Investment Forum In Sochi To Be Interesting For Foreign Business – OpEd

Less than two weeks are left until the Russian Investment Forum (RIF) will start its work in Sochi, on February 27–28.

According to the organizers, the event will have nearly 4 thousand visitors, including heads of major domestic and foreign companies, politicians, and representatives of business and scientific circles from Great Britain, Austria, Germany, France, Switzerland, USA, Afghanistan, Kazakhstan and Japan.

The forum program will consist of three main thematic blocks: New Regional Policy: Opportunities for Development, Improving Business Performance: Opportunities for Growth and Projects for Life.

Particular attention will be paid to labor productivity, formation of industrial clusters, balanced budget system, developing of advanced special economic zones (ASEZs), business conditions in the Far East, infrastructure projects, legal aspects of entrepreneurship and tourism industry problems.

Besides, events on the Sidelines of the Forum will include the 19th World Festival of Youth and Students, and Programs for Supporting Gifted Children and Young People as Part of the Russian Federation’s Scientific and Technological Development Strategy.

Analyzing the potential of the upcoming event, President of the Russian Investment Agency Yuri Spiridonov said that the Forum is a very significant event for attracting investment to the country.

“During the meeting last year, dozens of agreements were signed totaling to hundreds of billions of rubles. Initiated in 2002 by the Krasnodar Krai authorities to attract investment, the Forum became a platform for the presentation of Russian regions’ large-scale projects,” Yuri Spiridonov told PenzaNews.

However, great job need to be done to fully reveal the country’s investment potential, he believes.

“The disparity between regions in terms of attracting investment is very high. Foreign companies traditionally tend to invest in manufacturing industry. It accounts for almost a third of all investments,” the expert said.

At the same time, in his opinion, regions’ investment attractiveness depends on the solution of the main problematic issues.

“In particular, this includes prompt official registration of land, obtaining approval documents, technological connection to the networks of gas, electricity, heat and water supply, as well as the development of business infrastructure,” President of the Russian Investment Agency explained.

“Those regions of the Russian Federation, where the governors were able to create the most comfortable conditions for investors, provided the investment growth even despite the lack of high resource potential or the potential that the regions with major metropolitan areas have,” he added.

He also reminded that RIF will become the first major investment forum this year.

“In this regard, high expectations are rested in this event, which is setting the positive trend: a modest but steady growth of foreign investments took place in Russia during the last two years in spite of the sanctions. It is necessary to significantly increase this standard by the end of the year and create a positive trend for 2018,” Yuri Spiridonov said.

In turn, Shankaran Nambiar, Senior Research Fellow at Malaysian Institute of Economic Research in Kuala Lumpur, expressed the view that RIF will become an important event that will define many aspects of investment.

“There is growing recognition in Russia that South-East Asia is a growing and vibrant region with which it would be advantageous for Russia to develop ties. There are many reasons why Russia should direct more attention to ASEAN, including good economic and geopolitical reasons,” the analyst said.

From his point of view, there might be initial uncertainty and reluctance on the part of companies, which are going to invest in Russia. This can only be overcome through sustained efforts by Russian agencies to encourage investment in Russia, he believes.

“Similarly, Russia should trade and invest more intensively with ASEAN. This has been very limited in many ASEAN countries, since Russia has tended to favour countries with which it has had strong traditional and historical ties,” the expert said.

According to him, the forthcoming forum appears to have a narrower focus than other events which have taken place in Russia recently.

“RIF seems to be more inward looking and lacks wider participation from ASEAN stakeholders. Hopefully, the Forum will trigger more interest from Russian companies and agencies to take advantage of opportunities in South-East Asia,” Shankaran Nambiar said.

Meanwhile, Philip Hanson, Associate Fellow, Russia and Eurasia Program, Chatham House, shared the opinion of the forum’s great importance for companies operating inside the country.

“The RIF is in practice a mainly domestic event, at which practical policy issues are discussed, with a large official presence. Foreign participation has been limited, though consulting firms like EY, PWC and McKinsey send representatives, as do some firms that are well established in Russia, like Fortum,” the British analyst said.

“A historically cheap rouble makes some investment from abroad an attractive possibility, but continuing sanctions, high levels of economic uncertainty both in Russia and abroad, and Russia’s continuing problem of a weak rule of law limit likely developments,” the expert added.

However, there is some potential benefit to international trade and investment, he believes.

“At a time like the present, when sanctions [against Russia] are being questioned and Russian assets are relatively cheap, foreign business will be interested in what is said at a forum such the RIF,” Philip Hanson said.

According to Termsak Chalermpalanupap from the Institute of Southeast Asian Studies, Singapore, the upcoming Russian Investment Forum appears to be very interesting and useful to potential foreign investors from around the world.

“It comes at a time when the world is looking for a new leadership to stimulate a more vigorous and sustainable economic recovery. Russia certainly has the potential to step up and provide the new leadership,” the expert said.

In his opinion, the Forum can provide the necessary and useful new and up-to-date information on Russia.

“This will help foreign investors and business people to form a more careful and insightful judgement on their investment and business decisions in venturing into the Russian economy and market,” Termsak Chalermpalanupap explained.

According to him, Russia’s business conditions are good.

“Moreover, they are improving, especially when there are concerted government efforts in promoting and welcoming foreign investments and supporting Russian business people to collaborate with their foreign counterparts. Russia has modern and advance science and technology, energy and other raw materials, as well as vast natural attractions for tourism,” the Singaporean expert said.

“One important political impact of the Forum is a clear signal of Russia to the world that Russia is determined – and has the potential – to play a leading role in the world economy,” he resumed.

Source: https://penzanews.ru/en/analysis/63605-2017

Penza News

Penza News

News agency PenzaNews is Russian independent information project, which supplies a steady stream of news. The website is constantly updated to bring the top stories from the city of Penza and the Penza region. The Analysis center of the agency covers important political, economic, cultural and other significant events in Russia and abroad.

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