A new course for national economy

In the past few years, the world has seen a surge in the spread of megaprojects - projects whose worth exceeds $1bn, based on public-private partnerships. Russia is implementing more than 120 such projects, with total investment exceeding $600bn (45pc of the country's GDP).

These projects include major investment programmes for regional development, such as the comprehensive development of South Yakutia (industrial Urals/polar Urals), building a metallurgy complex in the Amur Region and others.

Most (62pc) involve Siberia and Russia's Far East. In European Russia, the Leningrad Region stands out with $35.7bn worth of investment projects, taking advantage of being the main gateway to Europe.

A look at the distribution of megaprojects across industrial sectors confirms the dominant role of mineral extraction and primary processing in shaping Russia's economy. In the medium term, the bulk of investments will go to all basic industrial sectors - oil and gas processing (40pc), power generation, ferrous metallurgy and pipelines.

Plans for the future certainly include a transition period, when industrial infrastructure will be built for innovation-based operations and services; but that will only be possible after completing the primary infrastructure still lacking in Russia.

Despite the favourable situation in international markets, project implementation on this grand scale is fraught with risks.

These include difficulties in managing large projects that require the cooperation of many participants and proper coordination between companies and governmental bodies. Plus there are personnel shortages and environmental and demographical issues. These risks impose tight limits on evaluating each project's prospects, with due consideration for environmental and social factors of the regions' development.

The Yakutsk Economic Forum, Russian Megaprojects 2008, to be held September 5-7, will focus on these problems in an attempt to work out some solutions.

As Minister of Economic Development of the Yakutsk Region Alexei Struchkov said, Russia is highly attractive as an investment destination. This is evident even to those distrustful of the latest economic trends.

This forum is one of the places where federal and regional executives, experts, and heads of major Russian and foreign companies can openly discuss all the principles, problems, and prospects of new and bold moves in Russia's economic future.

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