Russia showcased as world economy sputters

June 4, 2008
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MOSCOW, June 4 – Russia will project its new confidence on a gloomy world economy this weekend at a glitzy forum in Saint Petersburg, home city of the country\’s current political and economic elite.

President Dmitry Medvedev was expected to deliver a keynote speech on the economy — his first since taking office — to political and business leaders at the Saint Petersburg Economic Forum, which runs on Saturday and Sunday.

In a reflection of Russia\’s status as the world\’s biggest energy power, the chief executives of oil majors BP, Chevron, ConocoPhillips, ExxonMobil, Shell and Russian gas giant Gazprom were also due to address the forum.

Officials said contracts worth more than 12 billion dollars (7.7 billion euros) will be signed at the meeting, where the new Saint Petersburg Commodity Exchange, due to start trading oil later this year, will also be showcased.

"Contracts worth 12 billion dollars were signed last year. I think this year it will be no less than that," Deputy Economic Development Minister Andrei Klepach told the Itogi news weekly in an interview.

"It\’s a sign of growing foreign investor interest in Russia," Klepach said.

German Gref, chairman of state-owned bank Sberbank and one of the speakers at the forum, told Prime-Tass news agency that the forum "is one of most significant ways of creating a positive image of Russia."

Among other speakers will be US Secretary of Commerce Carlos Gutierrez and officials from Brazil, China and India, seen along with Russia as the world\’s four most powerful emerging economies.

Analysts said the forum in Saint Petersburg was aimed at promoting an image of Russia as a good place to do business despite recent high-profile business disputes involving foreign investors such as BP and Shell.

Also speaking at the forum will be Robert Dudley, chief executive of embattled British-Russian oil giant TNK-BP, Russia\’s third largest oil producer, which is riven by a dispute between BP and its Russian partners.

The forum is part of a campaign to "change the image of Russia from a risky place to invest to a good place to do business. That\’s Medvedev\’s biggest challenge," said Chris Weafer, an analyst with Moscow investment bank Uralsib.

Referring to the large number of Russian political and business figures at the forum, Weafer added: "It\’s more of a networking event … A great deal of what happens will be going on behind closed doors."

Investors will also be looking for signs about the Russian government\’s economic plans under Medvedev amid signs that the economy is overheating despite a cushion of high oil prices, analysts said.

"Further movement to the integration of Russia in the world economy … will be very welcome and that\’s what people will be looking forward to," said Klaus Rohland, Russia director for the World Bank.

Organisers are hoping the forum will also help boost investment abroad by Russian companies. Russia has been relatively unaffected by the world financial crisis and has also set up a sovereign wealth fund for investments.

"We can now use the potential that our economy has. New opportunities are opening for us to strengthen our national position on world markets and the opinions of such important experts will be useful," Klepach said.

Saint Petersburg, Medvedev\’s home city, will be pulling out all the stops for the forum, hosting a concert by Pink Floyd\’s Roger Waters, an opera conducted by Valery Gergiyev and a laser show in the city\’s historic centre.

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