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Russian PM pitches for investment at Davos

Russian Prime Minister Dmitry Medvedev played up his country as a safe bet for investors in a speech at Davos on Wednesday, but a major new study raised concerns about Russia's thriving corruption and dependence on energy exports.

Russian PM pitches for investment at Davos
Dmitry Medvedev, Russian prime minister, at World Economic Forum on Wednesday. Photo: Johannes Eisele/AFP

Speaking at the World Economic Forum (WEF)  in the Swiss mountain town, Medvedev highlighted Russia's economic performance — including 3.5 percent growth last year —  and said the country had set ambitious targets for boosting foreign investment.
 
"Russia is an open country, safe, we are part of the global economy and global political processes," Medvedev said.

He hopes to see investment grow by 10 percent annually to help Russia reach a target of five percent annual growth.
 
Russia, which is leading the G20 this year, is on a major charm offensive in Davos, sending its biggest-ever delegation to the annual gathering of political and business leaders in the Swiss ski resort.
 
In addition to Medvedev, a slew of senior Russian officials and top business executives are on hand to meet and mingle with the 2,500 participants.
   
But amid all the gladhanding, a new WEF report that involved more than 350 experts has raised difficult questions for Russia's boosters.
 
The report, "Scenarios for the Russian Federation," laid out pessimistic possibilities for the country's future, with lower energy prices leading to social instability and higher ones to complacency about reforms.
 
 "The Russian economy is at a crossroads," the report said.

"Shifts in the global economy are affecting Russia due to its strong reliance on oil and gas exports," it said.

"Revitalizing its economy requires significant changes."
 
It highlighted persistent concerns about Russia's reliance on energy exports, growing discontent over its wealth gap and "high levels of corruption".
 
"Corruption and undue influence are among the biggest problems for doing business in Russia," the report said.

"Most international assessments rank Russia as one of the most corrupt major economies in the world."
 
In his speech, Medvedev dismissed the report's bleak forecasts as "unrealistic" and insisted Russia was serious about making reforms.
 
"The top priority of the Russian government, my top priority as prime minister, would be increasing efficiency of all public bodies," he said.
 
"It would be wrong to say we are standing still.," Medved said.

"I believe we have already achieved much of what we planned," he said, pointing to the stabilization of Russia's population decline and its joining of the World Trade Organization.
 
"We have very ambitious goals in the investment field, to increase the volume of investment from 20 to 25 percent of GDP, to increase investment in transportation, in energy infrastructure . . . and foreign direct investment would be instrumental in achieving this goal."

Speaking at a round-table discussion on the report, the head of Russia's largest bank Sberbank, German Gref, said it reflected a wider image problem damaging the country.
 
"What we need is to improve our image, because we are far better than we look" in international business rankings of countries, he said.
 
"Russia has potential beyond these risks, huge potential for growth," Gref said.

"In Russia there is a huge opportunity and a vast market with all of its resources to really get very high returns."
 
Others on the panel said it was key for Russia to push ahead with reforms and deal with fundamental problems if it wants to improve its image and attract investment.
 
"The failure to make reforms would be a burden on businesses . . . and would result in the stagnation of the Russian economy," former finance minister Alexei Kudrin said.

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DAVOS

Switzerland: 2021 Davos summit shifted to Lucerne in May

The World Economic Forum announced Wednesday that its postponed 2021 Davos summit, themed as "The Great Reset" in the coronavirus crisis, will take place in Lucerne, Switzerland from May 18 to 21.

Switzerland: 2021 Davos summit shifted to Lucerne in May
Participants at the World Economic Forum at Davos in 2020. Photo: FABRICE COFFRINI / AFP

The annual gathering of the world's political, economic and business elite traditionally takes place in January against the idyllic snowy backdrop of the Swiss Alpine village of Davos.

But it was postponed due to the Covid-19 pandemic and, charged with remodelling the world economy in the wake of the crisis, will now be held 125 kilometres (75 miles) away in the plush Burgenstock resort overlooking Lake Lucerne.

“The meeting will take place as long as all conditions are in place to guarantee the health and safety of participants and the host community,” WEF spokesman Adrian Monck said in a statement.

“The meeting will focus on the solutions required to address the world's most pressing challenges. “Global leaders will come together to design a common recovery path, to shape 'The Great Reset' in the post-Covid-19 era and rebuild a more cohesive and sustainable society.”

Hybrid format

The WEF announced in June that the 51st edition of its annual meeting would take place in a hybrid format, then in August said it was being delayed for several months to reduce any risks to participants from the coronavirus pandemic.

The Lucerne summit will combine both in-person and virtual elements, with participants linked to a network of around 400 hubs worldwide to incorporate dialogue with the WEF's “young global shapers, to ensure openness and inclusion”, said Monck.

The summit will be preceded during the week of January 25 by digitally-convened high-level “Davos Dialogues”, when global leaders will share their views on the state of the world in 2021.

The novel coronavirus has killed more than 1.04 million people while at least 35.5 million infections have been recorded since the outbreak emerged in China late last year, according to a tally from official sources compiled by AFP.

The pandemic has also triggered a global economic downturn, though the International Monetary Fund said Tuesday that while it is far from over, it will not be as bad as originally feared thanks to a flood of government spending.

The World Trade Organization said likewise, forecasting a global trade contraction of 9.2 percent this year, rather than its previous “optimistic scenario” prediction of 12.9 percent.

But global trade will then grow by only 7.2 percent next year, rather than the previous 21.3-percent estimate issued in April, the WTO added.

Swiss cases rising

The WEF announcement comes as Switzerland announced Wednesday that daily coronavirus cases had jumped over the 1,000-mark for the first time since April 1, when the peak of the pandemic's initial wave began to recede.

Swiss Health Minister Alain Berset has urged the country to “get a grip” and be more rigorous in applying the basic measures to control the spread of the virus.

The 2020 edition of the WEF summit, hosted in January just as the world was beginning to become aware of the new coronavirus spreading in China, drew more than 50 heads of state and government to Davos.

It focused on themes of sustainability and finding a more inclusive model for capitalism. US President Donald Trump and Swedish teenage eco-warrior Greta Thunberg were among its top speakers.

The WEF said it aims to be back in Davos for 2022.

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