Transcript Sovereign Wealth Funds

Investment Policies in
Russia: The Northern
Dimension
by
Rainer Geiger
Deputy Director, OECD Financial and Enterprise Affairs
The Northern Dimension Forum
St. Petersburg
13 May 2008
Investment trends and policies
in the Russian Federation
• Strong performance in inward and
outward investment
• Recent policy developments
• The 3rd OECD Investment Policy Review
• A strategy for business climate
development for the Northwest Federal
District
2
Russia’s inward and outward
FDI 2000-2007
3
Russia’s FDI inflows: Sectoral
distribution, 2007 (%)
4
Russia’s FDI: Country of origin
2007 (%)
Total
of which
Cyprus
Netherlands
Luxembourg
United Kingdom
Germany
US
Ireland
France
Switzerland
Virgin Island
Austria
Ukraine
Belarus
Others
FDI inward stock
FDI outward stock
100
100
34.4
34.2
0.7
3.3
4.4
3.5
0.4
1.5
1.6
2.8
13.2
13.5
51.9
4.7
1.9
8.1
0.6
0.3
0.0
0.9
4.7
5
13.4
Russia’s FDI in comparison with
emerging market economies
Indicator
Brazil
Russia
India
China
FDI inflows (in billion USD)
18.8
28.7
17.5
78.1
FDI outflows (in billion USD)
28.2
18.0
9.0
17.8
FDI inward stock (in billion USD)
214.3
93.9
67.7
699.5
FDI outward stock (in billion USD)
107.5
75.2
21.1
82.3
FDI inflows per head (in USD)
102
201
16
60
FDI inflows as per cent of gross fixed 10.5
investment (%)
16.3
6.4
6.8
FDI inward stock per head (in USD)
1160
660
60
530
FDI stock as per cent of GDP (%)

inward
20.1
9.5
7.3
25.7

outward
10.1
7.6
2.3
3.0
50
80
31
12
Outward/inward FDI stock ratio (%)
Source: EIU (2007), World Investment Prospects to 2011: Foreign Direct Investment and the Challenge of Political Risk, September 2007.
6
Recent policy development
• Strategic sectors
• Strategic corporations under state
control
• Russia’s policy framework for energy
investment
7
The Northwest District: Regions
with unexploited opportunities
• Access to large markets
• Natural resources
• Good industrial and technological
base
• Potential for trans-border investment
8
Challenges to improve the
policy environment in the
regions
• Public sector integrity and corporate
governance
• Policy transparency
• Modernisation of regulations
• Infrastructure
• Human resources – SME
• Access to finance
9
A business climate
development strategy
with a Northern dimension
• Based on the OECD Policy Framework for
Investment
• Benefiting from experience with regional
programmes (e.g. the Investment Reform Index of
the South East Europe Investment Compact)
• Backed by Knowhow of OECD / World Bank
• Interactive process of local / regional partnership
10
The Policy Framework for
Investment
• Identifies 10 core policy areas and 82
questions to help governments maximise
the benefits of international and local
investment
• Promotes tailor-made solutions regarding
good practice
• Is the most comprehensive multilaterally
endorsed investment instrument to date
11
How to take advantage of
the PFI
• Self evaluation
• Comparative benchmarking in a regional
context
• Policy coherence at government level
• Public-private sector dialogue on reforms
• The Business Climate Development
Strategy
12
The business climate development
strategy – Key features
The Business Climate Development Strategy (BCDS) as a whole is targeted at…
 Improving the business environment to increase investment and
competitiveness, thereby contributing to growth and employment
 Supporting a dynamic and sustainable reform process
It is a systematic approach involving three basic steps:
Define baseline
Set
Priorities
Implement
13
BCDS Framework
Methodology
 Methodology successfully applied in South East Europe: Investment Reform
Index
 Breakdown of Chapters in Sub-dimensions and Indicators
 Indicators with five assessment levels, ranging from least to best practice
 Self-assessment by Country Economic Team and external assessment by OECD
experts
BCDS Creating value for the
Northwest District
1. Provide a single comprehensive document defining a business climate
reform strategy based on best practice in OECD countries;
2. Leverage existing evaluations of the business climate including those by
the OECD, The World Bank and the European Commission;
3. Support leadership in federal, regional and local governments to ensure
coordination and consensus on priorities for reform throughout a
broad range of policy areas affecting the business climate;
4. Involve continuously government and private sector throughout the
process to increase buy-in for business climate reform;
5. Identify priorities for action and provide support for implementation.
16
Conclusions – Moving forward
• Increasing the competiveness of the region
as a location for investment
• Identifing investment opportunities and
increase sectoral competitiveness
• Improving policy coherence and capacities
for implementation
• Developing effective tools for
communication
17