RUSSO-BRITISH ECONOMIC RELATIONS

Economic co-operation between Russia and Great Britain continues to thrive and consistently demonstrate resilience with regards to the complex political environment in our bilateral relations. Britain remains one of our largest trade and investment partners as British businesses  - and there are over 1000 UK companies operating in our country today – maintain and continue to expand a leading and welcome presence in Russia. It is a remarkable success story and a hope for the future of the relations between two countries.

Our bilateral trade has continued to rise at record levels in recent years and its volume more than doubled in 5 years since 2003. In 2007 only it grew almost one fifth to reach USD 16.6 bln.

Regarding investments, in 2007, as on repeated occasions in previous years, Britain became number one investor in Russia. The current British investment to Russia grew in 2007 almost 4 times on 2006 to reach USD 26.3 bln. While the accumulated British investments in the Russian economy as of 1 January 2008 stood at USD 29.3 bln or 13,3 % of the total accumulated foreign investment in Russia! Together with Cyprus and the Netherlands Britain completes the list of the top three foreign investors in our country. Russian retail, manufacturing and metallurgical industries, mining, transport and communications, real estate, all benefit from the British capital.

An increasing bilateral inter-action in the financial services’ sphere is giving a vital and timely impetus to the economic ties between our countries contributing to their importance in the global financial markets. All the three leading UK banks - HSBC, Royal Bank of Scotland and Barclays - followed British businesses into Russia last year and are currently building a network of corporate and prospective retail operations there. While in addition to the VTB and Vnesheconombank that have well-established presence in London the number of the leading Russian financial companies that are licensed to operate on the UK stock market is already approaching a dozen.

2007 also proved to be another breath-taking year for the Russian companies raising capital at the London Stock Exchange. Today there are more than 55 Russian companies both listed or trading their securities at the LSE, of which 14 joined the LSE last year and raised altogether USD 18.2 bln – more than half of all the money raised by the Russian businesses at the stock exchanges in 2007. The volume of trading of the Russian securities at the LSE jumped by 50% and exceeded USD 360 bln in 2007. The three Russian companies that have raised capital at the LSE in spring 2008 are among the first harbingers of the confidence returning to the markets while the pipeline of the prospective Russian IPOs looks impressively strong.

The aspiring goal set by the Russian leadership to develop Russia into one of the top five world economies by 2020 through diversification and modernization of our industrial, transport and social infrastructure will be virtually impossible to achieve without an increased foreign investment built on strong business partnerships and shared economic interests. Today in many respects Britain leads the way and sets the trend for other foreign investors in Russia. As the bilateral business ties go from strength to strength and continue to serve as a key cornerstone of a wider Russo-British co-operation, our nations will further benefit from such a long lasting relationship based on traditions, trust and mutual respect.     

 

Address by H.E. Mr. Yury Fedotov
at the RBCC Business Forum 2009 "Russia - Open for Business"