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19 Sep, 2008 19:52

Crisis? What crisis?

Foreign investors say their business in Russia has not been affected by the recent turmoil on the country's financial markets. Meeting for an economic forum in the southern Russian city of Sochi, the business community p

Positive news from the Russian stock market defused a tense atmosphere on the first working day of the business forum in Sochi.

Speakers at the plenary session even joked and advised buying Gazprom stocks before lunch as they were getting more expensive by the minute.

Vladimir Putin’s speech added more confidence. The prime minister said that despite the current situation Russia's GDP will continue to grow by seven per cent annually.

Indeed, some business leaders even regard the crisis as an opportunity for Russia.

Mikhail Prokhorov, the head of Onexim Group said: “I consider this crisis a great opportunity for our country and for my own company. A crisis of such proportions will bring the feeders to the front. First of all we have to minimise the consequences of the crisis, then to expand in sectors in which we are competitive and to bring as much world financial capital as possible into Russia.”

Meanwhile, despite several cash infusions Russian companies have started cutting back investment and postponing projects due to a lack of short term loans.

Vagit Alekperov, President of Lukoil said: “The global financial crisis has made it tougher for all companies to raise money. That’s why some of our most capital-intensive and long-term projects are to be postponed, especially newly launched ones. We are going to postpone investment into complex oil refinery for a long term period, the developing of a new cracking plant in Volgograd and a chemical factory on the Caspian Sea. But new oil fields will be launched in time.”

The World Bank says the financial markets still need government cash support but strategic foreign partners remain confident in the future growth of the Russian economy.

French business leaders say the current market situation won't change their plans in Russia. The French delegation will discuss their partnership with Russia at a meeting with high-ranking government officials on Friday.