On 4 March 2021 the plenary session of the Great Open Dialogue forum was held in online form in Moscow and Ekaterinburg, with support from TASS.
The forum’s participants discussed prospects for cooperation between business and government to deliver national-scale projects, as well as Sverdlovsk Region’s experience of developing its investment climate. The main topic of the event was Russia’s national development goals. These were set out by Russia’s President Vladimir Putin in July 2020 and specified growth in investment as a key economic goal, marking the starting point for a new cycle of investment beginning in 2021.
Russia’s first deputy economic development minister Andrei Ivanov emphasised that the plans set out by the President cannot be brought to fruition without business. He said that the Ministry of Economic Development is currently focussed on developing a ‘Russian Investment Canon’, which will be a system to support investment projects both large and small, and he also noted that it is specifically in Russia’s regions where most of the work will take place. Mr Ivanov said that now is the time for Russia to convert political stability into attractiveness for investment.
In his speech the President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin addressed the problem of removing limitations related to infrastructure. He also reminded the audience of the joint efforts being taken in the field of investment by the big four business associations and the Agency for Strategic Initiatives, and, in particular, of the regional investment attractiveness ratings published by them.
Alexander Shokhin stated that the Russian government and the RSPP are working on legislative amendments to remove a number of current infrastructure-related limitations.
“We have put a lot of proposals in motion. Literally right now we are discussing amendments to the current legislation. Obviously, we are interested in removing limitations and barriers,” he said in response to a question about RSPP initiatives that are being discussed with the government as part of the strategy for social and economic development.
He said that this relates particularly to removal of limitations in the construction industry, affecting both residential and industrial construction.
“This is about being able to build at a lower cost, faster and to higher quality standards,” Alexander Shokhin commented.
He added that the factors that can be identified as limitations in the construction industry include long approval processes and outdated requirements affecting construction projects. Removing these restrictions will allow construction to be completed more quickly while reducing the associated costs.
“When we compare the costs and timeframes for construction of the same building in Russia to those in China, Japan, Canada, it turns out that an identical building is 30-50% costlier here, sometimes even more. And it also takes several years longer to build. Excessive requirements cause projects to be overloaded with extra specifications. So ultimately the cost can be reduced by at least a third. There are also operating costs, so if the infrastructure footprint is smaller that also means the costs of maintaining it will be lower,” the RSPP President stressed.
He specified that this work is being carried out within the scope of the strategy for social and economic development, which is divided up into five areas.
“The strategy is made up of five groups, including the ‘new high-tech economy’. It has 8 sub-groups including 4 ‘vertical silos’ for different industries - transport, ‘new-look manufacturing’, energy, agriculture and so on. And there are also horizontal groups as well. In particular there is ‘launching a new investment cycle’, ‘supporting exports’, ‘new positioning for Russia globally’, ‘small and medium-sized business’ and so on. And we are working on both the horizontal and vertical axes,” he said. Alexander Shokhin also revealed that the strategy has not yet been fully agreed with the Prime Minister Mikhail Mishustin.
“Everything is due to be ready by 14 May. But actually, in a month’s time there will be a coordination meeting at which a unified methodology will be put in place, for all the groups. What this means is that all the proposals are due to be brought together at this meeting. All this is due to be done by April,” the RSPP President stated. The development of projects within the framework of the strategy is being carried out by the ministries, working alongside experts and business under the direct management of the vice-Prime Ministers responsible for the areas in question.
Alexander Shokhin also touched on the subject of developing new modes of transport and the associated infrastructure due to restrictions that may be introduced to fight climate change.
“We will need to take active steps in the near future to develop e-transport, electric cars. Natural gas fuel will also be used increasingly as a power source for internal combustion engines. Restrictions associated with climate will require a sharper turn in this direction,” the RSPP President said.
He added that developing the transport sector does not only include launching new modes of transport but also developing infrastructure facilities for them.
“This is not just about manufacturing good electric buses or high-speed trams. This is about a new model, essentially what we are talking about is a multifaceted digital model for organisation of road traffic in our cities. That means setting up infrastructure, including for new modes of transport. It means Autogas filling stations and charging facilities,” Alexander Shokhin said.
