Russian Ministry of Regional Development became co-founder of the Russian Investment Agency “Invest in Russia”
On December 6, 2013, in Moscow Ministry of Regional Development of the Russian Federation jointly with the World Association of Investment Promotion Agencies (WAIPA), the National Council for Investment Climate Development held a roundtable discussion on the establishment of effective mechanisms for attracting investments into the Russian regions. The event was held in the format of discussions among representatives of major international companies and investment promotion agencies from Germany, Switzerland, Mexico, Great Britain, Denmark, France, Singapore, Austria, as well as heads of Russian regional development corporations. The discussion was attended by the Minister of Regional Development, Igor N Slyunyaev, heads of departments of the Ministry, Chairman of the National Council for Investment Climate Development Yury Voicehovsky, CEO of the World Association of Investment Promotion Agencies Carlos Bronzatto, and President of the World Association of Investment Promotion Agencies Ilker Ayci.
Participants discussed current trends and best international practices in the field of investment, creating new tools to attract investment to the Russian regions, coordination of particular Russian regional agencies in their interaction with foreign investment promotion agencies.
In his speech Igor Slyunyaev noted that over the past ten years Russia has gone the way to the market, which the majority of industrialized countries have gone for centuries. These changes are clearly seen by foreign investors and Russian foreign trade partners who admitted that the procedure of registration of ownership, foreign trade and customs procedures had significantly simplified and overall business conditions had been improved.
However, at present, according to the Minister, the amount of foreign investment received by the national economy is not sufficient: in terms of level of GDP Russia is on the 5th place in the world, and in terms of attracting foreign direct investment it takes only 13th (in 2012 domestic economy received $18.7 billion of foreign direct investments). The Minister also noted uneven geography of investments across regions: 10 regions of the Russian Federation accounted for 80 % of all foreign investments (Moscow, Sakhalin Region, Moscow Region, St. Petersburg, Kaluga region, Leningrad region, Chelyabinsk region, Arkhangelsk region, Nizhny Novgorod region and the Republic of Komi).
– The fact that 73 regions of the Russian Federation attracted only 20% of all foreign investment does not suit us at all. Most foreign investors do not yet see the real potential of our regions and sectors of the national economy. Not all regions of Russia have sufficient experience and qualifications in order to work with foreign partners, – said Igor Slyunyaev .
According to the Minister, the efforts of federal agencies, development institutions, regional management teams are not coordinated properly, that is why most investors do not see the true potential of Russian regions.
In order to address these issues at the initiative of Ministry of Regional Development and the National Council for Investment Climate Development under the auspices of the Ministry, the Russian Investment Agency is created, which by way of extra-budgetary funding will:
– Perform the functions of ” one stop shop” for foreign investors;
– Provide potential investors with quick and accurate information about the conditions, procedures and options of investment activity in the regions;
– Coordinate specific development institutions at the regional level;
– Suggest ways to improve the conditions and mechanisms for attracting investments based on the best international and Russian practices and standards.
In order to develop a detailed concept of the Agency the best international and Russian experts in the field of investment were attracted, who took into account the most successful experience of foreign agencies. It is assumed that the Agency will operate under the brand “Invest in Russia”.
– We are not talking about the formation of a new bureaucratic structure, rather we are talking about the creation of favorable conditions for foreign investors in the Russian regions in terms of existing institutions, aimed at attracting investment, – said Igor Slyunyaev .
The Minister has highlighted that it is extremely important that the Agency should interact with international organizations such as the World Association of Investment Promotion Agencies and other foreign institutions in order to attract investments.
– We hope that your experience which was demonstrated in many countries, as well as standards of investment activity and mechanisms for attracting investments will help us through the long-term strategy to generate favorable conditions for mutually beneficial business in Russia, will provide a direct link between foreign investors and Russian regions, – Igor Slyunyaev addressed the representatives of major investment agencies.
The idea of creating the Agency was supported by participants of the discussion panel.
Mr. Carlos Bronzatto noted that the Agency will allow Russian regions to establish bilateral relations with the international investment community and that will not only attract investment, but also help Russian companies to go to the foreign markets.
– The establishment of such an agency on the basis of the Ministry of Regional Development is seen particularly important as the Ministry has the necessary resources, information about the current state, needs and potential of each region. The functions of the Ministry include regulation of social and economic development of the Russian Federation, the implementation of regional investment projects, strategic planning and formation of the territorial plans , – said Yury Voicehovsky.
Roundtable participants agreed that the Agency would strengthen the position of Regional Development as an integral investment center for the development of Russian regions endowed with sufficient authority to make decisions that promote economic growth and improve social well-being, as well as integrate existing administrative, financial and managerial resources and improve the efficiency of their use to create an attractive investment climate in the regions.
Currently the Agency initiated the registration procedure, which according to the founders must be completed before the end of the year so that in 2014 a new structure started to work in full force.
Head of Russian Ministry of Regional Development has placed special emphasis on the nature of the newly non-bureaucratic structure which, in his opinion, is first of all “a tool forming a professional environment and responding to investment inquiries of Russian regions.” However, he stressed that it would not be necessary for the Agency “Invest in Russia” to start all the work from scratch because the work with regions of the Russian Federation is the essence of the activity of the Ministry of Regional Development of the Russian Federation.
In December in the Ministry the Department for non-budgetary investment projects and the Department of International Relations were formed, which will be responsible for the development of interregional and cross-border cooperation and will coordinate the Agency’s work.
– We hope that with the formation of the Russian Investment Agency more companies throw their anchor in a safe harbor of the Russian state. It is time to do business in Russia. Welcome to Russia, – Igor Slyunyaev appealed to international investors.