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Press Release on Forum highlights. The Russia Forum 2010: internalize the lessons, heed the risks and return to prosperity

February 5, 2010

The beginning of 2010 marked a new phase in the world economy: following last year’s percipient drop, world markets are gradually returning to positive growth. And Russia is no exception – hope for the economy is resurgent, as investors and government officials forecast that pre-crisis figures are reachable in the next two years. At the same time, participants and delegates at The Russia Forum 2010, organized by Troika Dialog, unanimously agreed that Russia and the world community have a ways to go before a full ‘recovery’ is achieved. The task right now is to internalize the lessons, heed the risks, and prevent such cataclysms from happening again.

Troika Dialog’s The Russia Forum 2010, in its third consecutive year, is an annual gathering of leading investors from around the world, financiers, economists, politicians and businessmen. Approximately two thousand participants and delegates from 63 countries enthusiastically participated in 25 panel discussions and sessions covering the most acute questions regarding the post-crisis world model, as well as the opportunities appearing thanks to the new economic paradigm. The Forum also served as an effective platform for meetings between companies and investors in ‘one-on-one’ format. Over 350 representatives of leading foreign and Russian media provided breaking coverage on the event.

Among the leading speakers at the Forum were First Deputy Prime Minister of the Russian Federation Government Igor Shuvalov and Deputy Prime Minister-Minister of Finances of the Russian Federation Aleksei Kudrin, whose presentations on the current and future state of affairs in the Russian economy and society and Russia’s role in the world elicited genuine interest among Forum participants and the press. Aleksei Kudrin remarked that Russia’s economy will likely see positive growth this year, highlighting the government’s efforts to strengthen the ruble, fight corruption, optimize taxes and increase the role of innovations in economic output. All this, in turn, should lead to the gradual improvement of the country’s image and growth in trust and economic stability. Igor Shuvalov, speaking during the discussion panel on Russia’s investment climate, emphasized the need to modernize the economy and society, allocating a leading role to the ‘human factor.’ According to the First Deputy Prime Minister, it would be entirely feasible by 2020 to build a new and modern Russia with a vastly improved standard of living, although this will require the joint efforts of politicians, economists, businessmen, government officials, and, of no small importance, ordinary citizens. “Modernization begins with oneself,” Mr. Shuvalov stressed.

For the overall world economy, and Russia’s economy in particular, the end of the crisis has brought about new risks as well as new challenges. The crisis presents new development opportunities that should be used competently. The world economy and the outlook for global companies under the post-crisis economic paradigm were recurrent topics at The Russia Forum 2010. According to George Cooper, Principal Partner at Alignment Investors, the global drop is nearing its end, but recovery will take time and the world faces a lengthy and challenging period of ‘healthy recession’ before it can claim any substantial economic, geopolitical and social benefits. Edmund Phelps, recipient of the Nobel Prize in Economics, believes that the global economy has good prospects to emerge from the turbulence ‘new and improved and able to restore positive growth and prosperity.”

The fate of the dollar, euro and other reserve currencies formed another part of the Forum agenda. According to Nouriel Roubini, Professor at New York University’s Stern School of Business, no other currency right now offers a viable alternative to the dollar in the world financial architecture. Neither the euro, nor the sterling pound, nor the yen satisfies the necessary requirements. However, Edmund Phelps suggested that gold could substitute for the American currency.

The global financial crisis changed the situation in the banking sector at its root, shook the foundations of equity markets, and literally put debt markets in a ‘supine position.’ Forum participants concentrated on the crisis aftermath in various economic sectors, discussing possible development scenarios in the sphere of finances and potential risks. Of particular interest was the discussion regarding the prospects for emerging market countries, including the ‘locomotives’ China, India and Brazil, for whom the paramount task is to heed the mistakes of the developed countries and learn to manage risks so as to prevent the formation of analogous ‘soap bubbles.’

That over 170 speakers – federal officials, CEOs of the largest Russian and international companies, renowned experts, scholars and leading representatives of the investment community – attended the Forum and showed genuine interest in its discussions proves that business is an increasingly important topic in Russia. The consumer market, automotive industry, banking and financial sectors, energy and telecommunications are all attracting potential investors prepared to contribute to developing Russia’s economy. The numerous industry-based panel discussions showed that many investors fully appreciate the opportunities existing in Russia, and are ready to act on them. However, capital inflows into Russia could increase substantially if steps are taken to improve the country’s investment climate. The Russia Forum 2010, like other high-caliber events, seeks to set the conditions for just these improvements. Creating contacts between government and business, investors and companies, society and the media, and enhancing relationships between them, are significant steps in these global tasks.


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