Vnesheconombank Chairman Vladimir Dmitriev’s Interview to Vesti-24 (Davos, World Economic Forum)

TV Channel Vesti-24
VESTI/NOW
23.01.2008,21:05
Host Oleg Obukhov

HOST: The event of the day: The World Economic Forum opened in Davos today. My colleague Ekaterina Grinchevsky is joining us live in our studio from Davos, good evening, Katya

CORR: Good evening, Oleg

HOST: The day is almost over. What issues did the delegates discuss?

CORR: You are right. The first day of the World Economic Forum in Davos is coming to an end. The day was very busy. At the moment, the Forum opening ceremony is taking place at the Congress Hall. Forum Chairman Schwarz Klapp opened the ceremony and you watched it.  What were the most important issues discussed in Davos today? They were the world financial crisis, emerging markets and their role in the world economy, as well as potential global risks to the world economy. 2 thousand and 500 delegates are here at the Davos Forum but it looks like that security guards and policemen outnumber them.

So, heads of states, ministers and top managers of major leading world companies are in attendance at the Forum. Russia’s Bank for Development Chairman Vladimir Dmitriev is here with me. Good evening, Vladimir Alexandrovich. Could you tell us what brings you here and in what discussions you are going to participate?

Vladimir DMITRIEV, Bank for Development Chairman: My colleagues and I for one often attend the Davos Forum as guests and participants. Our delegation has come to this unique Forum to see firsthand what the world economic community is concerned about and what social and political issues are of pressing concern to politicians, business and the banking community. That is why we are, above all, interested in discussing the current situation on world stock markets; the stock market crash, the situation resulted from a sharp decrease in the Federal Reserve System’s discount rates and possibilities of raising investments for our economy among other things in the context of our Bank’s activity as the main financial development institution in our country.

CORR:  The world financial crisis is one of the main themes being discussed at the Forum. Russia is also in the spotlight. What in your opinion Russia is supposed to do to address the world financial crisis?

Vladimir DMITRIEV: Russia is again attracting close attention of the Forum’s participants and the world economic community as a whole, given the fact that our country’s economy is still well protected from the powerful impact of negative developments that, say, in the past half year or more have been sending shock waves, above all, through the United States and Western Europe. But this does not mean that our economic, financial and humanitarian authorities should not follow the events in the world around us and take adequate steps. In my opinion, we should pay close attention to the events taking place in the outside world and discuss them extensively with foreign investors and businessmen to prevent the repeat of the 1998 situation when a huge amount of foreign investments that had worked efficiently in Russia were moved out of Russia overnight and we are well aware of the consequences and fear a repeat of the crisis. I am sure that our country is in a position to respond adequately to what is happening in the outside world. And the most important thing is that we have created favorable conditions for channelling both Russian and foreign investments to the real sector of our economy to build infrastructure, large factories and production facilities involved, above all, in deep processing of products, manufacturing of export-oriented products, that is, in what we call economic restructuring.

HOST: This year, the Forum is taking place at a time of a very unfavorable situation on the world financial market. Analysts say that it’s the worst crisis to hit stock markets in the last half century. How do you size up the situation in world and domestic markets?

Vladimir DMITRIEV: Factually, the situation is quite complicated. I wouldn’t like to compare it with the situation 50 years ago. The fluctuating market and crisis situations in foreign countries’ economies make us think hard about the way our economy, financial and stock markets should develop. Russia is a part of the world and there is no doubt that everything that is happening outside our country influences the situation in Russia. Fortunately, as far as the banking sector and the situation in the Russian banks are concerned, it is safe to say that we were able to prevent those negative, crisis developments that shook major foreign countries. We were not witness to major economic upheavals, drastically reduced profits and massive losses in the Russian banking system.

CORR: We can say with reasonable confidence that the problems in the world financial sector did not affect Russia’s financial sector?

Vladimir DMITRIEV: I wouldn’t like to be that confident.  I think that we are coping rather well with the situation on foreign markets, which shocked foreign banking system. But we live in the global world and depend a lot on the situation on stock markets and the situation in the banking system in other countries as our banks are solid borrowers on foreign capital markets, Russian companies’ shares are trading actively on foreign stock markets. We can’t help taking all this into consideration and can’t help responding adequately to what is happening in the outside world.

CORR: Has the Bank for Development felt the impact of the financial world market crisis?

Vladimir DMITRIEV: No, fortunately, we haven’t been affected very much. First, we are not active borrowers on international capital markets and the credits we took on international banking capital markets will not reach maturity soon. We hedge our currency risks and that is why we found ourselves in a pretty favorable situation, given the fact that at the end of the last year our capital was increased by 180 billion rubles and these funds including those that proved to be free were placed on the interbank market, and were highly instrumental in stabilizing the situation as a whole on the Russian interbank lending market.

CORR: How the world financial crisis can impact the investment climate in Russia? And what is the Bank’s strategy of investing the funds at the Bank for Development’s disposal?

Vladimir DMITRIEV: I believe that the situation in Russia has been so far predictable and as far as the impact of outside factors is concerned, as I have already mentioned, we can’t help neglecting them, but the current situation is under our control. As to our own funds, we plan to invest them primarily in the real sector of the Russian economy.

CORR: Vladimir Alexandrovich, thank you for finding time to answer our question. I wish you would have interesting discussions. Oleg?

HOST: Thank you, Katya, we are looking forward to getting news from you. Ekaterina Grinchevsky from Davos. We are following the latest developments, stay with us.