BOOKMARKS www.economy.gov.ru Ministry of Economic Development
RUSSIA INDIA REPORT
03
www.minfin.ru/en Russian Ministry of Finance
wciom.ru VTsIOM public opinion foundation
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA
www.cbr.ru/eng/daily.aspx Russian Central Bank THE ECONOMIC TIMES WEDNESDAY_JULY 08_2009 Business
Crisis Despite the global economic downturn, Russia remains a promising prospect for those with an Russia & India News:
eye for business and money to spend – the government is working hard to attract foreign capital
Indian company to join the Novaya
Anapa tourist SEZ project
The Krasnodar regional office of the Russian
The age of investment
Federal Agency for Management of Special
Economic Zones (RosOEZ) and India's Labindia
Consultants Pvt. Ltd. have signed a protocol of
intent, the regional office reports.
As part of the arrangement, Labindia Consultants
Pvt. Ltd. will act as an independent advisor and
snobbery is long gone
provide expert opinions on the proposed archi-
tectural design and construction technologies for
facilities to be built as part of Novaya Anapa.
“The Indian company has also pledged to seek
and attract investors for the project,” the spokes-
person elaborated.
Sergei Merkhalev, Deputy Head of RosSEZ's
The annual investment forum Krasnodar regional office, said construction will
will take place from 17-20 be in full swing at the Novaya Anapa special
September in Sochi, host of economic zone by the second half of 2010.
the 2014 Olympic Games. It “This infrastructure project is fully state-control-
traditionally includes meetings led: new engineering capabilities will be imple-
between entrepreneurs and mented here,” he said. ITAR-TASS
political figures. Foreign
investors have the opportunity
to find out if investing in Russia
is really worthwhile.
Medvedev urges completion of
aircraft carrier for India
OLGA SENINA
The Russian president said that modernisation of
RIR the Admiral Gorshkov aircraft carrier should be
completed as soon as possible so that it could
Arguments in favour be delivered to India in 2012. Dmitry Medvedev
At the height of the interna- said, "This is the very first, difficult experience.
tional fi nancial crisis, the Abu The ship must be finished." "Otherwise, there
Dhabi Investment Company will be serious consequences we may have to
got involved in the Russian bear." India and Russia have yet to agree on
Olympic construction project. the cost of overhauling the Admiral Gorshkov for
At the beginning of June, it the Indian Navy (to be renamed Vikramaditya).
announced it had taken a Under the original $1.5 bn 2004 contract be-
stake in the Krasnaya Polya- tween Russia's state-run arms exporter Rosobo-
na company, responsible for ronexport and the Indian Navy, which includes
the Gornaya Karusel sports delivery of MiG-29K Fulcrum carrier-based
and tourism complex in Sochi. fighters, the work on the aircraft carrier was to
This was one result of the re- have been completed in 2008. However, Russia
cent international economic later claimed it had underestimated the scale
forum in St Petersburg. The and the cost of the modernisation and asked for
new shareholder’s stake is not an additional $1.4 bn, which New Delhi said was
revealed, but overall invest- "exorbitant". Indian officials, familiar with negotia-
ment is valued at 28.5 bn rou- tions said the eventual figure would be closer to
bles. the $2.2 bn estimate. RIA Novosti
The crisis is an excellent time
to enter the Russian market,
believes Vyacheslav Tabach-
Indian company to invest in
nikov, director of the Moscow
office of Cassidy & Associates
initiating silicon carbide production
CIS, one of the leading lobby- Indian businessmen plan to invest $25 million
ing firms in the USA. Com- offsetting up a new silicon carbide production
mercial benefi ts are obvious; facility. The funds are expected to be invested in
the cost of property has fallen the Volzhsky Abrasive Works in the Volgograd
considerably. Devaluation of ALEXEY NIKOLSKY_RIA NOVOSTI Region, according to M. M. Murugappan, a
the rouble has reduced the member of the Board of Directors of the diversi-
cost of Russian holdings and Russian Prime Minister Vladimir Putin has backed the participation of Royal Dutch-Shell in the Sakhalin III and IV projects."I expect it is quite possible to con- fied holding Murugappa Group.
