Experts Discuss the Possibility of Increasing Investment

5 july 2017

The Analytical Center hosted the Business Forum “Strategic Partnership Between the State and Business: Mechanisms of State Support of Entrepreneurship”. Russian businessmen and representatives of state institutions discussed the interaction of entrepreneurs and the State, as well as the investment potential of the Russian economy.

Yury Urlichich, the Deputy Head of the Analytical Center, moderated the central section “Investment Potential of the Russian Economy”. “The key task of the Analytical Center is to help the Russian economy, including its business segment, in finding those institutions and development tools which will help it moving forward,” the expert said.

Opening the first section of the Forum, Sergey Glazyev, Presidential Advisor to the Russian President, focused on the problems of lending to Russian entrepreneurship and proposed a comprehensive program of economic growth based on small and medium enterprises. “Investment equal to 25 % of GDP is the minimum threshold which provides a basic functioning of the economy. If we want to make a breakthrough with a stable growth course, we need to increase investment. The world experience shows that the only way to do this is to expand domestic credit,” Mr. Glazyev said.

Andrey Sharov, Vice-President of Sberbank PJSC, said that lending to small and medium enterprises in 2017 reached the pre-crisis level, and now it is the time to take out a loan. Moreover, Sberbank aims to create a new wave of entrepreneurs and invests in educational projects. “Education withstands the inflation,” Mr. Sharov said.

Natalia Zolotykh, Vice-President of the All-Russian Public Organization for Small and Medium Enterprises “Opora Rossii"”, discussed the problem of low innovation activity. “Technology companies have little patents and cannot compete outside Russia,” Ms. Zolotykh said.

Olga Alekseeva, Deputy Director of the Department of Competition Policy of the State Company “Avtodor”, paid attention to the issue of access of small and medium enterprises to procurements in state corporations. “Rosavtodor is a unique state company which initiated the introduction of changes to the Government’s resolution to have the possibility to work with suppliers through a partnership program,” Ms. Alekseeva noted.

Continuing the topic, Natalia Medvedeva, Director of the Center for Qualified Order and Anti-Corruption Education of Rosatom Corporation, expressed her belief that transparency of the procurement system is the main condition for attracting investors.

Aleksey Chekunkov, General Director of the Far East and Baikal Region Development Fund, said that the Fund’s money is cheaper than market money, and this is a strong competitive advantage, the Fund selects the most effective projects and lends at 5% per annum for ten years. The concept of “the most effective” refers to about 10% of the projects applied for funding.

Ilya Yakunin, a representative of the North Caucasian Development Corporation, confirmed that the Corporation also invests only in highly efficient projects (mainly the agribusiness complex), more often in the form of contributions to fixed assets.

“Our economic development depends on the state of the investment process. Loans as a source of investment account for 67% worldwide, and we have exactly the opposite situation - 60% of investments are own funds,” said Vladimir Ganza, the Chairman of the Committee on Financial Markets. “This is due to the great withdrawal of money by the state from the economy. The law restricts banks from engaging in direct investment, so their share is only 8%.”

According to the speaker, it is necessary to create normal investment banks, to develop such a tool as bonds, to use development institutions and state corporations as sources of financing, and to find ways to attract money from the State and the population. Alina Vetrova from the Association of Regional Banks of Russia noted the possibility of individual investment accounts as a solution to the latter issue.