Davos 2011: Medvedev opens WEF with call to action

Russian President Dmitry Medvedev has officially opened the World Economic Forum, two days after a bomb blast at a Moscow airport killed 35 people. Mr Medvedev used his speech to condemn those behind Monday’s attack. He said the terrorists had expected him to cancel his trip to Davos but had “miscalculated”. Mr Medvedev also said Russia was seeking to attract investment and was working to establish a common economic area with the European Union. The Russian president’s appearance before the global business elite was seen as an important chance to promote his country’s massive privatisation programme.

Before Mr Medvedev gave his address, WEF founder Klaus Schwab asked those gathered in the Congress Centre to observe a minute’s silence in memory of the victims of Monday’s attack. Mr Medvedev said that because of the attack, he would be cutting short his trip and immediately heading back to Russia. He also defended Russia against its critics. “Russia is very often criticised. Sometimes the criticism is well-deserved, sometimes absolutely not,” he stated, adding that Russia was rebuked for its lack of democracy, and the weaknesses of its legal and judicial systems. But he added: “Today we are the way we are.” Major changes were taking place to improve the investment climate in Russia and the quality of life, he said. “We are learning and willing to receive friendly advice. What we don’t need is lecturing, we should be working together.”

Ahead of Mr Medvedev’s speech, Russia’s Deputy Prime Minister Igor Sechin appeared with BP chief executive Bob Dudley at a press conference, after the two had signed a strategic framework agreement. Mr Sechin – who is also chairman of state energy firm Rosneft – told reporters that Russia’s privatisation programme was a “further step towards a market-based competitive economy” and would be “the basis of economic growth”. He said the modernisation of traditional industries such as mining and energy would be key. As well as the BP deal, agreements have also been signed with General Electric to produce medical equipment and with Chevron on exploration, he said. “We have no prejudices,” Mr Sechin said. “Our only pre-condition is be equal in partnership.”

One place considered a potential investment opportunity is Vladivostok, Russia’s largest port city, seen as a commercial backwater for decades. It is on the threshold of the fast-growing economies of Asia – 9,000km from Moscow but just 1,300km from Beijing. The mineral riches of nearby Siberia and oil pipelines both travel West to markets in Europe. But now with growth in Asia burgeoning, the city has found renewed significance as Russia’s shipping gateway to the East. “Co-operation between Russia and Asia is already very diverse and includes natural resources such as energy and ore,” says Alexander Abramov at the Far Eastern Centre for Economic Development. “And of course, Russia will export everything the growing Chinese economy needs.” As the country works to redefine its trade relationships, it is also trying to woo foreign capital to boost the economy. Vladivostok’s proximity to markets in the East make it an ideal launchpad.

The Apec summit, a high profile meeting between Asia-Pacific leaders, will take place there next year.  Russia is desperate to present itself as open, modern and innovative but what concerns foreign companies most of all is the country’s rule of law. The recent second verdict against former oil tycoon Mikhail Khodorkovsky was seen by many foreign investors as a reminder of the all-pervasive nature of politics in Russia. Russians themselves are well aware that how the country wishes to be perceived often finds itself at odds with how it is actually viewed. Even within the Kremlin, the chief economic adviser to the president has admitted to an image problem. This year, with an ambitious privatisation programme to get underway, Russia needs to put its best foot forward. Its central role at the World Economic Forum in Davos will give important insights into how it plans to do that. – BBC