ANDREY KOSTIN: Good afternoon.
REPORTER: I thought it’s a very interesting speech there by
ANDREY KOSTIN: I think, there are two major problems now for the Russian economy, and one is the infrastructure. Russian government will be spending more on infrastructure and will be using more widely the PPP mechanism in this regard. Another is bringing in investments. We do believe that investment climate in Russia is better than the investment image of Russia, but still, more steps should be made in order to achieve good results, including keeping inflation down and improvement of the public governance, as you mentioned, and the activity of government institutions.
REPORTER: Andrey, to be really candid, you have a case where you have the Winter Olympics coming up, you have the World Cup coming up, if you’re not getting the infrastructure build out and the global investment in two huge events like that, when will it ever happen, that’s one of arguments.
ANDREY KOSTIN: The infrastructure for these events will definitely be built, but the problem is not to build the infrastructure just for these two events, we should build infrastructure for the whole country. Not only in Europe, but on the Pacific as well, and that, of course, will require a lot of money, a lot of efforts. But the government and the President are very much focused on this, understanding that one of the most urgent problem for Russia.
REPORTER: There was a long negotiation, arduous negotiation to get into the World Trade Organization, almost two decades long, now the aspiration is to be a member of OECD, is the country starting to see the benefits of WTO membership, because it is ranked as the second most protectionist country after Argentina right now. So it does not seem to be kicking in whatsoever.
ANDREY KOSTIN: Well, there’s still a public debate in Russia, whether Russia would benefit from joining WTO, but the political decision was made, Russia joined WTO, and we are now trying to get used to these conditions. Definitely, a lot of subsidies, I mean, many mechanisms should be changed and the Russian economy should become more competitive, but we see advantages mainly in this — we should build up our economy, we should build new technological industries, but based on quite competitive basis.
REPORTER: As you know, in the next half hour we are going to hear from Mario Draghi, the President of the European Central Bank, and the message we’ve heard so far from European leaders like Angela Merkel is «we stopped the crisis, we stopped the bleeding, but we can’t lower our guard just yet. " But Russia has to export so much to Europe, this downgrade from International Monetary Fund this week must alarm you as a large lender in Russia.
ANDREY KOSTIN: Mr. Cameron gave a different signal, I am afraid, which is highly debated.
REPORTER: He wanted to exit, but he is also saying that you need to be more flexible as an economy, right?
ANDREY KOSTIN: Yes, Russia definitely should review its policy. We understand this, we are still very much dependent on gas and oil export, and the economy should be changed, the economy is vulnerable till the time when we change this. That’s why the focus should be on high, new technologies, innovative technologies, and Russia is quite well advanced in this. For example, Yandex is just the second company in the world except for Google, and it was invented in Russia, so there are many other examples of this. And agriculture, a new area, which the
REPORTER: To do it again. Good to see you, Andrey Kostin, thank you for joining us, the Chief Executive Officer of VTB.
ANDREY KOSTIN: Thank you very much.