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Economics
03
What Russians
I believe that the new president’s economic policy who cannot take care of themselves – children, the elderly the gains will be the biggest. For this reason, it will be very
should meet the primary concerns of both business and and the incapacitated. important for the new president to develop a dialogue with
Can Expect
ordinary citizens, because the former’s success depends It is crucial to continue the four national priority projects. business that will produce feedback and provide effective
on the latter’s prosperity. There have been stumbling blocks in their implementation solutions.
Business and Power
Businesses are interested in the investment climate. In and there have been rumours of corruption at the bot- The greatest threat to Russia’s steady advance lies in its
order to improve it, it is necessary to reduce taxes and tom level, when the funds were spent in the regions. But imperfect institutions of power and management. The
bring the rules of the game closer to world standards. This these problems can be overcome. The important thing is will of even the brightest minds cannot guarantee steady
will encourage businesses at home and abroad to invest that these projects have produced results, and people advance. We need institutions that will allow society to
IGOR YURGENS more in Russia, and will promote economic growth. believe that the government is ready and able to improve regulate itself. We have to create a genuinely independent
Ordinary citizens are interested in how the government agriculture, education, health care and housing. The new judicial system. The right to property should be immutable.
VICE PRESIDENT OF THE RUSSIAN
UNION OF INDUSTRIALISTS AND
will redistribute national wealth. If the poor in depressed president will concentrate on developing these projects, This is an absolute must for investors. Nobody should be
ENTREPRENEURS
regions see no changes for the better, social tensions are and it is probably worth extending them and choosing new able to come in and say: “Give us your business, we’ll run it
bound to impede growth. On the one hand, it is essential to directions. better.”
encourage business to develop and make profits without Dialogue with entrepreneurs people will play an important Needless to say, we will not remedy such far-reaching
pushing it into the shadow. But on the other, it is necessary role here. Not a single country has developed without thor- problems in a single presidential term, but we must at least
to collect taxes for the broadest possible support of those ough consultations with businesspeople, who know where make a breakthrough in these areas in the next four years.
Food for a Hungry World With world grain stocks tumbling and prices rapidly rising,
Russia seeks to get its abandoned countryside back into production
Country to Benefit
from Growth in
Russia’s Role in a
Organic Food
Just a decade ago, Sergei
Lisovsky was a highly
Possible Food Crisis
successful — and at times
controversial — adman and
showbusiness manager. But
a few years ago, he left the
glamour of Moscow to invest
it all in land and ruined farms.
Within this short space of time,
“Love comes and goes, but he has managed to turn these
you can’t go without food.”
Russia’s main food suppliers National grain production
plots of land into prosperous
This saying, which was agricultural operations.
popular in 1970s Russia, is
taking on new relevance as
ALEXANDER KIDENIS
world food prices escalate MOSCOW
and the planet slides toward
a possible food crisis. “Russia is set to become
Cocoa beans in Africa, beef a leading agrarian power, ”
in Europe and rice in China says Sergei Lisovsky, the EVGENIA SMOLYANSKAYA_RG
have all seen significant and once-powerful entertain-
sustained price increases, ment mogul who now de-
but the most alarming votes most of his time to hor- ploys at least 40% of the pop-
situation is in the grain ticulture. ulation and occupies 90% of
market. Lisovsky believes the 15 the country’s land. This, in
years since the end of the So- Lisovsky’s opinion, means
ALEXANDER PROTSENKO
INFOGRAPHICA RIA NOVOSTI , WWW.VISUALRIAN.RU viet Union have been was a that the sector needs sub-
EKONOMIKA I ZHIZN blessing in disguise for Rus- stantial government assis-
MOSCOW
sia. With agriculture gener- tance. In the case of Russia,
ally neglected due to the av- however, such help has tra-
Historically, Russia was an Russia produces little over hopes that problems in the According to the UN Food ing living standards and alanche of domestic problems, ditionally amounted to just
agrarian country and one of half that and is far behind world’s agricultural markets and Agriculture Organiza- fast-growing populations, he argues, the country finds 1% of budget spending, com-
the biggest exporters of food. the top five grain producers may give a boost to domes- tion, in 2007 the world’s especially in places like itself in a unique situation. pared to 5% in developed
Of course, so was the United (Argentina, Australia, the EU, tic agricultural production. stocks of grain, especially China and India, is driving “No other country has so countries (and up to 20-25%
States. New York’s Broad- Canada and the U.S.). More- Today, many farms in the wheat, dropped to the low- up demand and changing much arable land unspoiled in many developing coun-
way was originally a cattle over, Russia may soon face provinces are taking losses est level in 25 years. eating habits. People in by chemicals”, says Lisovsky, tries).
