Maxim Oreshkin: I urge German business to be more active in involving Russian small and medium enterprises in their production chains
Russian Minister of Economic Development Maxim Oreshkin held a meeting with Bavarian Prime Minister Horst Seehofer on March 17, 2017.
Maxim Oreshkin: Mr. Seehofer and I managed to discuss the current state of trade and economic relations between Russia and Bavaria and the prospects for their development. Bavaria is an economic power of Germany, and it’s no surprise that it has become Russia’s main partner among the 16 federal states and number one in terms of trade turnover.
Trade between Russia and Bavaria is top overall in trade between Russia and Germany as a whole. It’s significant that the volume of economic cooperation between Russia and Bavaria is comparable with such European countries as Austria and Sweden.
Russian consumers are highly familiar with the products of the German companies that have manufacturing facilities in Russia – Knauf, Siemens and Metro.
It’s always important for entrepreneurs, particularly those who do business in Russia, to understand what is happening in the Russian economy and what changes are taking place in economic policy.
We clearly understand that achieving economic growth is impossible without a steady flow of high-quality foreign investment. That’s why it’s essential to create comfortable conditions for the companies that come to our market.
We have several institutions that allow us to respond in a timely manner and coordinate issues that arise for foreign business. First, this includes the Foreign Investment Advisory Council, which has been operating since 1994 and unites 54 companies. Their total investment in the Russian economy has already exceeded USD 160 billion, and there are a number of Bavarian companies on this Council such as BASF, Bayer (Bavaria), Deutsche Bank, Henkel, Metro, Siemens (Bavaria), and Uniper.
One of the topics we discussed today was mutual relations not only among big business, but in the segment of small and medium enterprises. The tight integration of big business along with small and medium enterprises makes it possible to pull cooperation out of a rut to a new qualitative level in terms of business, economics, and investment projects, and also achieve better results.
The SME Corporation, which works to stimulate and create a proper institutional environment for the development of such enterprises, is carrying out projects along with the German Chamber of Commerce to find suppliers for a number of German companies. Starting in 2015, the threshold for small and medium enterprises to participate in the charter capital of foreign legal entities has been increased from 25% to 49% for the companies that are able to take part in these programmes. In this regard, we make no distinction about who is behind the company – Russian investors or investors from Bavaria.
Overall, I urge German business to be more active in involving Russian small and medium enterprises in their production chains.
Horst Seehofer: We have previously expressed hope that we can continue to build on these very good two days. Therefore, I propose a detailed exchange of opinions with representatives of the Bavarian economy. During our conversation yesterday with President Vladimir Putin, you said that you have a great plan and we will be much obliged if you share some of the main aspects of this plan with us. I would like to thank you for the meeting and for the two days of dialogue. This all took place in the spirit of mutual respect and trust. And I personally hope that this platform will help us to enter into a new era of relations between Russia and Bavaria as well as Bavaria and the City of Moscow. I thank you once again for such beneficial conversations and meetings over these two days. My suggestion is to exchange opinions and inform the delegation participants of your plans.
Following the meeting, a declaration was signed on the establishment of the Russian–Bavarian Working Group for the Promotion of Economic Cooperation at the level of the Ministry of Economic Development of the Russian Federation and the Ministry of Economic Affairs, Media, Energy and Technology of Bavaria, which will carry out work in this area on a systematic basis. The document was signed by Deputy Minister of Economic Development Alexei Gruzdev on Russia’s behalf and by Minister of Economic Affairs, Media, Energy and Technology Ilse Aigner on behalf of Bavaria.
The Working Group’s objectives include establishing contacts on economic affairs and opportunities to develop the markets of the two countries as well as coordinating potential cooperation projects and other endeavours. It will also take into account the interests of small and medium enterprises.
The Working Group will consist of Russian and Bavarian sides. Representatives of the business circles of both countries will have the opportunity to take part in its meetings, which will alternate between Russia and Bavaria at least once a year.
Statement following the signing of documents
Maxim Oreshkin: We discussed the situation in the Russian economy and development prospects with the Prime Minister and representatives of German business. I told German companies about the plan to develop the Russian economy, structural changes in the coming years as well as what the economic policy will be built on and what it will lead to.
It’s important to note that despite a few minor political hiccups that remain between Russia and Germany, German business along with Bavarian business in Russia continues to actively work on our market and actively invest. This is very important.
One of the key achievements is the establishment of the Working Group for the Promotion of Economic Cooperation at the level of the Ministry of Economic Development of the Russian Federation and the Ministry of Economic Affairs of Bavaria. We have agreed that the work will be applied nominally and focus on economic cooperation projects, while not only helping big companies, but small and medium business as well.
When we met with businesses, one company – I won’t say which one for now – asked to become the first project supported via this working group with foreign investment being made in Russia.
Russian Minister of Economic Development Maxim Oreshkin also extended an invitation to Bavarian Prime Minister Horst Seehofer to take part in the St. Petersburg International Economic Forum (June 1–3, 2017).
This was followed by a statement from the Prime Minister.
Horst Seehofer: We have wrapped up our two-day trip to Moscow. We just had an informative point of culmination to this trip. Mr. Minister, who attended our conversation yesterday with Russian President Vladimir Putin, already stated yesterday that he has a great plan and he promised to share the contents of it with us today.
As a representative and citizen of the Federal Republic of Bavaria, I think I would venture to note at this point that a new era of our joint relations is beginning.
We were able to ascertain that this programme is very wide-ranging. We hope that you receive the impact from this programme that you are anticipating, Mr. Minister. Representatives of Bavarian businesses were very grateful for this information because they understand that now they have greater confidence in how to plan their work.
I am grateful that this agreement was signed now on the establishment of the Russian–Bavarian Working Group. I wish the Working Group great success and much good luck.
But the most important thing is that all the players in economic affairs grasp this information and utilize it for their needs and work. We also spoke about how for one of the agreements that was signed today we already have an interested company whose work could become one of the first projects of this Working Group.
I invited the minister to Bavaria and hope that our next meeting will take place there in Bavaria. Thank you for the nice meeting, information and warm reception, and for the good Russian-Bavarian friendship. And in response I am very pleased to accept your invitation to St. Petersburg, Mr. Minister. And if my time constraints even partially allow for it, I will definitely be there.