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The Russian prime minister discussed the investment climate in Russia with foreign investors

October 16, 2012, 13:17 UTC+3
He proposed three trends of activities to potential investors: infrastructure projects, the privatization of major Russian companies and the development of the consumer market
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Russian Prime Minister Dmitry Medvedev held a meeting of the Advisory Council on Foreign Investments on Monday. Western investors are concerned over corruption and bureaucracy in Russia. Medvedev intends to change this current Russian image through the sale of state property. He proposed three trends of activities to potential investors: infrastructure projects, the privatization of major Russian companies and the development of the consumer market.

The Nezavisimaya Gazeta daily recalled that Vladimir Putin was in charge of the dialogue with Western business as the chairman of the Advisory Council on Foreign Investments. Since May 2012 Dmitry Medvedev, who headed the Russian government, assumed the post after Putin. An opening speech of Dmitry Medvedev at a meeting of the Advisory Council on Foreign Investments was full of regret over no radical improvement in the investment climate in Russia. The main indicator - the volume of direct foreign investments – grew, but quite moderately. The prime minister stated contradictory statistical reports. In 2007, according to him, less than ten percent of foreign businesspeople considered the business situation in Russia favourable. In the previous year only a third of them had the foresaid opinion. But Medvedev acknowledged that there are no reasons to be satisfied with the positive dynamics, as Russia remains unattractive for investments for two thirds of foreigners.

The time passed, when it was considered that the investments in Russian economy were probable only in the oil and gas sector, Medvedev stated. He proposed three trends of activities to the partners in the Advisory Council on Foreign Investments: infrastructure projects, the privatization of major Russian companies and the development of the consumer market.

The newspaper recalled that the council was formed in 1994. Its main tasks are the promotion to the attraction of foreign investments in Russian economy and the improvement of the investment climate for foreign investors. The Russian premier chairs the council, the minister of economic development is the deputy chairman of the council and the head of the executive committee.

Now Russia has a not quite good investment climate that is showed by a high level of capital outflow. However, due to the coming of the Olympics-2014 Russia has a chance to become a potentially interesting region for investments from foreign companies, the newspaper cited FX-Invest chief financial analyst Yuri Prokudin as saying. “The investments can be made in the construction industry, tourism and finances. So, the foreign investors will be able to launch negotiations with Russian representatives already at the end of 2012 and the beginning of 2013 to avoid the loss of time. Therefore, the growth of direct investments can be forecast next year with a high degree of confidence,” the analyst stated.

If someone expected from the top management of Siemens, Alcoa, Procter & Gamble, Ernst & Young, Nestle and the European Bank of Reconstruction and Development a harsh criticism towards to the government, the successes of which in the attraction of investments two thirds of major world companies do not see, he had to be disappointed, the Kommersant daily reported. Even CEO of the tobacco holding BAT Richard Burrows, who has a big problem in Russia that is the debates in the government over an initiative of the Ministry of Health and Social Development to raise the excise duties on the tobacco products to the level of average European prices already starting from 2013, did not say a word that he is dissatisfied with unpredictable fluctuations of the Russian taxation policy towards the tobacco industry. The heads of the major companies doubtlessly had some claims to the working practice in Russia, but purely technical and soluble.

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