Vnesheconombank Chairman Vladimir Dmitriev’s Interview to the TV Channel Russia 24
HOST: Good afternoon.
Vladimir DMITRIEV, Vnesheconombank Chairman: Good afternoon.
HOST: I’m glad to greet you again at the Petersburg International Economic Forum. Vnesheconombank always comes to this Forum for real projects and real agreements. And I hope this time you have as many projects and agreements as usual
Vladimir DMIRIEV: You’re absolutely right. Actually, we view the Forum as a place and as an opportunity to sum up certain results of our work and at the same time look ahead among other things by way of signing agreements. We have already signed some agreements and we’ll also sign agreements today and tomorrow.
We’ve already signed an agreement with the Russian Railways. It provides for our joint efforts to promote RZHD to third countries’ markets. Naturally, we’ll use here a whole range of Vnesheconombank’s and its subsidiaries’ capabilities. These include funding and insurance through extending insurance policies to our export insurance agency; this is also the Direct Investment Fund which is also in a position to operate on third countries’ markets.
A quadruple agreement has just been signed by Vnesheconombank, the Administration of the Primorsky Territory, Changi Airport International and the Far East and the Baikal Region Development Fund. The agreement provides for Changi Airport International to increase passenger flow and boost the Vladivostok airport complex’s investment appeal.
We are also planning to sign a very specific agreement. Here I mean development of Yamal’s oil fields – the Yamal LNG project on the construction of a natural gas liquefaction plant. NOVATEK acts as an investor together with French company Total. The agreement will provide for offering financial services to Sovcomflot and Yamal LNG on manufacturing and leasing enhanced ice class vessels to transport liquefied natural gas to third countries’ markets.
Some agreements are basically memorandums of intentions or agreements on cooperation I’d like to single out agreements with the Leningrad region, the Kirov region and the Republic of Tatarstan. They provide for the comprehensive development of territories and Vnesheconombank’s participation in various investment projects in these regions.
HOST: Are you going to present the Development Award as part of this Forum?
Vladimir Dmitriev: Yes, we are, after a plenary session tomorrow. We made an arrangement for presenting this award with Head of the Presidential Administration Sergei Ivanov. A decision on the Development Award was taken last year and during the year we worked on announcing it and receiving applications. To this end, we set up Vnesheconombank’s Expert Council which evaluated applications objectively in four nominations: The Best Project in Industrial Sectors, the Best Infrastructure Project, the Best Project of Small and Medium-Sized Enterprises and the Best Project on the Comprehensive Development of Territories. For good reasons I won’t name the names of the winners. But I assure you these are the best projects in these nominations.
HOST: What do you mean by the best investment project? Is it the largest project, the most socially significant one or the most reliable one?
-In our case we evaluate a project not in terms of its size but in terms of its structure, investors’ and local authorities’ participation in it and raising investments from Vnesheconombank and foreign countries. Parameters include a whole number of key indicators of a project’s success.
HOST: Vladimir Alexandrovich if we regard the number and sizes of agreements concluded every year as part of the Petersburg forums as some sort of indicator for the state of economy, what does it show at the moment? Today, German Gref described investment climate as an incomprehensible beast about which nobody knows anything. What can you say about the current investment climate and about how it is changing?
Vladimir DMITRIEV: In this respect, I remember discussions that were held two years ago when a decision on establishing a Russian Direct Investment Fund was being taken. Many experts including well-known specialists tried to convince us that it made no sense to establish such a fund because the investment climate was unfavorable and all the efforts to set up investment funds in Russia together with foreign investment funds and investment banks had been a failure. They believed that our efforts wouldn’t be doomed to success.
A year and a half operation of the Russian Direct Investment Fund showed that foreign direct investment funds as well as sovereign funds are ready to make investments in efficient projects in Russia. And this means that we have such projects in our country. And we have them not only in Central or European part of Russia but also in the Far East. And a good evidence of this is not only the establishment of a Russian-Chinese Investment Fund but also the first transactions with its participation. The fact is that a whole number of regions are flagships in raising investments. Here I can cite Tatarstan, the Ulyanovsk region and the Kaluga region. And we are happy that Vnesheconombank is operating quite actively in the successful regions.
HOST: What can you tell us about events accompanying the investment environment? Here I mean for example reports about forthcoming ruble devaluation. What effects will it have? Might it help domestic producers by improving their export capabilities? Will it encourage economic growth, which is a matter of serious concern now?
Vladimir DMITRIEV: The talk about devaluation is taking place against the backdrop of Russian exporters’ old-time complaints that if you restrain the ruble you restrain Russia’s export potential. But we are not talking about some sort mandatory, compulsory devaluation but about the Central Bank’s commitment to greater liberalization and market fluctuations of the ruble exchange rate without a constraining influence of the Central Bank. And this is not a purely Russian phenomenon. Freeing the ruble exchange rate and its controlled devaluation will play into the hands of Russian exporters and not only those operating in the raw materials sector but also those that can compete on the world’s markets taking advantage of pricing policy. It is important that this free or controlled devaluation should not result in increased inflation rate and other circumstances that in total might have more serious implications on the country’s economy than stimulating export potential.