expenditure in roubles. “The tinue cooperation with Shell on other sections - Sakhalin III and Sakhalin IV," Putin said at a meeting with the oil major's CEO, Jeroen van der Veer “In 2007, India invested $40 million in acquiring
market was so overheated an 84pc stake in the Volzhsky Abrasive Works,”
that extra costs were spring- For example, the plan for de- Chinese, Japanese and Arabs he said. “A three-year production facility mod-
ing up everywhere, from en- The crisis suits me velopment of the pharmaceu- have money. Government
ergy to water supplies, since tical industry to 2020 declares fundraisers have them in their
Expert speak:
ernisation programme is currently being imple-
mented here and a series of new projects have
the infrastructure was not Sammy Kotwani, founder of the aim of getting foreign phar- sights. been launched. The biggest one is for creating
ready for the sharp rise dur- Imperial Tailoring, has worked maceutical companies to set “What scale of investment
ing 2003-2008,” notes Tabach- up production in Russia, notes will you bring to the market?”
cope with hope
a technologically advanced and sustainable
in Russia for 14 years. This silicon carbide production facility by 2010/11.
nikov. Neither should we for- is the second time he’s lived Vladimir Melnikov of com- That’s how the conversation The design capacity of the new production line
get the tax reduction on prof- through a crisis, but he’s got munications holding compa- starts with any foreign inves- will be 100,000 metric tonnes of silicon carbide
its in Russia from 24 to 20 pc. no intention of leaving. The ny MMD Central & East. tor, confi rms a ministry source. a year. In the wake of the economic crisis in
Companies already manufac- first time, in 1998, business He advises a more careful The bigger the volume of in-
ALEXEI MAKARKIN
And what's the situation in Europe, as well as rising gas/electricity prices,
turing products on Russian didn’t suffer because there study of the market. While the vestments, tax deductions CENTRE FOR POLITICAL TECHNOLOGIES non-strategic industries? there are no silicon carbide production facilities
territory or planning to start was room to manoeuvre. This consumer credit sector has and jobs created, the more Small and medium business left. So there will be plenty of customers for this.”
in the near future may also time his volume of produc- practically died, small loans persuasive the argument. The major question hovering is a different matter. Here the ITAR-TASS
benefit from the postpone- tion has dropped by 10pc in are fl ourishing. The British fi - When opening the Nissan car over our heads is, is the crisis agreement of the federal au-
ment of Russia’s WTO entry. Russia, 30pc in Ukraine and nancial corporation Interna- factory outside St Petersburg changing the Russian author- thorities, if required, is at the
This enables Russia to pre- stayed at its previous level tional Personal Finance, at the beginning of June, ities’ attitude to foreign inves- level of the relevant ministry.
