The President of Russia noted that during its existence the RDIF has achieved substantial results, among them, attracting over 760 billion rubles to the Russian economy.
The President said the state plans to top up the RDIF capital with additional funds received from the sale of public companies’ stock.
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President of Russia Vladimir Putin: Ladies and gentlemen, friends,
I would like to welcome you once again in St Petersburg.
Heads of the leading world investment and sovereign funds from Europe, the United States, Asia and the Middle East have gathered here.
Our meetings on the sidelines of the St Petersburg International Economic Forum have already become a good tradition. I would like to exchange opinions with you on the broadest possible range of issues and discuss the opportunities opening up in Russia for making profitable investments and attracting capital.
Naturally, those who plan to invest in Russia or are already doing this will be interested in hearing our own assessments of our economic situation. I would like to say just a few words about this now.
We are essentially out of recession, and we have created the basic conditions for setting our economy on a growth trajectory. We have ensured macroeconomic stability and substantially reduced inflation. The actions of the Bank of Russia have allowed us to keep gold and currency reserves at high level. As you know, we have one of the lowest debt-to-GDP ratios.
Our economy has adapted to the new conditions. Moreover, it has gained competitive advantages by introducing a flexible rate for the national currency. Despite certain difficulties that definitely remain, we have not restricted capital flow. I would like to emphasise that we are not going to do this in the future. The Russian financial market is the most open among developing markets.
And, incidentally, our stock market – one of just a handful in the world – notably improved in the past year and the first five months of this year. Trading on the stock exchange has grown considerably in some categories of assets. Importantly, the scope of participation by foreign investors is broadening.
Good investment opportunities are opening up in various economic sectors: in industry, agriculture and infrastructure. Production with high added value, above all, has significant potential for growth.
For example, over the past three years, the capitalisation of some Russian chemical and instrument-making companies has grown at a rate of 30–40 percent and more.
Under import substitution programmes, we are setting up viable enterprises in Russia, capable of competing on foreign markets. To make them more efficient, we intend to implement far-reaching technological modernisation projects. Naturally, we are interested in modern technology coming into the country, along with capital. This process, of course, should be mutually beneficial, so we are offering attractive instruments.
One of them is a special investment contract. Under this contract, investors assume the obligation to raise the technological level, localise production in Russia and increase the share of exported goods. In exchange, they receive long-term guarantees, exemptions and other preferences.
We also see good investment opportunities in the so-called new markets, which ensure the dynamic development of advanced technology. Here, we have serious work in progress and can implement joint projects that are of interest to all.
Last year, the Russian Direct Investment Fund (RDIF) accounted for almost 40 percent of foreign direct investment in the Russian economy. I would like to recall that we announced the creation of the RDIF five years ago here in St Petersburg. During this time the Fund has achieved significant results, including over 760 billion rubles invested in the Russian economy and the establishment of long-term partnerships with investors, many of whom had never invested in Russia before. Importantly, RDIF investment invariably shows high return rates, on average 30 percent, while projects that the Fund invests in show good dynamics.
I know that many of those present in this hall are successfully implementing their projects and cooperating with the RDIF. For example, 17 deals have been concluded with the UAE Sovereign Wealth Fund. Our Saudi Arabian colleagues have provided $10 billion for projects in Russia. Kuwait’s sovereign fund, which invariably participates in each RDIF deal, has doubled the volume of resources within the framework of this cooperation. This is, without a doubt, a clear indication of the great trust in the Fund and in Russia as a whole.
We have launched a number of landmark projects with RDIF’s partners. For example, RDIF joint investments with its Middle Eastern partners in the Russian Helicopters Holding will enhance our companies’ presence in international markets. I would like to note the Fund’s participation in import substitution programmes. For instance, RDIF and its Thai partners have invested together in a poultry farm cluster in the Leningrad Region, which we are visiting now. There are plans to build the largest dairy combine in Russia in another region, which will require a billion dollars in investment. These agro-industrial projects exemplify the advanced knowhow and technology that capital brings to Russia.
I would like to announce that a recently endorsed law gives the Russian Direct Investment Fund the status of Russia’s sovereign fund, which will improve the quality of its work, expand the set of its working instruments, and increase its independence to enhance the Fund’s stability. I am confident that it will generate interest in cooperation with Russia and investment in Russian assets. I would also like to note that we intend to increase RDIF’s capitalisation with extra funds obtained from selling shares of state-run companies.
We talked today with Russian Government members, the Minister of Economic Development among them. The Government supports this idea, and we will see which specific assets will bring in the extra revenues. The Finance Ministry need not exert itself: it is clear that the bulk of the profit should go toward budget revenue as the Budget Law stipulates. However, if we get some extra money, again, it will be used to increase the Fund’s capitalisation.
I hope that we will have a candid discussion today, as in past years, about all your concerns. It is sure to benefit our cooperation and increase your interest in working with us.