The Congress is dedicated to a review of the activities of the Chamber of Commerce and Industry during the past five years, development of small and medium-sized business in the regions, Russian companies’ entry into foreign markets and ways of attracting investment.
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President of Russia Vladimir Putin: Good afternoon, colleagues.
I would like to begin by thanking you for your invitation to take part in this Congress of the Chamber of Commerce and Industry – one of the largest business unions with many years of history and traditions.
The Chamber of Commerce and Industry represents small, medium-sized and big businesses in practically all branches of the economy: industry, agriculture, trade, banking and services.
This is a truly nationwide association. Chambers of commerce and industry operate in every region and in many cities of this country, totalling 181 chambers nationwide. This is a great resource.
I would like to note that the Chamber of Commerce and Industry is a reliable partner of the state in resolving significant social and economic matters. Here I would like to recall a remarkable man who headed the Chamber of Commerce and Industry of Russia for 10 years – Yevgeny Primakov. For the first time in many years, this Congress is taking place without him.
He was an outstanding scholar, diplomat, state and public figure and a wise politician who placed national interests above everything else and was able to look years ahead. Yevgeny Primakov helped establish partnerships between the business circles of Russia and other countries around the world and he did a great deal to make the Chamber of Commerce and Industry an influential association focussed on improving conditions for doing business.
A key factor of a favourable business climate is a reliable guarantee of the rights, dignity and property of businesspeople and all citizens.
In my Address to the Federal Assembly and at my recent meeting with the judicial community, I spoke in great detail of the need to improve the law enforcement and judicial systems and to abide by legal norms in business.
As you may know, a working group has been set up within the Presidential Executive Office to monitor and analyse law enforcement practices in business. It involves entrepreneurs and representatives of big business associations, including the Chamber of Commerce and Industry. I expect to see our close cooperation in resolving the existing issues and in developing relevant legislative solutions.
Among our important tasks is ensuring absolute trust within the entrepreneurial community for corporate dispute resolution procedures within Russian jurisdiction, creating authoritative mediation courts that use the best international practices in their operations and attracting respectable and professional legal experts.
On September 1, the new Law On Arbitration (Mediation) is to come into effect. It is of major importance to ensure the proper application of all its norms.
I would like to stress that a lot here depends on the business community itself. This includes substantive work of its representatives within the Chamber of Commerce and Industry and its structures, like the Mediation Council.
I would like to note that the Chamber itself has probably the most extensive experience in this sphere in this country. The International Commercial Arbitration Court and the Marine Arbitration Commission have been in operation for 80 years. We should make broader use of these respectable institutions’ potential. They could resolve disputes involving companies with public ownership, as far as the legal terms of the agreements permit, of course.
The history of the Chamber of Commerce and Industry is closely linked to Russia’s industrial and economic rise in the early 20th century. It was then that the first chambers of commerce were set up to help local businesses develop new markets and establish ties with foreign partners.
Today the Chamber of Commerce and Industry plays a major role as an instrument of ‘informal diplomacy’, as a venue for business contacts and for expanding economic cooperation between businesses in various countries. You know all this, so I do not need to go into detail to explain why this is so.
You are well known abroad, there are business councils and bilateral chambers of commerce and industry with a number of states. All this is a good cooperation infrastructure.
It is important to make better use of the existing potential. I would like to ask the Chamber of Commerce and Industry to expand cooperation with its foreign colleagues, with our trade representations and with regional authorities to jointly assist foreign businesses in discovering Russia, in setting up facilities here, and in investing with profit into the Russian economy.
Chambers of commerce and industry should also play a significant role in promoting national goods on foreign markets. This includes assistance to the Russian Export Centre, which presents a broad range of services to our exporting companies on a one-stop basis.
There are many small but very efficient companies with a good export potential operating in the regions. Their goods often exceed similar foreign-made goods in both price and quality. We should be proud that such products are made in Russia.
I can give you many examples, but I will limit myself to just one: there is a company based in St Petersburg that produces security and fire safety systems, and its exports last year amounted to $1 billion. This is not bad at all.
At the same time many entrepreneurs, and this mainly applies to small and medium-sized companies, do not have the necessary information about who to turn to for support when they want to access foreign markets and what they need to do to achieve this. I would like to ask local, regional chambers of commerce and industry to serve as a link between small and medium-sized businesses and the Russian Export Centre.
One more thing. Our businesspeople often do not know which country could have a demand for their goods, how to find customers there, or the specifics of the local legislation concerning foreign trade – or our national legislation either, let alone foreign.
These seem to be minor technical issues. However, if they are not properly worked out, they can hinder progress and prevent companies from reaching a new level of development.
Businesses must learn how to access foreign markets, and everyone should learn this together. I would like to ask the Russian Export Centre, the Chamber of Commerce and Industry and regional chambers to arrange a series of educational programmes in the regions for representatives of small and medium-sized businesses.
Another issue that the business community has raised actively: Russian companies exporting goods other than raw materials should shortly be granted the opportunity to apply simplified and expedited VAT deductions. I would like our deputies to pass the appropriate draft law as quickly as possible. It has already passed its first reading at the State Duma and we need to speed up the process.
We can all see how unstable the global hydrocarbon market is. It is influenced both by fundamental economic factors, primarily a noticeable slump in the world economy, and by speculative elements. All this, including political risks, affects the market.
As a result, over the past year the price of Urals crude oil dropped roughly three times. This is a very significant drop, a significant blow to companies’ revenues. Obviously, the oil companies launched their long-term investment programmes proceeding from a more favourable external market situation. Nevertheless, I would like to note that capital investment into oil production by Russian oil companies in 2015 was 7.8 percent greater than in 2014.
Our task is to retain the stability of Russia’s oil industry, to ensure its consistent development and the implementation of long-term projects. As you may know, the Energy Ministry and its Minister Alexander Novak personally, along with experts are working to resolve issues pertaining to the stabilisation of the world energy market and they regularly consult our partners, leading players on the world oil market. They are discussing measures to ensure market stability, and to balance supply and demand. As the Minister reported, they are negotiating with their partners and have practically reached agreement to the effect that this year we will not increase our production.
According to the Minister, you all agree with this proposal and some even have more radical suggestions, but not all support them. The purpose of our meeting today is for me to hear this from you. Do you really support this proposal made by the Minister? What do you think about it?
To be precise, the proposal is to freeze Russia’s oil production in 2016 at the level of January production. We are talking about an average figure for the entire 2016.
Let us discuss this proposal. I would like to hear your ideas.