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18 Oct, 2010 18:16

PM talks up the field for foreign investment

Prime Minister Vladimir Putin has heard from international investors into the Russian economy about the issues they face, and has promised that although problems remain, more will be done.

$100 billion has flowed into the Russian economy as foreign investments this year.

But it could have been more – if not for administrative barriers, a lack of access to infrastructure and labour difficulties in the regions – according to Alcoa President and CEO Klaus Kleinfeld.

“Obviously there’s different stories to different regions but there’s a theme of basically four major factors that could potentially be released. Number one is inadequate training of the workforce. Number two, it's difficulties for accessing financing. Number three, it's high levels of corruption. And number four it's unfair competition from the grey market.”

The Prime Minister took note of the criticisms and assured the assembled investors and business people he understood their problems. However, he was keen to point out the progress that had been made – the red tape that had been slashed, the fight against corruption and the opening up of the Russian market.

Reform would continue he said, pledging that foreign investors could count on getting the same treatment from the offices of state as domestic companies.

“The Russian government has a strong incentive to quickly improve investor sentiment. It has an extensive programme of privatisations to get away – with as many as 20 of the country's biggest state run companies marked for possible sale.”

The finance ministry wants to raise around $50 billion from the assets over the next 5 years to help cover the budget deficit. It's an ambition that will be hard to achieve if outside money is afraid to come here.