Klepach: factual dynamics of GDP is lower than a potential one
Sochi, October 3, 2015
SOCHI, October 3. /TASS/. Factual dynamics of Russian GDP is a lot lower than a potential one and economic potential is diminishing. This is an opinion voiced by VEB Deputy Chairman Andrei Klepach in the course of the International Investment Forum in Sochi.
“Factual dynamics of GDP is lower than a potential one. As a result of what is happening now our potential GDP is dwindling, that is, conditions for a future economic growth are deteriorating”, he said.
Mr. Klepach believes that in order to change the situation for the better we need to loosen monetary policy. “A more difficult question is how to do it. It is one of dilemmas and not only of the Russian Central Bank but also of others. In my opinion, to soften the policy head-on by way of reducing interest rates sharply in all directions would be wrong”, he said.
Such a step won’t result in easing credits to enterprises and in bringing about economic recovery but in a strengthened currency exchange rate. “Then we can start raising a question of toughening a regime of currency operations, introducing currency control, so a long chain of problems will follow”, continued Klepach.
In his opinion, the Russian Central Bank should go along a path of using non-traditional instruments for supporting investments and small-sized enterprises. He added that they were being used but not in sufficient volume.
V. Dmitriev: “By supporting big business we shouldn’t forget about developing small and medium-sized enterprises”
The National Banking Magazine
Moscow, October 2, 2015
A key priority in VEB’s operation should be to support major investment projects aimed at introducing advanced technologies to increase our country’s export potential. This is a crucial task now, given that the amount of long money in our economy is decreasing under the influence of restrictive measures taken against Russia.
This is an opinion that Vnesheconombank Chairman Vladimir Dmitriev voiced in his address at the International Investment Forum Sochi-2015. “At the same time, by supporting big business we shouldn’t forget about developing small and medium-sized enterprises. In our activity we always keep this in mind and to this end for example we created a single window system for owners of SMEs. We hope that this system, to be more exact, the Export Center will play a key role in supporting SMEs”, explained Vladimir Dmitriev.
“I’d like to stress that this initiative is important because it is designed to create investment lift. It is aimed at reducing tax burden on SME companies through entering into their capital by the Credit Guarantee Agency”, added Vnesheconombank’s Chairman.
Vladimir Dmitriev’s address at a plenary session of the Forum Sochi-2015
TV Channel Russia 24
HOST: Vladimir Alexandrovich Dmitriev, Vnesheconombank Chairman. Vladimir Alexandrovich, I also looked through the Law on the Bank for Development. The Law specifies a lot of Vnesheconombank’s functions. Nevertheless, given that your Bank is the country’s main development institution, could you name three top-priority tasks which Vnesheconombank should carry out to return to economic growth under the conditions of the crisis and sanctions?
Vladimir DMITRIEV: Thank you Andrei. I have a difficult mission in this audience with the Prime Minister and at the same time Vnesheconombank’s Supervisory Board Chairman on my left and almost all members of Vnesheconombank’s Supervisory Board in front of me.
Vladimir DMITRIEV: In fact, in our Memorandum of Financial Policies you can find lot of sectors and various lines of economic activity where Vnesheconombank should operate. These priorities remain unchanged but the situation is changing so focuses are shifting.
HOST: By the way, I’m sorry Vladimir Alexandrovich, I haven’t mentioned a figure that shows the way Vnesheconombank operates currently. The amount of exports support has increased lately by 30 times. It’s very important for the audience to hear this figure.
Vladimir DMITRIEV: Frankly speaking, I still believe that the Bank’s top priority should be to fund major investment projects. It is especially very important now in the current situation when we see that the lending market and especially the market for investments are getting tighter. This means that the number of big, long-term credits is constantly diminishing and it goes without saying that Vnesheconombank as a main financial development institution should provide support and continue to fund major investment projects and here I mean major projects that are associated with introducing advanced technologies, manufacturing high-tech products, contributing to import substitution and increasing our exports potential. A number of large-scale projects have been implemented in our country in the past years; they include such projects as Tobolsk –Polymer, Yamal LNG, Ford-Sollers, AvtoVAZ, KamAZ, projects in our aviation industry. Besides major projects, we also give high priority to providing support for small and medium-sized enterprises. When we enter into various major projects, together with our partners we explore the possibility of creating jobs for small and medium-sized enterprises. And the newly established Corporation for the Development of Small and Medium-Sized Enterprises will be highly instrumental in creating new middle class. The new Export Center will act as single window and it will unite separate mechanisms of small and medium-sized businesses. The Export Center will provide a whole range of services. This Center should play serious role in making measures for providing the state’s support for small and medium-sized enterprises more efficient. Providing support for industrial non-raw materials exports is one of our Bank’s top-priority lines of activity and the integration of the previously existing institutions was highly instrumental in this respect. It is logical that the Russian Export Center, the Export Credit Agency of Russia and Roseximbank are Vnesheconombank’s structures. In my opinion we divide function among ourselves in a logical way, for example, Vnesheconombank is responsible for providing support for major industrial projects designed for exports - construction of electricity power stations, supplies of rolling stock, the Sukhoi Superjet 100 project and other projects. The Russian Export Center is aimed at developing universal products for small and medium-sized enterprises. I’d also like to stress the importance of a recent initiative on developing investment lift where both Vnesheconombank’s and non-government structures such as the Agency for Strategic Initiatives are involved. The idea is to reduce tax burden on small and medium-sized enterprises by way of entering into capital of efficient companies. By using financial mechanisms of Vnesheconombank Group and joining efforts of the Agency for Strategic Initiative and the business community, we are addressing crucial objectives of diversifying our economy and helping our small and medium-sized enterprises to tap foreign markets.
