An international economic forum in the home of the 2014 Winter Olympics may feel the effects of recent State Duma elections as officials focus on new ideas for equitable regional development in the country.
The 2016 Sochi International Investment Forum at the Main Media Centre of Sochi's Olympic Park in Sochi, Russia, on Sept. 29, 2016. Source: Alexander Ryumin/TASS Host Photo Agency
Investment specialists from around the world will gather in the Black Sea city of Sochi from Sept. 29-Oct. 2 to discuss how to improve Russia’s regional economies.
This year’s international investment forum is expected to attract more than 7,000 people from 25 countries, according to Deputy Prime Minister Dmitry Kozak, speaking on the eve of the Forum to the RIA Novosti news agency. Kozak said that 70 Russian governors have already confirmed their participation in the investment event, one of the country’s premier economic forums.
"Since the inception of the forum, the event has become well known not only as a platform for attracting foreign capital, but also as a convenient way to develop public-private partnership projects and attract funds from Russian investors," said Timur Nigmatullin, a financial analyst for investment company Finam.
At the 2015 Sochi forum, 417 agreements with a totaling value of 415 billion rubles ($6.5 billion) were signed.
The restrictions on access to Western financial markets has pushed Russian companies to look for alternative sources of funding, and the forum is a good place to begin this search. "A key theme of the upcoming forum will be attraction of investment," said Sergei Khestanov, macroeconomics advisor to the CEO of Otkrytiye Brokerage.
The 2016 forum will be influenced by the recent elections to the lower house of the Russian parliament – the State Duma – and the related possibility of a shake-up of local government officials, Nigmatulin said. This uncertainty could affect the total number of submitted investment projects and the nominal volume of deals made in Sochi.
The governor of Krasnodar Territory, the region in Russia’s south that includes Sochi, said earlier that he would present about 25 percent fewer investment proposals compared to last year.
Russia’s major international economic forums, which take place in different regions of the country throughout the year, play an important role in bringing local business and regulation into line with global practices.
Thanks to discussion at the St. Petersburg International Economic Forum in 2015, for example, the Russian government launched a project office to reform key sectors of the economy. The decision came out of an experience shared at one of the sessions by former British Prime Minister Tony Blair.
"Usually, economic forums are focused for the most part on discussion of the issues related to the development of Russian and world economy, to the development and strengthening of ties between foreign and Russian participants," said Alexander Yegorov, a senior analyst with the TeleTrade group of companies.
Reliance on regions
The Sochi forum has traditionally focused on regional investment, and this year’s event is likely to be no different, judging by the participation so many governors.
"Despite the involvement of federal officials and international guests, the forum in Sochi is of a regional character," said Georgy Vashchenko, head of Russian stock market operations at the Freedom Finance investment company in Moscow, noting that the program emphasizes issues important to the regions.
One task facing participants is finding ways to reduce the vast differences in the socio-economic development of Russian regions and between different social groups. The organizers and stakeholders of the forum hope to tackle this problem by increasing cooperation between regions and attracting new development to poorer regions.
Other topics at this year’s forum are likely to include the development of import substitution and the promotion of export potential, including in the field of tourism services, according to Nigmatullin.