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The Russia Forum gives new impulse to domestic market development

4 February 2008

The results of the three-day Russia Forum held in Moscow from January 30 to February 1 upon the initiative of the Troika Dialog Group of Companies have been summed up.

As the organizers planned, the Forum differed from traditional economic conferences and developed into a major event that opened the business season in Russia. The Forum was attended by some 2000 guests and delegates from 33 countries of the world, over 120 speakers, including top managers of large companies, federal authoritiesí official representatives, and people from investment communities and public elites.

The first day of the Forum was devoted to macroeconomic processes, the role of Russia in the economic and political world system, and the changing paradigm of the global economy. Describing the current situation, Russian Deputy Prime Minister and Finance Minister Alexei Kudrin spoke in detail about Russian strategic tasks in the economic sphere and the factors that allow to say the tasks will be accomplished. In 2007, Russia reported new economic growth rate of 7.8% of the GDP exceeding the 2006 record of 7.4%. Such a high growth testifies to stability of the Russian economy, while the Stabilization Fund, which exceeded 156.81 billion dollars by January 1, 2008, allows to protect it from any outside shocks. Dwelling on investments into the Russian economy, the finance minister said they have considerably grown of late. Thus, in 2007, 47 billion dollars of foreign investments arrived in the country, which is close to 3.7% of the GDP. The total growth of foreign and domestic investments comprised 21% against 12% in 2006. Even the most cautious and conservative forecasts allow to predict at least a 14% growth in investments in 2008 and they are likely to double to 490 billion dollars by 2010.

Regional Development Minister Dmitry Kozak continued the investment topic and said one of the main government tasks today was the formation of a good investment climate in the regions so that investments flow not only to the Russian capital and major cities, but to other regions as well. The minister actually specified three instruments of the regional policy of the state. Firstly, it is necessary to create conditions for direct investments, to lift infrastructure barriers that impede business development and are related to the creation and modernization of transport networks and the development of power-engineering. Secondly, it is necessary to delegate certain powers from the federal center to the regions. The third instrument comprises direct financial assistance to the regions, which need it to develop local private enterprise and business infrastructure. The innovation proposals of the Regional Development Ministry of Russia regarding increased resources, investments and powers demand a higher level of responsibility of the regional leaderships for the end result. Such an approach to the development of regional potentials in the interests of the whole Russian economy can give a considerable impulse to the economic growth in the regions and to the implementation of large-scale regional projects similar to the Ust-Luga project, in particular.

The interactive format of the Forum allowed to hold parallel discussions on several platforms. Skyrocketing growth of the consumer market and its individual sectors, including the fastest growing car market in the world, globalization of stock exchanges, the attractiveness of direct investments, high-tech development in Russia, real estate market boom and related prospects, infrastructure projects and the role of the middle class in the development of a civilized market comprised just a small part of the topics that triggered heated debate and discussions not only at workshops, but also in the back rooms and at unofficial events of the Forum.

The speeches delivered at the Forum by the founder and President of Virgin Group Richard Branson, President and CEO of Renault and Nissan Carlos Ghosn, former German Foreign Minister and Vice-Chancellor (1998-2005) Joschka Fischer, Director General of Magna International Siegfried Wolf, the founder of the XXI Century School and the Institute of Science and Civilizations at the Oxford University James Martin and other representatives of the international business community provided a new look at the economic and social processes in Russia.

It was important for the Forum participants not only to listen to the speakers, but also to ask their own questions to those who attended workshop discussions. Politicians and investors, as well as Russian culture workers joined in the discussion. Endowment funds, which accumulate donations from patrons of art, can appropriate them to support non-profit organizations. The founder of the Give Life charity fund, actress Chulpan Khamatova, said goal-oriented funds should actively develop. Discussion participants stressed that such a mechanism would allow the business to donate money for charity and remain transparent at the same time.

The Russia Forum organizers believe the positive charge enjoyed by all the participants through direct communications with each other will give a new impulse to the development of the domestic market and will yield practical results in the form of new Russian and international projects.