Vnesheconombank Chairman V.A. Dmitriev’s Interview to the TV Channel Russia 24

TV Channel Russia 24,
INTERVIEW
15.02.2013, 17:45

HOST: The 10^th annual Economic Forum is progressing in Krasnoyarsk. My colleague Irina Matyushenko talked about the Forum’s first results and prospects for the Russian economy with Vnesheconombank Chairman Vladimir Dmitriev.

Interview

CORR.: Here in Krasnoyarsk, the Forum is taking place under the slogan “Russia: A Map of Changes.” What changes does Russia need for its economy to advance energetically and for us to achieve growth rates of 5 percent and accomplish objectives set?

Vladimir DMITRIEV, Vnesheconombank Chairman: In my opinion, changes that Russia needs result from our Government’s plans and their implementation. By implementing them we’ll be able to achieve economic growth targets, increase labor productivity, build infrastructure and make structural changes that we have been talking about for a long time. I’m sure we are implementing these plans pretty dynamically.

CORR: In what economic sectors is Vnesheconombank going to invest in the first place in 2013?

Vladimir DMITRIEV: We’ll continue to fund economic sectors that are of primary importance for us. These are above all sectors related to manufacturing high technology products: power engineering, transport, aviation, automotive industry. We’ll commit significant financial resources to fund infrastructure, we’ll go on financing Olympic projects, the more so because there is less than one year left before the Sochi Olympics and we’ll go on funding small and medium-sized enterprises. And taking into account successful activities of our subsidiary institutions namely the Export Credit Agency of Russia, the Russian Direct Investment Fund we’ll give high priority to raising foreign investments, creating a positive investment image of Russia and promoting Russian exports.

CORR.: You’ve mentioned infrastructure. Dmitry Medvedev said at the Forum today that one of the most important objectives was to develop infrastructure including transport infrastructure. Ambitious targets have been set. For example, freight transportations are to be increased by 40 percent and passenger transportations - by 1.8 times in five years’ time. These are very serious ambitious tasks. Are they realistic? Will there be enough money for this?

Vladimir DMITRIEV: If you mean budget, we are not likely to have enough money but we should withdraw from this old paradigm and look for extra budgetary financing sources.

CORR.: You mean private investments?

Vladimir DMITRIEV: Private investments. But private investments will be channeled to infrastructure only in the case that we determine and enact rights and liabilities of participants in this process, that is, the state, private investors and financing institutions. Here we have a lot of examples: concession agreements on the construction of toll motorway Moscow Saint-Petersburg, the North-Western High Speed Diameter, the Odintsovo Bypass. We have done a lot in this respect and if we move ahead in this direction everything is sure to work out well.

CORR.: In 2014, VEB’s authority to manage pension funds of the so-called “undecideds” expires. And lately there’s been much talk about the need to withdraw this authority from Vnesheconombank.  What do you think should be done?

Vladimir DMITRIEV: I think we are performing our functions pretty well. Last year, Vnesheconombank produced the best results in managing the funded portion of pension funds. We believe that the first infrastructure bonds funded through pension savings funds will be launched this year. The amount of these bonds might reach 200-300 billion rubles. We have already invested about 100 billion rubles in corporate bonds of highly reliable issuers. So, we are performing this function pretty well. If a new institution comes into being and if this institution is capable of managing pension funds and using them for the needs of real sectors of the Russian economy as efficiently as our Bank, we’ll share all our experience with this new institution. But I think here we have a case when the best is the enemy of the good.

CORR.: There’s a lot of talk at the Forum about the need to improve Russia’s investment climate and investment image. You’re a member of the working group on improving investment climate in Russia. But even here at the Forum foreign participants admit that Russia’s image is negative rather than positive. What should we do in this situation?

Vladimir DMITRIEV: I think that in this situation we must work as hard as the leadership of the Kaluga region, Tatarstan and a number of other Russian regions do. They do not hire foreign consultants but they are open for foreign investments. Having created an attractive investment climate in these regions they demonstrate that they can raise both foreign and Russian investments. So, the most important thing is to work hard. Investors won’t come to a region where its leaders are not interested in engaging foreign investors and do not know how to do it. The example I have given shows that regional leaders are involved in creating an attractive investment climate. Regional leaders know foreign languages, do appropriate training courses, work with investors on a regular basis and their mobile phone numbers are available to all who want to invest in their regions. This is the way we should work with investors. And in this respect, both Vnesheconombank and its subsidiary companies are ready to provide support for those regions which need it.

CORR.: There is a lot of talk at the Forum about the so-called “green economy.” A case in point is the situation in the Baikal pulp-and-paper mill. Vnesheconombank became a controlling creditor by buying out debts from Alfa-Bank. By the way, the Greens and ecologists say that the mill should be closed down as soon as possible because it’s very harmful for environment. Are you going to close it down?

Vladimir DMITRIEV: I think that regional authorities, specialists and federal authorities tend to believe that the life pattern of this mono-city should be radically changed and the mill should be closed. There are no technologies in the world that would ensure closed production cycle without harming environment. We are not talking about closing down the mill immediately because the mill is equipped with slime ponds and treatment facilities. So, we should invest significant funds to close down the mill and realign this zone without harming environment.

CORR.: Are you going to invest?

Vladimir DMITRIEV: Realignment must aim to maximally use Baikal’s cleanest water and the region’s favorable ecological situation. And one of potential projects is to create a tourist-recreational zone and bottle and sell Baikal’s water adding to it appropriate minerals. We should make this area attractive for foreigners through creating a tourist-recreational special zone. So, there are many plans. And we are ready to invest in these projects relying on the state’s support because this line of activity is one of our priorities.

CORR.: Thank you very much for your interview Vladimir Alexandrovich.

Vladimir DMITRIEV: Thank you.