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INTERNATIONAL INVESTORS PONDER RUSSIAN RISKS
MOSCOW, October 11 (RIA Novosti) - Participants in the Russian-American investment symposium, over on Friday, exchanged advices on how to cash in on Russia's economic upturn and avoid new risks, the newspaper Vedomosti writes.
The situation in Russia has improved over the last two years much more than on any other developing market, MIGA (in the World Bank group) director Jerald West said. In 1999 to 2003 the Russian economy got a 30-percent gain and the inflation rate fell three times, economic development deputy minister Vitali Solovyov said. The macroeconomic environment is good for long-term investments and the business activity is high, too, Nordic Investment Bank senior vice-president Oddvard Ronsen summed up.
At the same time, lack of many things stands in the way of foreign businessmen in Russia. There are no normal highways, bridges and airports outside Moscow and St.Petersburg, international law firm Salans' partner Philip Vindemut warned. The quality of economic growth is far from satisfactory. Russia is one of the most educated nations but its economy relies on natural resources, noted Philip Merill, chairman of the board of directors of the United States' Eximbank.
Many investors are worried over the intervention of the state in business. In their opinion, protection from loss in Russia is only possible if investors operate under the cover of state structures, or the EBRD. Any large capital investment has to have presidential backing, J.P.Morgan vice-president Stanislaw Song said. Moris Grinberg, chairman of the AIG board of directors, admitted that even his company with a 180 billion-dollar capitalisation had to draw a license for work in Russia through the Kremlin and the State Duma.
In the United States, if you abide by the rules and do good business, you can hope for five to seven percent of annual profit; Russia is a jungle but the profit can come up to 100 and 300 percent, chairman of the board of Vimm-Bill-Dann DavidYakobashvili said.
Russia is a fine place for investments, Grinberg crossed all the "t's" dotted all the "i's".