According to the RSPP President, infrastructure development is one of the sectors capable of attracting new investments.
The President of the Chamber of Commerce and Industry of the Russian Federation Sergei Katyrin spoke about the Chamber’s ‘Business Barometer for the Country’ project, which was created during the most severe period of the pandemic. The project is an anonymous survey completed by around 85 thousand entrepreneurs, which allows feedback to be provided on the support measures implemented by the state. The opinions of the country’s businesses have been communicated to the ministries and agencies and have also been incorporated into three sets of proposals drawn up and brought before the government by the Chamber of Commerce and Industry.
While discussing problems associated with investment, the Chamber’s head commented that rather than racing after foreign investors and foreign money, serious attention should instead be devoted to the operation of the domestic banking sector.
80% of all financial resources are concentrated in the banking sector, yet it accounts for less than 10% of capital investment (and of that amount, around 2% is provided by foreign banks). Twenty Russian regions do not have a single regional bank, while a further 20 only have one such bank. Sergei Katyrin stressed that the big question is how we can think about promoting investments in small and medium-sized companies.
The first deputy governor of Sverdlovsk Region Alexander Vysokinsky informed the audience that around 40% of his region’s population are employed by small and medium-sized businesses. He emphasised that without small business there would be no medium-sized business, and that without medium-sized business there would be no large or international business. Therefore we should not draw divisions between one and the other. Alexander Vysokinsky discussed the mayor investment projects being implemented in the region, noting that progress can only be achieved through a holistic approach and through development of social, educational and transport infrastructure - all the things that are collectively referred to as ‘quality of life’.
The President of the ‘OPORA Russia’ All-Russian Non-Governmental Organization of Small and Medium Business Alexander Kalinin spoke about employment and the development of new markets for business, particularly in the field of trade, and also lamented the delay in adoption of laws on mobile trading and on the development of farming.
The general director of the ‘National Priorities’ Autonomous Non-Profit Organisation Sofia Malyavina referred to the results of a survey showing that 89% of Russian entrepreneurs share the country’s national goals, and 59% see themselves as participants in national projects. She informed the audience about her organisation’s activities, which involve studying and promoting successful practices for involving business in achieving national goals and delivering national projects.
Elina Sidorenko, general director of the ‘ANO ZaBiznes’ Platform for Working with Applications from Entrepreneurs, discussed the platform’s operations and stated that most complaints from entrepreneurs are related to the initiation of criminal cases, with around 60% of applications relating to inquiries prior to the investigation stage. She also forecast that the ongoing heavy tax burden will soon lead to an increase in the number of complaints relating to criminal cases for non-payment of taxes, while bankruptcy cases are also set to rise following the cancelation of the moratorium.
The ZaBiznes electronic resource did not observe any sharp rise in pressure on business from the security structures around the time of the escalation of the coronavirus pandemic in 2020, Elina Sidorenko said.
“Despite our negative forecasts, the situation regarding pressure on business from the security structures has been generally OK during the pandemic. We have not seen any sharp upward movement in abuses by the law-enforcement authorities. This is contrary to the substantial increase that we had expected,” she said.
She revealed that the platform has received over 1700 applications in the past 15 months. Most complaints relate to unjustified initiation of criminal cases against entrepreneurs. In second place are issues relating to improper performance of specific activities during the investigation process and falsification of evidence.
One of the central topics discussed at the forum was new instruments for supporting business, including the Investment Protection and Promotion Agreement. Over 800 people took part in the Forum.
National and regional experts and representatives of business associations discussed opportunities for investment projects in the social sphere, healthcare, development of the creative economy and domestic tourism, as well as business participation in national projects.
Sverdlovsk Region's minister for investment and development Viktoriya Kazakova stated that “on instructions from the governor of Sverdlovsk Region Evgeny Kuivashev we have worked with the initiators of investment projects. This has resulted in the generation of a list of pilot investment projects with potential to take part in Investment Protection and Promotion Agreements - these are 12 projects involving investments totalling over 80 billion roubles. One project that is at an advanced stage is the company SMAK’s construction of a new baked products factory involving investments of 4.2 billion roubles.”