Rebounding Russia returns as investment target
As Russia starts rising from the bottom of the crisis, investors regain confidence.
Addressing the fifth Russian-British investment forum, Presidential economic aide, Arkady Dvorkovich, said the economic numbers are stacking up much better for next year, and investment sentiment is returning.
“There was practically no outflow of direct foreign investment in Russia during the crisis. Construction of new enterprises and capacities continued and new companies kept entering the market. Unlike this year when we certainly came to around a 10% slump, next year we expect growth of foreign investment.”
The UK is the 4th biggest investor in Russia, injecting $25 billion dollars this year despite the global meltdown. But both sides say there’s room for more. It's a serious business for Britain – with no less than Prince Michael of Kent, Patron of the Russian British Chamber of Commerce promoting the advantages of stronger two way trade and investment flows.
“Investment opportunities here are very great. The great thing about Russian-British Chamber of Commerce is that unlike most chambers, this is a chamber which promotes the trade in both directions.”
Despite the first signs of recovery, Russian banks are still struggling with non-performing loans. Gennady Melikyan, Deputy Chairman of the Central Bank of Russia, says Russia has to find a sensible way to work through restructuring these loans.
“Bankers believe the state should buy out toxic loans. This is already being done with banks which are being restructured. But such an approach can also be dangerous if used on mass-scale. Another way to tackle the problem is to try and increase the capital of banks which have non-performing loans.”
But optimism is growing with increasing belief that a second wave of the crisis has been avoided. Nonetheless it’s going to take years for Russia to recover completely and strengthen to a robust economy.