For the seventh year in a row, in the chill of a Moscow autumn, the staff of the Russo-British Chamber of Commerce (RBCC) hosted RussiaTALK, the leading forum in Russia for those interested in doing business between the UK and Russia. We chose as our themes this year the “Four I’s” as enunciated a while ago by the Russian president, Dmitry Medvedev, as being key to the country’s development: Investment; Innovation; Infrastructure and Institutions.
Investment into the Russian economy remains strong, despite problems such as increased capital flight from Russia this year. And it is not just foreign money coming in. As the Moscow stock exchange, Micex, can demonstrate, Russian investment continues to flow into Russian companies. Whether this investment is always wisely utilised is another matter. But at a time when the eurozone is in crisis, Russia still looks a pretty safe bet for investors.
Innovation presents more challenges. Many Russian entrepreneurs continue to struggle with bureaucracy and enterprise, and new ideas do not get the support they deserve from central government. Innovation is the lifeblood of small and medium-sized enterprises (SMEs), the backbone of any developed economy. Some 90pc of companies in the UK are SMEs; in Russia it’s 20pc. If Russia is to end its long dependency on natural resources it has to encourage innovation and SMEs.
Mr Medvedev has made infrastructure one of his key themes. The awarding of the 2018 World Cup to Russia has highlighted the need for new infrastructure, including modern stadiums and the transport links between them, tourist facilities and new housing.
Anyone who has flown into a provincial Russian airport or waited at a railway station will know the transport system leaves much to be desired. But agreements such as the memorandum of understanding to rebuild railway stations, signed between Russian Railways and a group of British companies, shows a determination to bring Russia’s infrastructure into the 21st century.
Institutions is the most difficult of the I’s to pin down. RBCC’s interpretation was to look at organisations such as our own, so the panel was made up of the heads of our French and Canadian counterparts in Moscow, CFIIR and Cerba; the Association of European Business and the Russian Trade Delegation in the UK. In each case, our business is about helping businesses do business, notably across national boundaries. You can never have too many contacts, and these institutions all have wide networks which facilitate this. And with the bureaucracy which sometimes engulfs business in Russia, a helping hand through that maze can be very useful.
But are we “institutions”? As the session’s chairman said: “Marriage is a great institution; but who wants to live in an institution?”
Stephen Dalziel is executive director of the Russo-British Chamber of Commerce.
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