OUR MOSCOW CORRESPONDENT INTERVIEWED THE VICE PRIME MINISTER OF THE RUSSIAN FEDERATION, MINISTER OF THE ECONOMY, YAKOV URINSON

What objective do the representatives of your ministry have in mind when going to the St.-Peterburg forum?

For us, for our ministry, the St.Petersburg forum represents an additional opportunity to encourage our native entrepreneurs, businessmen and bankers from neighboring countries and from far abroad to participate in various projects, the realization of which is to reanimate the industry and bring the Russian economy to the level indicated in the President’s message to the Federal Assembly and in the middle-term government program. We want to convince the businessmen of the world with calculations in our hands that investing in the Russian industry they will obtain considerable dividends and increase their capitals within only a few years. At that, we cannot forget the principles that guide our work — to promote financial and macroeconomic stabilization under the conditions of controlled inflation.

Don’t you think that the potential investors will be embarassed by Russian imperfect, and sometimes preposterous, taxation laws?

Yes, although these laws were improved a little, in their present state they cannot help to promote serious investments in the industry. However, the situation is to change dramatically by the end of the year. New light taxation laws eliminating nonsenses and defects that forced potential investors to avoid Russia either have already passed through Duma or are being considered now. New laws will give the producer incentive and open the credit resources of banks for him. All this together will lead to the stabilization of industry and the resumption of economic growth. It will be profitable to invest in Russian enterprises.

Please, forgive me my insistence, but are there prerequisites for foreign participants to believe that the laws you were talking about will be passed and observed carefully?

Absolutely. You know, nobody trusts words, people trust numbers and concrete figures. And the credit history of Russia provides evidence that this country is, although slowly and sometimes hesitantly, but steadily, advancing on its way to a normal market economy. Here are a few facts: inflation was cut from 20% a month at the beginning of the reforms down to a little more than 1.5% a month this year; the astronomic budget deficit was reduced to 3.5%, the total amount of cash is strictly controlled, international debts are paid in time and Russia is going to join the London and Paris currency clubs. This undoubtedly gives the businessmen enough foundation to feel confidence for the capital they invest into Russia. However, one should not forget that any entrepreneur would like his money to work with maximum efficiency and having been invested into the production, to bring profit and, for instance, not to be used for the social programs of the enterprise or for its mobilization capacities. The investor is justly demanding a right to be admitted to the plant, check the financial documents while some of our enterprises shut their doors in front of their owners. This has happened in Kuzbass, Novolipetsk and other places. The investor is justly demanding the cost of the enterprise to be evaluated not using former building expenses but via its current state and ability to bring profit.

The government has developed and started to realize a concept of reforming the enterprise. It requires a clear definition of the owner’s rights and manager’s responsibilities, an objective evaluation of the cost of property and fixing it using an independent registering office, the use of international standards of accounting. All this together will help to create a favourable investment climate.

I would like to mention that the department of economy has long since started to investigate these questions. Two years ago we created a special center for attracting foreign investments. According to the developed program, we have already held nine international meetings, which we nicknamed “Days of Russian economy”, with the representatives of business circles from Europe, America and Asia. The most successful days took place in Paris last year, in Frankfurt am Main this March and in Spain this April. We have opened special innovation offices in England, France, Germany, Italy, Singapore, introducing various investment projects to those who are interested and also practicing direct marketing.

Is the Ministry going to present any projects on the forum?

In St.Petersburg, we will participate in the roundtables and symposia. The Russian center for attracting foreign investments has prepared for distribution the so-called guides, the innovation tourbooks of Russia to be received by all foreign participants. A presentation will be held including about fifty investment projects related to various fields, in particular, to the hotel building, agriculture construction, perfumery and pharmaceutical production, beer making and strong drinks, to the oil and gas complex. A number of projects that we will be representing are connected directly with the development of St.Petersburg as an economic center of the North-West region of Russia which includes Arkhangelsk and Murmansk and as a major link between Europe and Asia.

Our prime objective at the forum is to create an attractive image of Russia as a reliable partner, the economic collaboration with which opens rich perspectives for the investors. We have all chances to achieve this goal.

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