HOST: And now my last question. There will be a meeting of development institutions of the Group of Twenty. What do you expect of this Forum?
Vladimir DMITRIEV: I’d like to say a few words about the preparatory work done before this coming meeting. This work was carried out by national and regional development institutions, such our partners as Germany’s Bank for Development, the China State Development Bank, our friends from Italy and France, our partners from the European Bank for Reconstruction and Development and the Asia-Pacific region. We all arrived at a consensus that we can develop both national economies and regional projects only by way of combining development institutions’ global efforts.
Last year, we got together in Luxemburg where we were received by the European Investment Bank. I should say that by that time both the Long-Term Investors Club and the International Development Finance Club were already in place. We offered to hold regular meetings of development institutions as part of the Group of Twenty and invite international financing institutions to attend these meeting in order to work out a common policy and make concerted efforts to develop economies of our countries.
We’ll hold a meeting of leading Development Institutions of the Group of Twenty and financing institutions this July in parallel with a meeting of Group of Twenty finance ministers in a situation when Russia chairs the Group of Twenty and a role of development institutions in the global economy is substantially increasing and everybody is now aware that long-term investments are guarantees for suitable growth. We agreed upon a draft declaration with our Finance Ministry. Our financial officials believe that it is in line with the agenda to be discussed by Group of Twenty finance ministers. So, we’ll be able to help our governments’ to promote sustainable development of our economies.
HOST: I wish you every success. Thank you for your interview.
Vladimir Dmitriev: Thank you.
These are really the best projects in Russia’s modern-day economy
Vnesheconombank Chairman Vladimir Dmitriev about the Development Award contest
-In a day or two Vnesheconombank will for the first present the Development Award to Russia’s best investors. What sort of award is it?
-It might seem that this is a brand new project but we have already been working on it for a year and a half. Vladimir Putin – the then Prime Minister and the Chairman of VEB’s Supervisory Board backed the idea of instituting the Development Award to be presented for the best investment projects in the Russian economy.
-How did this idea come into being?
-As a Bank for Development VEB is assigned a complicated task of developing and supporting industrial, infrastructure and innovation projects. It’s very difficult to be involved in the comprehensive development of economy even in a stable situation on the world’s markets and the more so at times of global crises. We keep on working, investing, building and there is always talk around that the Russian economy is skidding, stagnating and the investment climate is getting worse year by year. And we on our part can see quite a different situation – we receive applications for credits to fund new projects almost on a daily basis.
Under these circumstances an idea of instituting the Development Award came into being.
-Is this award intended for VEB’s borrowers.
-Not at all. If it was intended for our borrowers a picture would be unobjective and incomplete. We decided not to limit anybody. Any legal entity could submit an application for the award.
-Did you receive many applications?
We had been receiving applications for several months and we didn’t expect that there would be so many applicants. All in all we received 221 applicant projects so our contest committee had to work very hard to make a short list. It was extremely difficult to make a choice – a lot of projects proved to be top-quality.
-How many nominations does the award have? And what criteria did you use to identify them?
- We decided to identify them on the basis of Vnesheconombank’s Memorandum on Financial Policies. We have our top-priority lines of activity and we have been operating in accordance with them for already six years. We have chosen four nominations of the Development Award out of them: “the Best Infrastructure Project”, “the Best Project in Industrial Sectors”, “the Best Project on the Comprehensive Development of Territories”, “the Best Project of Small and Medium-Sized Enterprises (SMEs)”.
-I’m sure that small and medium-sized enterprises submitted the least number of applications.
-You would be surprised but out of 221 applications 78 were submitted by SMEs. This is evidence that all the talk about an unfavorable investment climate in Russia and the actual absence of small and medium-sized enterprises is no more than a banal stereotype.
-Who evaluated the applications received?
-Our contest committee was comprised of Russia’s best economic experts. These are employees from the RF Government Office, heads of line ministries and members of VEB’s Expert Council as well as our colleagues from other state corporations. All in all there are 28 people. And only ten members are from our Bank’s management. (see the detailed information about the contest committee’s composition on the Bank’s site http://www.veb.ru/ ).
-Who are the winners of the contest?
-We’ll reveal their names at an awarding ceremony at the Petersburg International Economic Forum. The Award’s status is very high. I can say now that our Supervisory Board has already approved the winners. The level of all four projects is very high. And although it might seem immodest I should say that these are really the best projects in Russia’s modern-day economy. I hope that in the future investors of such a high level of competence will contend for the Development Award.