Enhancing the Competitiveness of Russia’s Investment Environment
TV Debates entitled ‘Enhancing the Competitiveness of Russia’s Investment Environment’ were held on June 17, 2016 in the framework of the 20th St.-Petersburg International Economic Forum. Representatives of Russia, Bahrein, UAE, China, Japan, South Korea, Italy and France took part in the discussion.
The debates were devoted to the foreign companies’ perception of Russian assets and investments into Russian economy in the current macro-economic situation. The Russian market opportunities that are attractive for industrial investors and the state incentives were also discussed. The debates were moderated by Evelina Zakamskaya, Anchor of Russia 24 TV Channel.
Kirill Dmitriev, Chief Executive Officer of the Russian Direct Investment Fund (RDIF) reported the results of work at the SPIEF. Inter alia, he announced that in the past two days of the Forum his Fund had agreed six deals with foreign companies.
“We have just signed the first deal in the framework of the Russo-French Fund. We are investing in CDC International Capital – a French company that is going to build industrial plants in Kaliningrad”, – Mr. Dmitriev said. The RDIF Head also noted that it is critical for Russia to attract ‘smart money’, which comes to the country coupled with expertise.
Representatives of foreign funds and companies that invest in Russia also participated in the Debates. Tadasi Maeda, Senior Managing Director of the Japan Bank for International Cooperation reported a shift in his Bank priorities. So far the Bank’s investments have been focused on the oil and gas industry. However, according to Mr. Maeda, Japan lays emphasis on improving the quality of life of the Russian people by way of transferring technology.
“Russia and Italy have great business opportunities”, – Chief Executive Officer of Fondo Strategico Italiano Mauricio Tamagnini commented. “In the last couple of years the Russian government has set up tax free zones, which makes it possible for us to introduce Italian technology here. Let me give you an example: we invested in a company that produces and packages meat products in Orenburg Region. The result was a very profitable and productive company. Besides, we created 4 thousand jobs. This was not only a pleasure for us, but also an economic value”, – representative of the Italian fund said.
Deputy Chief Executive Officer of Mubadala Development Company Group Waleed Al Mokarrab Al Muhairi holds a similar opinion: “We run 17 investment projects with Russia and this says a lot. Firstly, we believe that the investment climate and opportunities are good for earning money. Secondly, at this Forum we met both Mr. Dmitriev and the President Putin, and got an understanding of the current developments in the Russian economy. We see opportunities, see a commercial component and expect investment to grow in the next 20–25 years”.
Nevertheless, doing business in Russia is associated with difficulties, too. This was evidenced by the Chairman of CDC International Capital Laurent Vigier. Finding sound Russian partners causes greatest problems to foreign investors. However, the situation has improved in the recent years – RDIF has become a reliable partner to CDC International Capital.
Another drawback was mentioned by Mahmood H. Alkooheji, Chief Executive Officer of Bahrain Mumtalakat Holding Company. “Russia, as many other countries, takes up many unviable projects; money is just thrown away. Meanwhile, we want to make money, and that is why we improve corporate governance of the companies we invest in. They have to be transparent and optimize their decision-making process. Thus, our Holding is pushing forward advanced practices. Hopefully the business will follow them”, – Mr. Alkooheji said.
The results of RDIF activity were summarized by its Head, Kirill Dmitriev. “Opportunities are converted into investments”, – he said. In 2015, the Funds endorsed transactions worth the total of RUR 540 billion. This is three times as much as in the previous year. Over the entire period of the Investment Fund operation, the amount of direct investments has reached RUR 850 billion. At that, per each Russian ruble RDIF attracts ten from foreign partners.
