Economic diplomacy should be embraced regardless of political problems, the head of Russia’s investment fund told CNBC on Saturday, discussing the current economic sanctions on the country by the U.S. and European Union.
Speaking from the Munich Security Conference in Germany, Kirill Dmitriev, the chief executive of the Russian Direct Investment Fund (RDIF), lamented the current political impasse between Russia and the U.S. and called on the latter to “separate business from politics.”
“I think we’ve got to think about the way to move things forward. For example, the European Union was founded on the principle that economic ties prevent wars and conflict,” Dmitriev said. “And I think U.S.-Russia economic ties have to improve, and that dialogue is very important. Because we cannot get stuck without a solution, we need a solution.”
The comments come amid the highest tensions the two countries have seen since the Cold War. On Thursday, the White House directly blamed Russia’s military for the July 2017 cyber attack known as NotPetya, which hit more than 64 countries and cost companies billions of dollars. And on Friday, the Department of Justice indicted 13 Russian nationals and three Russian entities for alleged interference in the 2016 presidential election. A separate investigation is examining whether the Trump campaign colluded with Russians, which Trump denies.
RDIF is the $10 billion sovereign wealth fund created by Russia’s government to co-invest in the Russian economy alongside other countries. Dmitriev was made chief of the fund in 2011 to improve foreign investment flows and investor confidence in the country, particularly among Westerners.
Asked whether the Russian military’s alleged cyber attacks made his job any harder, Dmitriev replied, “Business has to be separate from politics. And politics has all sorts of measures to address political issues.”
The U.S. currently imposes economic sanctions on Russia for its 2014 invasion of Ukraine’s Crimean peninsula as well as the allegations of election meddling and alleged human rights abuses. In late January, however, the White House bypassed a Congressional deadline to hand down further sanctions on the country, fuelling criticism of President Donald Trump as being unusually soft on the Kremlin. Trump denies any accusations of illicit ties with Russia.
“I think there has to be very careful thinking based on what effects would different actions cost, and so far sanctions really have not produced any positive effect for the U.S.,” Dmitriev argued, adding that he felt Europe was more intent on carrying out joint projects with his country and easing sanctions.
He cited Nord Stream 2 — an $11 billion project that would ship Russian gas across the Baltic — as an example. German Chancellor Angela Merkel has expressed support for the project and Germany’s foreign minister has suggested easing Russian sanctions, but Poland has called for U.S. sanctions on the pipeline.
“What is a solution? A solution is economic engagement,” Dmitriev went on. “Engagement and focus on mutual projects is definitely helpful for political diplomacy. And if Russia and the U.S. can work together, we can address better the North Korea issue, Middle East issue and many issues, including terrorism, in a much more efficient way.”
“I think we just need to be realistic about what the different actions cost, and I think politics has lots of measures to punish politically, but business has to continue and economic diplomacy is a way to improve politics,” he added.
