Bankovskoye obozreniye, June 23, 2005

The 11th international conference "Russian and Ukrainian Business under New Conditions: Risks and Prospects" took place in Gstaad, Switzerland, on March 20-23. Strange as it may seem, foreign businessmen are satisfied with the rules of the game more than their Russian colleagues and are ready to invest in the Russian economy.

The RBC conference has turned out to be an amazing one: for the first times its participants were talking about two countries - Russia and Ukraine. "The recent political events in Ukraine have been dominating the thoughts of the Russian business elite," RBC General Director Yury Rovensky said, elaborating on this novelty. "Russian business is one of the largest investors in the republic's economy." About two hundred representatives of the Russian and foreign business elite decided to bring duty and pleasure together, to discuss the latest trends in the Russian economy, to hold talks in the sidelines of the conference, and to take a break at a mountain resort. YUKOS chairman Viktor Gerashchenko, Ukrainian presidential advisor Boris Nemtsov, deputy general director of RusAl-Management Alexander Livshits and other prominent figures were among them.

The majority of the conference's participants were critical of the Russian government's economic strategy. As head of the Globalization Studies Institute Mikhail Delyagin said, the main target of the reforms implemented within the past 15 years has been to lift control on bureaucracy and free bureaucrats from being accountable to the public. YUKOS chairman Viktor Gerashchenko complained that Russia was becoming less and less manageable. Alexander Livshits put forward his demands to the government: "We are only asking for what our rivals have already got from their governments".

There were those who pointed out positive changes in the economy, such as the development of investment funds. State Duma deputy Vladimir Tarachev commented that "we should not cry over the results of the past". The number of investment funds has doubled; their overall assets totaled USD4bn (6 percent of individuals' deposits placed with banks). According to Tarachev, construction is one of the most attractive industries in Russia. "Well, it was," managing director at Rosstroy construction corporation Roman Miroshnikov argued. "A law on minority participation in construction becomes effective starting April 1, and this law destroys investments in the construction industry as no more investors exist for the law." Developers believe that this legal "redistribution" will result in housing prices in Moscow jumping by 30 percent as soon as this spring.

According to data submitted at the conference by the Economic Development and Trade Ministry and the Consultative Council for Foreign Investment, foreigners have more faith in Russia than Russians. A survey of foreign top managers shows that the majority of investors (80 percent) consider their business in Russia to have been a success over the past two years. More than half of those polled (52 percent) believe that the investment climate will improve in Russia. 70 percent of investors say they have enough information to make prudent decisions on investing in Russia.

Famous Russian singer Anita Tsoy, who was present at the conference, was so impressed and affected by these comments that she could not help singing the new national anthem of the Russian Federation at a party to mark the closing of the business forum.