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Andrey Kostin: “We still believe that the economy is not in the recession, but the growth is very slow”


Andrey Kostin: “We still believe that the economy is not in the recession, but the growth is very slow”.

— Is the economy in free fall?

— Well, we still believe that the economy is not in the recession, but I agree that the growth is very slow. And there are a lot of concerns of the government for the business community. The government is trying to resolve the situation in two ways: one is to spend half of the national wealth fund on infrastructure, so making more government investments and increasing the PPP projects (public-private partnership); on the other hand it is trying to improve the investment climate. The government is not ready to spend more from the budget, as the government is very much committed to its strict budget discipline.

— How do you improve the investment climate in Russia? You’ve got a year’s history of investors just being concerned about getting involved, the stock market tells the story.

— I think the government is right in sticking to very specific ways, they have a long list, the so-called road map, and I think it’s moving in this direction. I think we set quite an ambitious target on moving on the charter of the climates in the world. I think, things are changing, I mean, maybe not as fast as we’d like to, but I think it’s becoming reasonably good.

— You talked about investment. Talk me about Sochi Olympics, $50 bn, was it a complete waste of money for the country when it was needed elsewhere?

— I don’t think so, I mean we also participated in the building of a five-star hotel, where the major sponsor, Coca-Cola will be placed. And Russia never had high-class health resort or holiday resort. And this investment is not only the investment in sports, the investment in holiday resort which is now very-very high standard. Of course, all Olympics are some excessive spending, but I think it’s very important for, as Mr. Putin mentioned, the morale of the nation. But it’s also, I think, quite an important investment project.

— Talking about the morale of the nation, you have to wonder whether the stagnation that you’re seeing in the growth at home makes Russia want to be more present on the international stage. How do you see the relationship with Russia and the EU playing out in light of what’s going in the Ukraine, and complaints of Georgia yesterday too? What’s Russia’s policy?

— I am afraid that our relations with EU are going in the wrong direction. I think the relationship is not very good, and we think in Russia that there are a lot of politics involved in EU’s approach to economy, and to Ukraine as well. I mean we see extremely high interest of EU in the Ukraine, which I think is quite excessive, and from this point of view we would like to go back to our relationship with the EU. I don’t think that Russia will go along the path of deeper integration with EU in the nearest future; I think Russia will continue the effort through WTO and G-20 rather than specifying on the regional aspect of developing integration with EU. Though, EU is still our major trading partner.

— Ukraine and Georgia — these countries are just trying to sign up to further integration with EU, seems like Russia’s getting in away of that.

— Russian position on Ukraine was very clear, I mean if Ukraine is moving into EU direction, the relationship with Russia should be reviewed. I think it’s quite necessary — it’s coming from nature of the trade relationship and customs control and exchanging. But of course, it’s very sensitive for us, because Ukraine for Russia it’s just like Scotland for Great Britain. I don’t know how English people feel about referendum in Scotland, but we definitely have a lot of feelings about Ukraine.

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