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Turning around Russia’s capital outflow

With Russia is seeing a massive capital outflow Business RT spoke with Yury Voiсehovsky, Chairman of the National Council for Investment Climate Development about the expected impact of the new $10 billion state backed investment fund.
­RT:   Oil is falling, the markets are falling and capital is leaving Russia. How can investors be persuaded to bring their money here?YV: “Russia is still seen by investors as an important market.  In size of retail market for example, Russia is still rated top ten.  Of course dependency on oil prices remain, and everything correlates to that.  In recent events we see that being confirmed again, and what Russia needs to do of course, is to decrease its dependency and attract more investments into other sectors, and that is the signal Russia is sending out to the world and that is exactly what Russia should be doing.”RT:  Is it still an attractive investment destination?YV:  “Yes of course it is.  But what you need, you need a clear strategy an understanding of what you want to do, and understand risks, and one of the things we always recommend to investors when we talk to them is to have a strong local partner who understands the market.”RT:  Do you think Russia could be seen as a financially safe haven in terms of the sovereign debt problems that we are seeing in Europe, which Russia doesn’t have for example?YV:“Of course I think when investors looking to buy currencies and a basket of different instruments, I think, I am sure all global investors would have Russia as a certain portion in their portfolios.  I remember I recently visited a forum and the audience was asked whether we were going to experience future sovereign defaults, and unfortunately all the audience was thinking yes, nobody says no, and people were splitting.  And I think in this environment of uncertainty I think Russia still remains very attractive.  Because I am sure that when people talked about it they did not mean Russia, they were talking about other countries.”RT:  What about the initiative we are seeing right now from the government to attract investment?  Obviously it’s a very important task.  We are seeing the privatization programme and we are seeing this investment fund, this $10 billion fund being created.  Is that going to help do you think?YV:“It is going to help but I think we need to do more, and our council has already argued for a couple of initiatives which some were being implemented like you see KPI for local governments, in terms of size of foreign investments in a particular region.  But we need to go beyond that.  We need to have an agency for foreign investments, an agency which will not only attract foreign investments but also be that partner for investors and actually help investors to manage risks and deal with some uncertainties.  I also argue that Russia needs to learn how other countries dealt with corruption and use some foreign experience there.”