HOST: Thank you. It’s very important to provide support not only for big and mega-big business but also for small and medium-sized enterprises and it’s a good thing that development institutions participate in this line of activity.
VNESHECONOMBANK CHAIRMAN VLADIMIR DMITRIEV’S INTERVIEW TO TV CHANNEL RUSSIA 24
TV Channel Russia 24
Host Nailya Asker-Zade
HOST: The International Investment Forum Sochi-2015 keeps on going and now a guest in our studio is Vnesheconombank Bank Chairman Vladimir Dmitriev. Good afternoon Vladimir Alexandrovich.
Vladimir DMITRIEV: Good afternoon.
HOST: In his address, Prime Minister Dmitry Medvedev talked a lot about steps that would contribute to our economy’s growth, with one of them being import substitution. Does Vnesheconombank participate in processes that encourage import substitution in our country?
Vladimir DMITRIEV: I think that most projects funded with Vnesheconombank’s assistance deal directly or indirectly with import substitution. As import substitution is not an end in itself, we are not going to isolate Russia and act in accordance with the Juche principles, that is, self-reliance. We are developing import substitution keeping in mind that Russia has a sufficient intellectual and industrial potential to provide ourselves with products which we unfortunately still purchase abroad. Vnesheconombank funded such large-scale projects as Tobolsk-Polymer. Vnesheconombank provided about 2 billion dollars for the construction of a major integrated plant to process and utilize associated petroleum gas which is used to manufacture polypropylene, which has been up to now purchased abroad. Vnesheconombank invested significant financial funds in the domestic automotive industry, which manufactures now competitive products with the assistance and cooperation links of such large automakers as Ford, Fiat and Japanese automakers. Such projects include “Ford Sollers”, AvtoVAZ, KamAZ. Vnesheconombank invested in these projects more than 100 billion rubles. There are also other projects but I’d like to stress that as far as import substitution is concerned we should try to find out where small and medium-sized enterprises might want to operate. Providing support for small and medium-sized enterprises is also one of pour top-priority lines of activity. We should support SMEs in such a way that they could get involved in import-substitution projects, in manufacturing high-tech competitive products.
HOST: Vnesheconombank extended guarantees to Transaero and we discussed this issue with you in the Far East, you said that there was no threat of default for Transaero. Now the situation has changed and the company will be declared as bankrupt. Did you expect this to happen?
Vladimir DMITRIEV: There was no threat of bankruptcy when we talked with you but I’d like to stress that efforts made by the state, business, companies and banks with state participation were aimed at changing the situation for the better. As early as last year, Vnesheconombank warned on the basis of information received from its subsidiary VEB-Leasing that the situation with Transaero was unfavorable. Now we know that the situation was unfavorable in many respects for example reporting accounts and financial documents that were submitted to banks and financial institutions, mildly speaking, were not in line with reality. We proved to be victims of such actions. Now we can see that the company is not capable of fulfilling its obligations to passengers and most importantly to banks and leasing companies that extended credits to it. Unfortunately, they failed to implement a project that provided for Aeroflot to receive a 75-percent stake and start to rehabilitate the company through assuming some of Transaero’s obligations. But this scenario also fell through. Now the company’s bankruptcy is one of most likely scenarios. But we should take it easy, at least we shouldn’t overdramatize the situation as bankruptcy does not mean mass layoffs and closing down business activity. We are considering an option of “soft landing” in this complicated situation, an option of managed bankruptcy but I’d like to stress it once more that bankruptcy is one of probable scenarios. We are also considering other scenarios…Our leasing company VEB-Leasing and VTB leasing company have to work very hard. We hold talks with our partners and friends from VTB almost on a daily basis in order to consider an option of establishing a company on the basis of the existing aircraft fleet. And this company could assume additional obligations using mechanisms of state support to transport passengers and service passengers flows. This is an option to be considered in a serious way as we have human resources and managerial potential.
HOST: Let’s hope that the situation will be resolved after all. Thank you very much.
Total value of VEB’s projects in the Krasnodar Territory is 3.5 trillion rubles
Moscow, September 30, 2015
MOSCOW, Sept. 30- RIA Novosti/Prime. The cost of funding projects in the Krasnodar Territory by VEB is 3.5 trillion rubles, RIA Novosti reported at the State Corporation’s press office in connection with the Sochi International Investment Forum to open on October 2, 2015.
“The total value of projects in the Krasnodar Territory as of September 1, 2015, is 6.7 trillion ruble, with VEDB’s approved participation share being 3.5 billion rubles. A total of 1.9 trillion rubles were committed to projects with VEB’s participation in the Krasnodar Territory”, according to the State Corporation’s press office.
Out of them VEB fully funded the construction of 20 Olympic facilities in Sochi for an amount of 251.1 billion rubles, with their total value being 334.4 billion rubles.“Since the establishment of the Bank for Development, VEB’s governance bodies approved the Bank’s participation in 331 projects. Out of them VEB completed funding of 77 projects, at present, 198 projects are being funded”, they said at VEB’s press office.
Among projects funded are the construction and operation of Alpine Ski resort Rosa Khutor valued at 85.4 billion rubles, with VED’s participation share being 72.8 billion rubles, as well as the construction of Olympic facilities at GornayaKarusel sports and tourist complex in Krasnaya Polyana valued at 93.7 billion rubles, with VEB’s participation share being 59.7 billion rubles. The cost of VEB’s participation in the project on the construction of the main Olympic Village to accommodate 3000 athletes is 24.8 billion rubles out of 28.5 billion rubles.
The construction of a five-star hotel in Immertinskaya lowland wasin the Krasnodar Territorybillion rubles out of which VEB committed 4.9 billion rubles. The construction of an office building in this district was worth 4.99 billion rubles, with VEB accounting for 4.3 billion rubles. The construction