Russia to take part in Indian diesel
serve its freedom of move- in Kazakhstan. But the busi- which entered the Russian where more than $200 mn has tors? The progress may be- The main thing is to win the
ment regarding import tariffs, nessman is full of optimism. market last spring, has man- been invested, Prime Minister come obvious in 2010, when it support of the regional ad-
submarine tender
giving an advantage to do- “The Russian authorities are aged to take advantage and Putin promised support for will be seen that internal re- ministration. That’s not too "We will offer India an export version of the
mestic producers. It’s also more down to earth,” he says. get established. Also, Home such investment. serves are not enough to over- difficult to do, bearing in Lada class diesel submarine - the Amur class
worth adding the conditions “They’re not just interested in Credit and Finance Bank, Discussions must be as spe- come the crisis. The ideology mind that the local authori- vessel. We will take part in the Indian tender
of relative budgetary stability, money: they want to see re- which is part of the Home cifi c as possible, with a busi- that now operates all over the ties are interested in getting when it is announced with these submarines
in so far as in recent years, the sults. This started before the Credit Group, showed a net ness plan and explanation of world is that the weak make investment, especially dur- or vessels of another class," said Oleg Azizov,
problem of excessive pressure crisis, but it’s especially topi- profit of 229 mn roubles for how projects are useful to the way for the strong. If the ing a crisis. Compared with head of Rosoboronexport's delegation at the
of external debt on the feder- cal now. The president is not the fi rst quarter of 2009. Russian economy, says Magna consortium and Sber- the beginning of the 1990s, International Maritime Defense Show 2009
al budget has been addressed. just talking up his concern Mikhail Dvorkovich, chair- bank buy Opel, the only ques- the situation here has be- in St. Petersburg. The Project-677, or Lada
In order to stimulate growth, for small and medium busi- Investments have man of the board of the Press tions the German government come much more predicta- class, diesel submarine, whose export version
the government will have to ness: the situation here is re- intrinsic value Hall communications group asks are economic in nature. ble. is known as the Amur 1650, features a new
increase spending, but most ally changing for the better. Despite the crisis, investment and brother of the Russian In Russia, the authorities are In the overwhelming major- anti-sonar coating for its hull, an extended
of this will come from the fed- Anti-monopoly authorities are co-operation is not stopping. president’s economic adviser still trying to preserve the sta- ity of regions, the situation is cruising range, and advanced anti-ship and
eral Reserve Fund rather than working well. Since the cri- At the beginning of this year, Arkady Dvorkovich. Which tus quo in strategic industries. now controlled by the gover- anti-submarine weaponry, including the Club-
an avalanche of borrowing. sis started, for example, rents China agreed to lend the Rus- country the capital comes It’s no accident that one of the nors, not by the criminal S integrated cruise missile systems. "Vietnam
Tabachnikov is certain this have come down, which is sian oil companies Rosneft from is not important; invest- first anti-crisis measures class. The only problem is is still studying various possibilities for the
“cushion” will be enough for good for business.” and Transneft $25 bn in ex- ments have intrinsic value, es- taken was to refi nance foreign with the new system where- development of it. If they choose Project 636
one or two years. change for construction of an pecially in a crisis. If the corporate debt using the re- by heads of regions are ap- submarines, offered by Russia, we will start
In parallel, the expert consid- oil pipeline and oil supplies American company Motorola sources of the state banks. The pointed by the president: it’s talks," the official said, adding that the same
ers the government will have for 20 years. The Indian com- intends to expand its presence system of informal agreement difficult to predict how long approach applied to Egypt. The Project 636
to force through reforms to path of development, within pany Labindia Consultants in Russia, it makes no differ- allowing foreigners to move they’ll stay in power. They Kilo class submarine is thought to be one of
correct the lopsided Russian 15-20 years, Russia will be in Pvt. Ltd will evaluate archi- ence to Moscow what position into our strategic industries – can be fi red at any moment, the most silent submarine classes. RIA Novosti
economy. This is exactly what the top ten world economies. tectural solutions and con- Washington took during the oil, metals, motor vehicles – but on the other hand one
investors are waiting for. In As for state management, the struction technologies used in Georgia-Ossetia confl ict. was set up before the crisis, can be sure that the new per-
the short term, Russian crisis has already brought the Novaya Anapa special It is by no means obligatory to and it hasn’t changed much son will also be pragmatic
growth depends on world substantial adjustments to tourism and recreation eco- involve federal authorities, as since. and predictable.
