Life after the recession: what are the results brought the investment forum in Sochi

Life after the recession: what are the results brought the investment forum in Sochi

Returned to economic growth

The main message that came from the officials, can be described as: the recession is over, the Treasury began to flow again, oil revenues, but economic growth should be accelerated. The head of the government Dmitry Medvedev at the plenary session “Sochi-2017” on Monday adopted the idea that Russia has “learned to cope” with all the challenges last time — instability of commodity markets, structural imbalances in the economy, the sanctions of the West. Real incomes of Russian citizens “began to slowly rise,” inflation fell to a record low, “with unemployment right”, enumerated Medvedev.

Back in the fall, when oil approached $50 per barrel (at $40, budget and the current macroeconomic forecast), Ministry of economic development predicted weak economic growth in 2017 by 0.6%. Now the Ministry is preparing a new edition of the forecast, which will be recorded expectations of growth this year to 2%, said at the Sochi forum the Minister of economic development Maxim Oreshkin. “We expect a very good growth rates in the economy, we see increased activity,” said Oreshkin.

In General, “positive” passed and the closed meeting of Medvedev with representatives of business on the first day of the forum, told the participants. “Underlying [the meeting] was positive, the business understands that the economy began to revive growth. Accordingly, there is a big question how those backlogs that have emerged over the last couple of years, some businesses, to save,” — said the CEO of RDIF, Kirill Dmitriev.

The Minister of economic development of the Russian Federation Maxim Oreshkin, Deputy Prime Minister Dmitry Kozak, Prime Minister Dmitry Medvedev, Finance Minister Anton Siluanov and the Chairman of the accounts chamber of the Russian Federation Tatyana Golikova (left to right)

Photo: Alexander Astafyev / press service of the Russian government / TASS

All care about taxes

The Sochi area has become the first business officials and experts had the opportunity to discuss the latest ideas in the field of taxes. The General idea of “tax maneuver” the authorities do not hide: to reduce the burden on labour (social contributions) and to compensate for lost revenues by increasing the VAT or personal income tax. But the numerical parameters of the maneuver so far, has been “serious discrepancies” in the government, said in an interview with the head of the Center for strategic research (CSR) Alexei Kudrin.

According to Kudrin, the option with the decrease in the rate of insurance contributions from the current 30 to 21/22% is problematic due to the fact that the Pension Fund in this case will receive more subsidies from the Federal budget. On the other side of the equation — VAT or personal income tax: now they “compete” in the proposals, Kudrin said. Business “is afraid of raising taxes,” says the head of the CSR, but the government just wants to reduce employers ‘ contributions to extra-budgetary funds. On the other hand, there are fears that the load will be redistributed from employers to employees, given that “in Russia the taxation of citizens is less than in other countries.” But in answer to these concerns, Kudrin reassured: “it is Expected that the employer will continue to provide these money wages, but the responsibility will be shifted onto the population. That is, wages will increase by the amount of contributions and pay will be the citizens themselves”.

Overall business at the Sochi forum asked about predictability of business conditions. “All three sites [RSPP, “Business Russia”, “OPORA Russia”] and the chamber of Commerce, all the while we affirm that the predictability for a certain period of time. We must understand that nothing will change,” — said at the plenary meeting a former co-owner “Vimm-the bill-Dann”, the investor David Yakobashvili. This will be one of the main economic plan of the government for the period up to 2025, “achieving stability of business management, including stability of systems of tax and non-tax payments”, announced in Sochi Dmitry Medvedev.

Attendance of the forum

Although the authorities want to make Sochi the “Russian Davos” this year, the Sochi forum has attracted 15% less than business tourists from Moscow than in the past, says the company “flying club”, specializing in business travel for corporate clients. “A protracted crisis had limited resources and certainly affected the choice of activities to attend,” — said in a press release. However, in General, the dynamics of attendance remains positive this year at the Sochi forum has gone to 5% of employees of Russian and foreign companies than in the previous year. This is due to the fact that companies from St. Petersburg have increased their presence on the forum three times; many participants came from Simferopol.

The most expensive ticket purchased for the period of the forum was the ticket from Moscow to Sochi and back cost 189 thousand rubles, according to “Aero club”, and the most expensive hotel accommodation in the period of the forum cost a business traveler to 135 thousand rubles.

What will happen to the ruble

Taxes, business climate, investment is still the topic of concern to the business either permanently or on a longer term, but right now the performance of companies is affected by fluctuations of the ruble. At the meeting, Medvedev with business most of the talk was about exchange rates, said the General Director of “metalloinvest” Andrey Varichev. “The ruble is unsettling to us all, because we know that in the budget forecast laid in the course of 67.5 rubles per dollar, the budgets of companies were formed on this basis and is calculated on the income of foreign companies”, — he said. “Exporters don’t like the current exchange rate, it’s hard on them. At the same time from different companies sounded different proposals: to lower the exchange rate, and strengthen”, — shared with David Yakobashvili.

In February, the Treasury began buying currency on the market, the revenue from additional oil and gas revenues. These purchases has already increased exchange rate stability, said in an interview Monday, Finance Minister Anton Siluanov. “Without it [the measure], the movement rate would be more volatile and predictability, predictability would be worse than now,” he said.

A shortage of qualified personnel

Although the Prime Minister said that unemployment problem in Russia, he also acknowledged that in the coming years the country may face a “shortage of skilled workers”. According to Medvedev, the reason for including a demographic hole 1990-ies.

Professional staff in Russia is, and there are talented young people willing to work, but they want to get a decent salary, said Deputy Prime Minister Olga Golodets. In a country where nearly 5 million people receive salary at the level of the minimum wage and the total payroll is only 23% of GDP (in other countries much higher), the most qualified no motivation to work at home and entrepreneurs have no incentives to invest in technological re-equipment, Golodets said at a session on productivity, and later in an interview. “In order to keep talented young people should be well paid and to think about investments, including investments in human capital in the workplace,” said Deputy Prime Minister.

There is no reduction in funding of universities is not stated in Sochi the Minister of education and science Olga Vasilyeva on Tuesday, responding to an opinion about the underfunding of universities. “Let me, probably all calm. In 2017, the education allocated 24 billion rubles. more than last year. The total amount under the program of development of education approached 600 billion rubles Funding of the state task for higher education institutions increased by 5.7%. In numbers, it is 14.6 billion,” she said.

Agreement for 200 billion

Deputy Prime Minister Dmitry Kozak estimated the volume of agreements concluded at the forum “Sochi-2017” 200 billion rubles, excluding agreements, protected by trade secret. The previous Sochi forum has signed agreements worth more than 700 billion rubles, but since it’s only been six months and the event was reformatted from the International investment forum in the Russian investment forum.