State policy in the investment field, the creation of a new international financial centre in Moscow, investments in the development of urban territories, protecting the interests of foreign investors – these and other questions were central to the discussions. The organisers (the capital’s Department of External Economic and International Relations) had a specific aim – to present the key lines of development of investment policy, to talk about the conditions for doing business in various sectors of the economy, and to demonstrate the investment potential of the capital and regions of Russia to foreign businessmen. Undoubtedly, their attention was mainly on the speech by Sergei Sobyanin, the Mayor of Moscow. What interesting propositions does he offer at a time when investment activity throughout the world has declined because of the crisis?
On the results of the forum
Over two days, the plenary sessions and conferences of the forum were attended by about 2,000 delegates. More than 200 business meetings took place where the forum was held, enabling specific plans to be made for steps to attract foreign investments to Russia.
“This forum is only the second one, but it has already gained a certain reputation and attracted great interest from investors all over the world”, the Mayor said at once. “This year, we have about 2,000 attending: representatives of the state authorities, financial corporations, industrial enterprises and small and medium are all at this meeting, and we are ready to do everything possible to make this forum interesting, attractive, and most of all, useful”.
In three years, investments in Moscow have increased by 50%.
Sergei Sobyanin mentioned that the population of Moscow had recently passed the 12 million mark, and it continues to grow by about 100,000 every year. More than 20 million people live in the Greater Moscow conurbation, the biggest of its kind in Europe, which is currently implementing a development programme, the main aim of which is to transform Moscow into a more convenient and modern city. The following figures give some idea of the scale of the transformations taking place. In three years, investments in Moscow have increased by 50%, to 35 billion dollars per annum. Most of this money comes from private investors, both Russian and foreign.
Sergei Sobyanin listed several projects which could be the subject of further private investments. Today, Moscow is carrying out one of the world’s biggest transport system development programmes – the construction of 160 km of underground railway, 240 km of surface railway and 400 km of motor roads. All this requires investment not only from the state, but also from private investors.
“At the same time, we are inviting investors to participate in the construction of the accompanying infrastructure, such as car parks and transport interchanges, which will take up millions of square metres of real estate”, declared Sergei Sobyanin. “We are also inviting investors for the development of the infrastructure for the carriage of passengers. Priority development of the transport system will in turn facilitate the intensive, dynamic growth of all the investment projects in our region”.
Another field for investment is the landscaping of modern public spaces. Every year, new pedestrian zones and parks open in Moscow. These places are a natural attraction for Muscovites, so they are open for investment in culture, public catering and any other business concerned with services for the citizens. As the Mayor of Moscow said, after the reconstruction of districts, putting them in good order, and the creation of pedestrian zones, real estate normally rises in value by 25-40%.
“Investors can participate in the restoration and updating of buildings which are part of our architectural heritage”, said the Mayor. “And this is a new trend, because in previous years there was hardly any investment of this kind. Today it amounts to 30 times as much. Hundreds of fine old buildings are being restored, not only at the state’s expense, but also by private investment. The city now has a special programme of favourable leasing for investors involved in the restoration of buildings important to architecture and history. The restored buildings, which are usually in the historic centre of the city, will become available for opening hotels, cultural institutions, company missions and any other businesses.
In the social sphere, the Moscow administration is interested in improving the quality of education and medical services, so it will welcome the creation in the city of new private kindergartens, schools, medical centres and even full-blown private hospitals.
In the social sphere, the Moscow administration is interested in improving the quality of education and medical services
“We have approved a very wide range of methods of attracting investments to the city – from simple privatisation and leasing of buildings to concession agreements in the field of developing health services”, stressed Sergei Sobyanin. “A highly favourable investment scheme has been created for investments in these institutions”.
Industrial production remains the traditional field for investments in Moscow. Apart from support programmes for small and medium businesses, we are also willing here to consider proposals from major manufacturers interested in direct access to this huge consumer market and needing qualified personnel, who are available in Moscow. This refers to special city concessions in property tax, land leasing and other matters.
As an example, the Mayor of Moscow cited Renault-Nissan, which recently took the decision to make further investments and approximately double the production of cars at its Moscow site. In response, the Moscow authorities granted several special concessions to support this production.
Furthermore, such traditional Moscow fields as the financial sector, office property, trade, housing construction and many others remain open to investors.
“There has been quite a lot of talk about opportunities for investments in these fields being reduced or wound up”, the Mayor admitted. “I must say that this is not strictly true, in fact it is not true at all. The total investment in these fields increases practically every year”.
They are no longer continuing with dense building in the central part of Moscow, there is no more room left there. At the same time, the authorities have opened up new opportunities, to do with landscaping industrial zones and the new territories of Moscow.
Remember that the territory of the Russian capital was recently increased by 150%.
“This means new opportunities for investment”, stressed Sergei Sobyaanin. “Therefore I invite you to join us in implementing the most interesting and most efficient projects in a wide variety of fields, which will interest you, and improve our city”.
Sergei Chremin, the head of the Department of External Economic and International Relations of Moscow, remarked in the course of the forum that Moscow is still the leader of all the Russian regions for attracting foreign investment. “In the first six months of 2013, 62% of all investments in Russia came to Moscow, that’s over 60 billion dollars”, he said. Cheremin also drew attention to positive changes in the structure of foreign investments. “Direct investments have increased several-fold. They came to more than five billion dollars in those six months”, he stressed.
Investments in transport were the main theme of the speech by Marat Khusnullin, Deputy Mayor of Moscow for matters of city-building policy and for building. According to him, about one trillion roubles of Moscow’s investment programme have been allocated to the development of transport. It is intended to build 400 km of roads on the new territories. Marat Khusnullin stressed that the Moscow administration is actively developing transport interchanges, building new metro stations and reducing administrative barriers. “We plan to be among the first five in the world for volume of road construction this year”, the Deputy Mayor declared.
Moscow is still the leader of all the Russian regions for attracting foreign investment
The forum also discussed trends in the development of investment policy in the regions, and the work experience of foreign countries in the administrative divisions of the RF. Representatives of Tver, Tula, Kaluga and Tyumen oblasts, the Republic of Tatarstan and other Russian regions took part in the discussion.
Foreigners also showed much interest in the forum. “Relations between Russia and great Britain have become more dynamic. This year the dialogue between our countries became active at state level as a result of the G-8 summit in Great Britain and the subsequent G-20 summit in St. Petersburg”, said Prince Michael of Kent, the patron of the British Chamber of Trade and Industry, in his welcoming address. He also expressed the hope that the great experience and high level of competence of the management of the Moscow Chamber of Trade and Commerce would lead to more effective economic relations between Great Britain and Russia.
Carlos Bronzatto, Managing Director of the World Association of Investment Promotion Agencies, Jan Simons, Managing Director of the Netherlands Council for Trade Promotion, Arvid Türkner, Director for Regional Development of the European Bank of Reconstruction and Development, Dominique Fache, President of the Sophia Antipolis technology park, Martin Shearer. Managing Director of Otto Group Russia, and Andrew Somers, President of the American Chamber of Commerce, who was featured in one of our recent editions, shared their experience of conducting business in the Russian regions at the forum.