The International forum in St. Petersburg brought in 15 billion Euro worth of signed contracts as hundreds of companies from all over the world came for Russia’s top business event.
The deals ranged from building skyscapers to nuclear plants. But the main focus of the event was not the big money, it was the shifting focus from oil and gas and resources to green energy, nano technologies and hi-tech industries Russia was extremely keen to get this message across to the international business community.
Visiting the forum, President Medvedev personally saw how Russian state-owned giants were becoming state of the art. To make Russia into a modern state would require and investment boom, said the President as he announced a raft of business friendly measures and tax breaks.
“In Russia as of 2011 we’ll fully eliminate the capital gains tax for direct long term investments on zero capital gain tax for long-term direct investors.”
Drew Guff, Managing Director at Siguler Guff, applauded the president’s proposals.
“We are now with the government’s push and emphasis on the innovation economy we’re very focused on new technologies, on companies that are young, fast growing.”
Christian Morales, Vice-President Intel Emea, said the potential is very high in Russia.
“We keep on looking at expanding in Russia…we have a thousand engineers in Russia already – the skill set, the level of their expertise is so high is such we are developing more and more projects in Russia.”
Foreign Investors welcomed simplified migration rules for “highly-qualified” workers. A fivefold cut in the number of strategic enterprises, those which the state deem are too important to liberalize, also drew applause as it would allow foreigners to invest into some lucrative, previously protected industries.
Anatoly Chubais, CEO Rosnano, said the governments modernization push is unprecendented.
“Do you understand what it means? That the huge privatization program in the decade, it never happened before!”
The need for modernization was spelt out by Russia’s Finance Minister Aleksey Kudrin. He revealed the country’s budget deficit would be as bad as or worse than the heavily indebted European nations if oil and gas revenue was stripped out. The new approach to modernization seems to recognize that the private sector will be able to take care of the process if it’s given a free run.