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10 Jun, 2008 00:57

Russia’s 'extraordinary' economy praised by top CEO

Russia’s economy has been hailed as one of the world’s most successful of the last decade. That was the verdict of one of the top western investors at the 12th World Economic Forum in St. Petersburg.

Citigroup CEO Michael Klein said: “The financial stability that has been achieved – to move from external liabilities that were well in excess of GDP to the size of financial stability and liquidity today, as represented by the reserve funds, the stability funds and the investment in public companies – is nothing short of extraordinary.”

14 billion dollars worth of contracts were signed at the conference, which is an opportunity for global business to meet Russia’s top men face to face. Foreign investors applauded the optimistic forecasts for Russia's economic future.

Researchers at Goldman Sachs Investment Bank say Russia will double its GDP to 3 trillion dollars by 2020.

To keep up with this economic growth, Moscow wants to launch a new project aimed at developing the country’s workforce. It would allow a new generation of specialists trained abroad to return home as skilled professionals.

So business is booming, but there were warnings that the healthy situation is heavily dependent on oil and gas. And while Russia has given assurances that it would remain a reliable source of energy it also wants to produce its own major brands.

But one western commentator reckons that is more difficult than it sounds. The Financial Times’ Moscow Bureau Chief, Neil Buckley, said: “It is quite early to be developing Russian brands. The aim of having them is an admirable one, but I think it's going to take some time.” 

Meanwhile, less state interference in the economy is something foreign investors have long wanted. First Deputy Prime Minister, Igor Shuvalov, has pledged that the Russian government will takes steps to address the problem.

He said: “Soon we will rotate the boards of directors of different companies that are fully government owned. We aim to replace the government officials and replace them with managers. We will also implement new forms of corporate government and governmental corporations making them clear.”

The consensus from many experts at the forum is that a lot or work remains to be done, but also, that foreign investors like what they see.