Excerpts from the transcript:
Alexander Ivlev (Ernst & Young’s CIS Managing Partner): The anniversary meeting of the Foreign Investment Advisory Council was held today. In particular, several numbers from a study conducted by the Advisory Council in conjunction with the Ministry of Economic Development were made public. The research studied 95 companies with 53 of them on the Advisory Council.
If you look at the dynamics from 1994, when the Council was established, through 2018, the cumulative investment totals $585 billion. The Council members invested $184 billion. In other words, every third dollar invested in the Russian economy was invested by a FIAC company.
Ninety-one percent of the participants confirmed that Russia is a strategically important market. Asia is the leader in terms of foreign investment growth. Next year, the Asian companies plan to increase their investment in Russia by 41 percent, Europe and the United States by 29 percent.
Moscow and the Moscow Region, Central Russia and northwestern Russia are the regions that interest international businesses the most. The Russian Far East is becoming more attractive for international companies, especially the companies representing the Asian market, as well as the ones involved in mining and subsoil use operations.
Sixty percent of the companies have noted improvements in the investment climate, and 55 percent believe their work on the Russian market makes it possible to create export-oriented production. Overall, 85 percent of international businesses say they can see the Russian market expanding.
Maxim Oreshkin: Many companies have mentioned their plans to implement new projects, both in natural resource extraction and high-tech industries. All of them noted an improvement in the investment climate. Progress observed in the Doing Business rankings is received well by the companies. An independent survey conducted by Ernst & Young confirms this trend.
The predictability of regulation was among the most important topics that came under discussion. They discussed changes in taxes, tax administration and regulation. Here, both the Government and investors hold the same position: predictability of regulation is important, and everyone should work on it in order to make the next step forward.
We discussed increasing labour productivity and agreed that robotics, digitalisation and the use of artificial intelligence taken together can give a serious boost to labour productivity, and leading foreign companies can help promote this positive trend.
The Government noted that the arrival of foreign investors matters not so much because of their money as their expertise, including managerial and technological expertise. So, in all areas, joint work with foreign companies will allow us to achieve the Government’s goals.
With regard to production projects, when it comes to oil and gas, we are primarily speaking about the investment being made by Patrick Pouyanne of Total. He had questions about taxation at the regional level, but judging by the Finance Ministry’s response, these issues will be resolved soon.
There are other projects, such as in gold mining. Kinross Gold, which has been active on our market for 25 years now, plans to increase its investment in new fields. Here again, there is full support from the Government.