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Alexei Kudrin: "Russia is capable of changing the world architecture"
Russia Forum opens in Gostiniy Dvor

30 January 2008

The international economic Russia Forum initiated by Troika Dialogue Group opened on January 30 in Gostiniy Dvor in Moscow.

Opening the Forum Chairman of the Board of Directors of Troika Dialogue Group Ruben Vardanyan said the world is displaying a major interest in what is happening in Russia. The very fact that over 1000 participants from 33 countries arrived to attend the Forum confirms the necessity of an international dialogue between Russian market participants, business representatives, investors and government officials. The new Forum became a platform for such a dialogue by offering the participants a polemical and discursive format, rather than the usual presentation form of similar events. "It is extremely important that we shall discuss not only the developments in Russia, but also the basic trends in the world economy and the Russian role in the processes over these three days," Vardanyan said.

The expediency of the chosen format and of the Forum agenda was confirmed by the plenary session, at which Russian Deputy Prime Minister and Finance Minister Alexei Kudrin took the floor. "Several years ago it was difficult to imagine that the biggest conference halls in Moscow would be unable to accommodate all those wishing to discuss Russian economic prospects. It is important that we have the chance to communicate a month before the presidential election and discuss the current and future situation in Russia," he said.

Dwelling on the current economic situation, Kudrin spoke in detail about Russian strategic tasks in the sphere of economy and factors which allow these tasks to be accomplished. In 2007 Russia demonstrated a new economic growth rate of 7.8% of the GDP, which exceeded the 7.4% growth of 2006. Such a growth differs from basic trends on the world market and indicates sustainable development of the Russian economy, which is immune to outside volatility. Decreased state debts and aggregate debts of corporations and banks, as well as major changes in their structure (the government accounts only for 4% of debt obligations and the rest is the debt of banks and corporations) show a good forecast growth rate for the future. Due to liberalized capital flow in 2006, the domestic economy reported a positive capital inflow balance in the past two years: two billion US dollars in 2006 and 82 billion dollars in 2007. Simultaneously, 47 billion dollars of foreign investments, which is close to 3% of the GDP, came into the Russian economy in 2007. Total foreign and domestic investments grew 21% against 12% in 2006. The finance minister also said the most cautious and conservative forecasts predict at least a 14% growth of investments in 2008, while their amount will double to 490 billion dollars by 2010. The expected Russian accession to the WTO in the near future will open the door for domestic companies to the global market. Kudrin described the WTO accession as a strategy for those who do not fear competition and access to open markets. Such an economic strategy would be most beneficial for Russia, he said.

The finance minister listed among the major tasks of the Russian economy the necessity to reduce the dependence of the domestic market on world prices for oil, natural gas and mineral fertilizers, the necessity to diversify economy, to better forecast currency exchange rates and inflation, liberalize domestic markets, including those occupied by the so-called natural monopolies. "The accomplishment of the tasks will help the Russian economy become a major economy in the world," he stressed.

After his speech Kudrin joined participants in the discussion devoted to the role and place of Russia in the world economic system. Former German Foreign Minister and Vice-Chancellor (1998-2005) Joschka Fischer, President and CEO of Renault-Nissan Carlos Ghosn, CEO of the UES of Russia electric utilities Anatoly Chubais, Director of the Institute of the Transitional Economy Yegor Gaidar, Vice-Chairman of Marsh&McLennan Companies David Nadler, former President of Costa Rica Jose Maria Figueres expressed their own points of view regarding Russias prospects on the world economic arena and responded to the questions of President of the Russian Television Academy Vladimir Pozner and other Forum participants.

The participants discussed the role of the foreign and domestic policy of Russia in the perception of its image by the international community, the influence of global economic, political and ecological risks on local markets, but all agreed that Russia was ready for changes on the world market and that its role in the international economic system would only grow.