With business and economic leaders gathering for the St Petersburg International Economic Forum Business RT spoke with Nicholas Jordan, CEO of UBS in Russia and the CIS about the importance of the forum and the economic outlook for Russia.
RT:What are your impressions of the conference? What are you hoping to accomplish here?NJ: “Well I think it is a very impressive setup.I think it is probably the premier forum in which the business community can meet each other as well as the political elite, and discuss both things that are happening today as well as the way forward.”RT:Very good.Now since President Medvedev took office, diversifying the economy has been one of his primary goals.How far do you think progress has come on that?NJ: “I think there has been some progress.I don’t think it is enough and, personally I think that actually the government also believes that the job is not complete.They have done some good things.They have established Skolkovo, they have asked for politicians to leave the boards of various companies, they have an extensive privatization programme, they have established the fund that you were talking about to look for inwards investment.So they have done some things, but there is more to do.”RT: All right.Now Russia has seen strong capital outflows in the last ten years, despite strong oil prices and despite commodities prices being high.Why do you think the money is leaving Russia and do you think it’s a risk for the country?NJ: “Well I think that if it continues for the long term, then probably yes.Some of that is diversification, some of that is technical with various mergers and acquisitions moving things onshore and offshore, and things of that nature.But obviously some of that is money that should stay at home moving abroad.I think that is the trick. That is where the government needs to concentrate its efforts – to create a long only environment.In the pension industry reform needs to be done.In insurance companies, life side of their business is minute, mutual funds, and the other things.You know, you are not going to create the, you are not going to bring companies to list in Russia if there is no long money in Russia.They are going to go where the money is and right now that is London, Hong Kong and New York.”RT: And in terms of your money in Russia, how is that going?What are UBS’s plans and what is your general vision for the way forward here?NJ: “Well, we are very optimistic and positive.It’s a large country with a very large population, a substantial near abroad if we can call it that.We believe there is progress being made in diversifying the economy, and there is going to be opportunities in respect to that.New companies are rising all the time and they need to raise capital.That’s what we do best, we do it globally, and we believe we can do that here.”RT: And do you think that Russia’s accession to the WTO is something that is going to happen, and help the country in terms of bringing foreign business?NJ: “I think it is positive, I think it will happen, it is inevitable that it does happen.I think some of the benefits will be at the margin, but it is another step in joining the global community.International community, financial community, politically and otherwise, so it is a positive step.”RT: Very good.What do you think will actually, what actions do you think the country can take, in terms of things like this forum etcetera, to encourage more foreign business and investment?NJ: “Well I think a continued effort to address I guess the three major concerns of the international community, which are a stable legal environment, better understanding of property rights, and, you know, the general political stability, which I think, in fact, is being addressed in a positive way.”