URALSIB’s Vladimir Tikhomirov Speaks at Sochi-2009 Forum
On 18 September 2009, Vladimir Tikhomirov, chief economist at URALSIB Capital, spoke at the round table “The Financial System: More Speculation or a Healthy Start for the Economy?” during the Seventh International Investment Forum Sochi-2009. Among those who took part in the discussion were Roman Goryunov, RTS Chairman, Vladimir Gusakov, MICEX vice-president, Anatoliy Aksakov, State Duma Deputy, Valeriy Fadeyev, Editor-in-Chief of Expert Magazine and a member of the Public Chamber as well as other representatives of banks and consulting, auditing and industrial companies.
In his speech Mr Tikhomirov said that the traditional export sectors will continue to be the economy’s main growth points in the short-term and this will not change any time soon, even with such high-potential sectors as infrastructure and residential housing construction and the consumer sector. Additionally, Russia retains a competitive edge in such sectors as military technology and heavy engineering. Stimulating these sectors may help Russia not only to gain strategically important niches in international markets but also to develop a whole gamut of knowledge-intensive sectors.
Speaking on how to attract investment into Russia’s real sector, Mr Tikhomirov stressed that the Russian authorities must ensure that sufficient conditions are created so as to prevent Russian capital from leaving the country. Key obstacles for investment in Russia are high inflation and expectations of even higher inflation. Mr Tikhomirov believes that current measures for fighting inflation, such as cutting the money supply, are not quite adequate as inflation is of a structural nature. This inflation results from the economy’s incomplete structural reforms (primarily price reform) as well as a legacy of monopolization inherited from Soviet times. Liberalization of tariffs is due to be completed in the near future, but structural changes will take much more time. Mr Tikhomirov does not see any significant downward potential for inflation, with 6-8% remaining the most optimistic scenario for the near future.
The Sochi annual international investment forum, organized by the Russian government for the eighth year in a row, serves as a meeting place for leaders in the Russian and international business scene as well as scientists and government officials, where the modernization and development of Russia’s economy are discussed. This year the forum was held from September 17-20, with more than 8,000 participants from 27 countries. During the forum 238 deals were signed, totaling RUB481.8 bln.
