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Russia: Economic Forum Takes Aim At Russian Business


http://gdb.rferl.org/DE1DCAA5-467C-4C7E-9F03-F53B5591F008_w203.jpg --> http://gdb.rferl.org/DE1DCAA5-467C-4C7E-9F03-F53B5591F008_mw800_mh600.jpg Rosneft President Sergei Bogdanchikov was one of the featured speakers (file photo) (ITAR-TASS) Leading Russian businesspeople, politicians, and foreign investors have been meeting in London this week to toast their recent successes and to discuss the current and future business climate in Russia. This year's Russian Economic Forum, which wraps up today, has taken on new significance as the "barometer of the Russian economy."


LONDON, April 25, 2006 (RFE/RL) -- Coming off a year in which an estimated $17 billion in foreign direct investment was pumped into Russia, the mood of Russian business representatives at the ninth annual Russian Economic Forum has been largely positive.

And with the country taking on the presidency of the Group of Eight industrialized nations, a number of initial public offerings on tap, and its rising status as an energy supplier, Russia is attracting global attention as well.


Image Makeover


With that in mind, changing the perception of Russian business abroad is one of the key objectives of the April 23-25 forum. That according to Simon Joseph, general director of Eventica, the Russian-British company that organized the event.

"The idea is to show different sides of Russia to Britain. Russian business, Russian culture, what's happening in Russian politics to a certain extent, although the focus is mostly on business, and also to give Russian people a chance to look into a mirror, so to speak," Joseph said. "To come to London and to get a feeling for how the rest of the world is looking at them, with the feedback they get from people here."

Much of the focus at this year's forum was on addressing the concerns of foreign investors, whose interest was piqued when key Russian business and government officials used last year's event to criticize the lack of transparency and constraints placed on Russian business.

This year's meeting attracted 2,000 attendees -- representing investment funds, accounting firms, oil and gas giants, and global media. They have been treated to discussions of property rights, Russia's judicial system, corruption, and the relationship between the state and business.

"The idea is to show different sides of Russia to Britain. Russian business, Russian culture, what's happening in Russian politics to a certain extent, although the focus is mostly on business, and also to give Russian people a chance to look into a mirror." -- event organizer

They also heard criticism of the state's predominant role in big business for the second year in a row.

Alfa Bank President Pyotr Aven, who was among the most vocal critics of Russia's economic reforms during last year's forum, yesterday decried the increase of state spending.


"In our country the state apparatus is growing at a gigantic, catastrophic speed," Aven said. "It poses a serious question about how effectively economic problems can be tackled in this situation."

Another, prominent speaker, Unified Energy Systems head Anatoly Chubais, told participants he considers the increasing role of the state to be a tactical mistake.

"I consider these actions to be a huge tactical -- and I stress it -- a tactical mistake," Chubais said. "I am sure that in five or three years it will be easily understood. Then the second wave of privatization will come."

Rosneft In The Spotlight


One of the most anticipated speeches of the three-day event came from Rosneft President Sergei Bogdanchikov, whose company is preparing for an initial public offering this summer that is expected to be one of the largest in history.

Bogdanchikov said yesterday that Rosneft, which benefited greatly from the downfall of Yukos by taking over its subsidiary, Yuganskneftegaz, is now the "absolute leader in reserve growth" worldwide and third in exploration. He predicted that by 2015 the company would double its current output and become the world leader in terms of capitalization.


Youth Movement


But while much of the attention was given to the future of major Russian firms, their smaller brethren were not forgotten. Instilling a mind-set of fresh thinking by attracting representatives from Russia's entrepreneurial ranks was one of the key objectives of the forum.

"Maybe a few years ago we would have loved to have had them and they would not have come," explained event organizer Joseph. "Now, they're calling us and pushing us and they're ready to come over. And that's very important, because that's the critical thing for the Russian economy. I think that these smaller companies will get stronger and that you will see a new business environment forming with people who are bringing fresh ideas that are completely untainted by the old system."


The Rosneft president said the company, which benefited greatly from the downfall of Yukos by taking over its subsidiary, Yuganskneftegaz, is now the "absolute leader in reserve growth" worldwide and third in exploration.

One young businessman who made the trip is 36-year-old Aleksandr Gordiyevskikh, from the Siberian city of Tomsk. His firm, Tommarket, reprocesses glass to produce panels that can give new life to the facades of office and industrial buildings.

"We have set ourselves a goal of changing the look of Russian cities, especially Siberian cities in connection with the fact that in our regions one would wish to have better architecture," Gordiyevskikh said. "We would like to see the maximum use of glass."

After finding an investment partner after attending last year's forum, Gordiyevskikh came this year looking to expand his business.

Another representative of Russia's younger business circles, 34-year-old Ruslan Sitdikov, came to London to promote Rus'n Rus Agro, a Nizhny Novgorod-based agricultural company.

"Well, I am in London first to learn about the trends of business development in Russia, to meet up with my colleagues from Russia, to find partners for the enlargement and strengthening of our company on the Russian market," he said.

Sitdikov, who is vice president of the company, hopes his first trip to the forum will result in new investment partners. As for how free Russia is today for doing business, he smiled, saying only that there is "enough freedom."

(RFE/RL's London-based correspondent Jan Jun and RFE/RL Russian Service's Mikhail Sokolov contributed to this report)

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