Russia steel exports to India rise
growth (mainly the restora- dialogue between civil serv- nomic zone, as well as attract regional level is often much For example, the deal to allow The ones that are geared to-
in May
tion of US growth and the rise ants and entrepreneurs. Civil investors. Approximate more appropriate. One exam- Conoco-Phillips to buy a wards trade and consumer According to the Customs statistic data, Russian
in domestic consumption in servants are becoming more project cost is 1.5 bn euros. ple is the June opening of a $1 share in LUKOIL was pre- goods are industries, in my rolled steel shipments to India in May 2009 grew
China), but in the long term, it sensitive with international This is not a geopolitical turn bn credit line by China for the ceded by a meeting between view attractive for invest- by 6.1 pc as compared to April 2009 to 95,800
must rely on steady domestic investors. The snobbery of the by Russia towards Asia – it’s Sverdlovsk Region. If meeting the head of the American ment. For example, the food tonnes.
development. “rich years”, which stemmed simply a change in the type of senior officials is required, it company and the Russian and footwear industries. We At the same time, flat steel shipments grew by
Tabachnikov is sure the coun- from high oil prices and the investor, says a Russian civil doesn’t have to be in the Krem- president. As a result, Conoco eat and wear shoes, regard- 1.3 times, to 65,500 tonnes, semis shipments
try’s leadership understands big Reserve Fund, is a thing of servant who wished to remain lin or the White House, notes acquired quite a large stake in less of the economic situa- grew by 27.3 pc to 55,000 tonnes. But section
these challenges and, if it suc- the past. The wary attitude to- anonymous. Representatives Dvorkovich. As a rule, there is LUKOIL, but the Russian tion. A restructuring of the steel shipments decreased in report period by
ceeds in carrying out reforms wards foreigners has not dis- of the “golden billion” – much more opportunity for side kept control of the cash market is possible here, and more than 4 times to 4,300 tonnes.
to increase efficiency of state appeared, but it is fading. Civil wealthy people from devel- discussion at investment fo- fl ow. In other words, security the new draft law on trade Totally, in 5 months of the current year, export
management and switch the servants are even showing a oped countries – are now rums. And it’s a lot simpler to is the highest priority here, as takes retail interests into ac- volumes to India increased by 2.25 times, to
economy to an innovative demand for new ideas. dreaming of investments. The organise such meetings.
-
before. count.
-
316,280 tonnes YoY. Minprom
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www.aviasalon.com/en senger motor vehicles, trucks, lorries and buses, car care September 15-18, Mikhailovsky Manege,
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business
AgroRus – 2009 International Exhibition and Fair business programme features conferences, congresses, By the end of the 20th century, Russia’s available onshore
August 21-30, Lenexpo Fairgrounds, seminars, master classes and other events. oil and gas resources had been almost depleted. With
St Petersburg eng.interauto-expo.ru most oil and gas activity now focused on the resources of
calendar
This exhibition will feature agricultural and farm production the continental shelf – 85pc of which is located in the Arc-
techniques, processing equipment, technology, implements, Understanding Russian Media tic sector – this conference, first held in St Petersburg in
and planting materials. Over the last 17 years, the fair has September, London, UK 1993, will feature the participation of experts in the fields
become something of a tradition, combining a business Like many aspects of Russia seen through Western eyes, of geology, field exploration, oil and gas field develop-
The International Aviation and Space Salon (MAKS) programme with expositions on the long-term development the real nature of the country’s media is often misunder- ment, and environmental protection, along with politicians
August 18-23, Zhukovsky, Moscow of agriculture in Russia, and the food and processing in- stood. The world of Russian newspapers, radio, television and journalists. Leading companies in the oil and gas sec-
MAKS is primarily a display of recent advances and de- dustry in St Petersburg and the north west. and new media is far richer and more complex than many tor and manufacturers of equipment and vessels for off-
velopment trends in Russian science and technology in agrorus.lenexpo.ru/ru/en-2009 outsiders realise. This one-day conference offers delegates shore development will also be in attendance.
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turers will take the opportunity to unveil their latest proto- August 26-30, Crocus Expo IEC, Moscow fast-changing Russian media landscape. There are several
types and show off their engineering and design achieve- InterAuto-2009 is the largest event for the Russian automo- formats, including special interactive presentations.
Find more in the “Global Calendar”
ments, making the International Aviation and Space Salon tive market, offering the perfect platform to preview new www.eventica.co.uk at www.rbth.ru
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