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20 Sep, 2008 14:43

Sochi forum hopes to boost regions

Business leaders have turned their attention to Russia’s regions on the second day of the Seventh International Business Forum in Sochi. Talks on boosting Russia’s local economies have taken centre-stage.

Despite tension on the global financial markets, the Sochi Economic Forum has seen 112 business deals signed worth almost 14 billion Euros.

Meanwhile, Russia’s Prime Minister Vladimir Putin has taken part in a meeting with Russian and French businessmen.  He has also attended a session of the commission for Russia-French bilateral cooperation.

The future development of Russia’s regions, including Krasnodar, Yaroslavl, Tver and others have been explored in a series of presentations at the forum.

Friday’s opening day was dominated by the turbulence on the Russian market, with the business community eagerly waiting reassurance from the government that it would take the necessary steps to stabilise the economy.

And Prime Minister Putin’s address to the forum succeeded in calming nerves. He said the fundamentals of the Russian economy were “normal” and the government would continue to respond to financial and market problems.

“The government and the Central Bank have enough reserves to protect the national currency and Russia’s financial system. We have a positive balance in the budget and currency reserves of more than $US 550 billion,” Putin said.

Referring to the government’s priorities, Putin pointed to the elimination of barriers, stimulating investment, boosting competition and developing anti-monopoly mechanisms.

Eight thousand people from 40 countries are taking part in the forum, and organisers are hoping to break last year's record number of new contracts which brought an extra $US 20 billion into the Russian economy.

In his speech to the Forum, Vladimir Putin stressed that Russia is interested in attracting further foreign investment.

“Although of course we expect it is mutual and foreign partners are ready to accept investment from Russia. We don't understand it when barriers are raised strictly on a political basis that have no grounding in economics,” Putin added.

Russia is not going to choose a standoff or cut economic relations with the rest of the world, he said.

Putin emphasised that the strategic sectors of the Russian economy are not closed to foreign investors.

“Recently a law was approved in Russia on the procedures for making foreign investment in the strategic sectors of the economy,” Putin said.

The Russian Premier also said that Russia's oil and gas sector may switch to operating in roubles, at least for some types of deals.

Russia’s energy giant Gazprom has also proposed using roubles to deal with some partners from 2009.

As for the problems on the financial and stock markets, the Russian Prime Minister said the response to them will be market-oriented.

“The government and the Central Bank have sufficient reserves to defend the currency and the financial system,” Putin said.

Vladimir Putin also said the Russian government is considering measures to reduce taxes. It has already decided to cancel income tax for stock market participants, Putin said.

“We are discussing other steps to further reduce taxes. Naturally, in so doing we take into account the budget potential and the possible scenarios of the pension reform,” the Russian Premier said.