports of Russian goods to the EU countries, developing infrastructure and logistics, as well as greater cooperation in space exploration, aircraft manufacturing, and industrial construction. The blockchain, the green economy and certainly agriculture are very promising sectors. But our mutual interests are very versatile, not limited to these areas.
– What competency centers are there in Belgium and Luxembourg whose experience and skills could be useful for Russian businesses? Where should Russia send its labor force for training and internships?
– Brussels is the capital of the European Union and head offices of world corporations are located there. Universities, among them the oldest in Europe, are offering various training programs to Russian students. Luxembourg’s innovative knowledge is not limited to financial technology. It also includes the metallurgy and the IT clusters. One should keep in mind that small and medium-sized businesses play a major role in the Benelux countries. In our opinion, there is not enough cooperation in this area. We therefore see it as a direction for potential development.
– What are the typical complaints of European entrepreneurs regarding the Russian business climate?
– We regularly discuss problems and jointly look for reasonable solutions. Our members note that the conditions for business are improving in Russia, which is also evidenced by the World Bank’ Doing Business global rankings.
– How did the sanctions and political developments of the past several years influence the economic cooperation between Russia and the members of your Chamber?
– Bilateral restrictions certainly reduced the mutual trade in the first years of the crisis, but their impact was evidently less significant than the overall economic contraction. Our experts say that the new realities have given a boost to the development of those Chamber members who already had a foothold in Russia. They currently are expanding their production, building additional capacities and increasing their presence in the Russian economy. Mutual trade is being recovered.
– What, in your opinion, hinders Russia’s non-energy exports?
– Honestly speaking, the problem lies in the lack of understanding of European mentalities, habits and customers’ preferences in other countries, as well as in different standards for products, and the absence of functioning mechanisms to finance long-term projects that are necessary for a comprehensive and consistent exploring of the European market. The European market is well-established and balanced out, and it can hardly be conquered in one fell swoop.
– Do the changes in the international financial regulations affect your interaction with your Russian partners?
– In our practice we follow the existing laws and regulations. Any business activity involves some degree of risk, while doing business suggests adapting and employing the available instruments, opportunities and realities.