With business and economic leaders gathering for the St Petersburg International Economic Forum Business RT spoke with Dr. Frank Schauff, CEO of AEBRUS about President Medvedev’s keynote address and Russia’s investment climate.
President Medvedev’s keynote speech at the St Petersburg International Economic Forum outlined his vision of Russian economic development, and discussed recent successes such as the successful IPOs of Yandex and Mail.ru. Other topics include the development of a $10 billion state private equity fund a $30 billion asset sale. According to Medvedev, Russia’s Government will come up with particular figures and the list of the Companies involved in the near future.“The government doesn't need such a large amount of property. The government has submitted its ideas for the schedule for privatization of major companies. The implementation of these plans is necessary but these plans are very modest. The government has until the first of August to adjust the scale of privatization in order to resolve this. I am sure we will be able to go through with the privatization in a modern, transparent way, in order to attract effective private investors and generate sufficient funds for the Russian budget.”He noted that the Government in Russia should rather foster private business than act as an owner of the economy, with participation in international economic organizations a key part of that. “Businessmen have a saying: markets are just like parachutes – they only work when they're open. And the case for Russia is that we will fall hard if our economy is not open. That’s why we will lower barriers for foreign investment and are looking forward to finalizing our membership of the WTO and OECD.”RT: You've been the head of the Association of European Business in Russia for several years now. How has the business environment changed here?FS:“Well lets comment on the last two years.We have seen a severe crisis here in Russia, with negative growth of about 8% in 2009.We have seen 4% plus growth last year, we are looking for about 4-5% this year.It certainly is much of an improvement, the present compared to the last two years.”RT: Are we seeing more companies enter the Russian market?FS:“We saw more foreign direct investment coming into Russia last year, more than in the previous one, and we expect that also this year the growth of foreign direct investment will continue.It will perhaps not be such a big boom as until the crisis of 2008, but anyway things are improving now.”RT:The government's privatization plans will boost competition in Russia. How will this affect foreign companies in Russia?FS:“Well it will also certainly have effects on foreign companies.First, because there might be sharing a part of the privatisation, second they might also help in the modernizing these companies to be privatized, and thirdly increased competition, but also, lets say, it will be interesting for these companies who are used to competition in the countries they are coming from.In Europe there is certainly more competition in certain markets than there is here in Russia.”RT: What are the main challenges for international companies in the Russian market?FS:“Well, I mean, let’s put it clearly, there is certainly lots of complaints about bureaucracy, but the President today is saying that he tries to reduce bureaucratic procedures.There is complaints about corruption also, but the President has again also stated that he is going to fight corruption with his political instruments, and certainly foreign investors would welcome, if there would be movement in that direction.”