Russia wants “normal, good” investment climate

Russian stocks have plunged and the ruble has come under heavy pressure from nervous investors since Moscow sent its troops into Georgia last month to repel an attempt by Tbilisi to take back two pro-Russian separatist regions. “Seventy-five percent of the fall in market indexes is the consequence of the international financial crisis, while 25% is from our domestic problems including the consequences of the war in the Caucasus,” Medvedev told a meeting of the Valdai Club, a panel of foreign experts specializing in Russia. “Of course we have no plans to create problems for investment cooperation with the West, and our Asian partners,” Medvedev added. “On the contrary, we did and will do everything to have a normal, good investment climate in Russia.”

The Kremlin leader said that protection of property rights -- one of his key pledges when taking office in May -- was an essential part of this. “We only now start realizing how important it is for us to ensure a comprehensive protection of property of both Russian citizens and foreign investors,” he said.

Investors say a government attack on a New York-listed coal producer Mechel and suspicions of a Kremlin hand in a row between Russian and British owners of TNK-BP oil company have cast a shadow over the investment climate in Russia, in addition to the Georgia conflict. Medvedev played down the importance of the market falls.

CREATING INVESTMENT CLIMATE

Medvedev came to power on promises to diversify the economy, which was heavily dependent on the energy sector, and to introduce the rule of law in a country with a long tradition of red tape and corruption. Speaking to the Valdai Club guests, he said defending property rights was the key element of his efforts to break the tradition. “Russia throughout the 20th century lacked the normal institution of property,” he said. “Our task is to create it, give it a proper regulation and protection. Perhaps, this is a cornerstone of a normal investment climate,” Medvedev added. “The rest does not matter, even military action however paradoxical this may sound.”

Medvedev’s remarks sounded more conciliatory than those the Valdai Club members heard the previous day from his powerful predecessor Vladimir Putin, who is now Russia’s prime minister. As opposed to Putin, Medvedev avoided strong criticism of the West, where debates about how to handle resurgent Russia are under way.

Russia has reacted painfully to suggestions by the United States and some EU members to punish it with sanctions for invading Georgia and recognizing its two breakaway regions. But Medvedev made clear that Western pressure will not stop Russia’s resurgence. “Russia has its own place, its mission,” he said. “Russia is a big state, a permanent member of the UN Security Council, a member of the Group of Eight and a fast-developing economy.” (Reuters)