trail, and Wall Street got its the problem of rising import and are kept open only be- At the same time, the China and India are no lon- “Russia was spared much of On the other hand, many
name from the wall built to food prices, particularly meat cause they perform a “social Economist food index, pub- ger content to live on rice, the chemical era and its soil Russian businesspeople who
protect the residents from and milk, as a result of grow- function,” providing jobs and lished since 1845, showed and are moving towards a has remained clean. We are initially made their fortunes
pigs foraging for food in the ing grain prices. a livelihood for the local pop- prices hitting an all-time Western diet rich in meat. among the few large countries in extractive and processing
surrounding meadows. For its part, the Kremlin ulation. high. The combination of ris- The result is a worldwide that are now in a position to industries are now beginning
Today, unlike the U.S., paradox: food prices tend to grow environmentally clean to realize the potential of ag-
Russia’s role in the world soar in the years of large, products.” riculture. With them, the sec-
food market is more that of
Facts and Figures on food production
rather than poor, harvests. Lisovsky also stresses the tor is also becoming rapidly
a consumer than a producer. In this context, food pro- fact that, for the first time modernized — production ca-
True, in 2007 the country ex- duction may indeed become since the Soviet Union, Rus- pacities in the active farming
ported 16.7 million tons of Russia produces 1,172 pounds facing the world, according to than 18,000 rural communi- even more profitable than sia now has a new legal ag- sector are aged between 3 and
cereal (up 49.5 percent from of grain per capita, the same the “Global Risks 2008” re- ties have disappeared from the oil and gas business. The ricultural framework. The 5 years, compared with 25-30
2006). The country’s exports as the European Union. But the port, are a systemic financial the map of Russia. The aver- Europeans are embarking on government has also adopt- years in Europe and 30-40
of food and agricultural raw EU feeds its half a billion people crisis and rising prices of food age wages of farmers are one an ambitious project to ed a program for agriculture years in the United States. In
materials earned it over $9 by applying effective farming and energy third of those of city residents. bring the use of biofuel to development. Under the five- other words, Russia outstrips
billion, 64.5 percent more technologies (crop yields are Experts in Davos rated the One in every three young peo- 10 percent by 2020. This will year program, the state un- the market leaders in terms
than in 2006. However, in around two tons per acre), and probability of food shortage in ple in rural areas is out of work. put further stress on food dertook financing the con- of production capacity and
2007, Russia’s imports, in- Russia reaches the same result poor countries in 2008 at three Only six percent of college and production, as arable land struction of rural roads — technology.
cluding agricultural raw ma- with crop yields 2.5 times low- points on a five-point scale. university graduates return to is turned over to fuel which are practically non- “The results are obvious —
terials, were still three times er for a population three times The main reasons are growing work in the rural areas. crops. existent — and funding rural the pace of growth in pig
greater than exports, amount- smaller. population, rising living stan- Far-sighted investors have community projects. The farming, poultry breeding and
ing to $27.5 billion (up 26.2 For the first time, food short- dards, production of biofuel Last year’s world harvest was wised up to the coming amounts are small consider- crops,” says Mr. Lisovsky. “If
percent). ages became a topic of discus- and climate change. 1.5 billion tons, of which only “ bonanza.” Domestic and ing the size of the country you take poultry, we can dis-
To be self-sufficient in food, sion at the World Economic 106 million was used to pro- even foreign businesses have — a little over 100 billion ru- pense with imports within a
a country must produce close Forum in Davos. The key risks Over the past 15 years, more duce bioethanol. been quietly buying up ar- bles (about $4 billion) for year. If you take pork, I think
to a ton of grain per capita. able land in Russia “just in 2008. But Lisovsky was anx- we will no longer need imports
case.”
-
ious to stress the importance within two to three years. We
of the move as a first step. are already exporting wheat.”
FURTHER READING…
“We will revise the program He ends with a bold predic-
in parliament many times tion: “In five years’ time we
NIKOLAY SILAYEV / Staff writer, Moscow / THE MODERNIZATION OF POWER / Expert magazine No. 9, March 3, 2008 / eng.expert.ru more before we are done,” will not only be able to feed
ALEXEY GORDEYEV / Russian agriculture minister, Moscow / RUSSIA KEEPS GRAIN EXPORT DUTIES / Russian Financial Control Monitor/macroeconomics, March 6, he emphasized. ourselves but many other
2008 / www.fcinfo.ru Russian agriculture em- countries as well.”
-
Global Russia
Second Banking Forum of CIS Countries & proaches to civil education. There will be a focus both American commercial ties and to increase coopera-
Eastern Europe on tradition and on incorporating information technolo- tion between the countries’ business communities.
Business Calendar
April 24-27, 2008, Vienna, Austria gies. The idea of holding this conference in San Francisco
The Banking Forum is a platform of CIS-CEE coopera- Russia’s Education Minister, Andrei Fursenko, is ex- was suggested and supported by California head-
tion in the banking and financial sectors. The Forum in pected to attend the event. quartered Intel, HP, Cisco Systems, Oracle,
National Business Media Forum Vienna is a “shortcut” to pool the interests of and expand www.admhmao.ru/english/index.htm Chevron, Sun Microsystems and other companies
April 23, 2008, Moscow, Russia cooperation between the Eastern and Western banking that have been operating in the Russian market for
Topics will include the development of journalism and communities. Russian–American Business Forum decades.
mass media in the field of business and economics. http://bankingforumvienna.com/index.php (RABF) forums.amr.ru/detforum,000-01,57,0,0,1,8.htm
Participants will include legislative and executive offi- June 23-24, 2008, San Francisco, U.S.
cials, representatives of public associations, governors International Congress “Civil Education: Organizers: Russian Managers Association, Cham-
and mayors and other representatives of national and Tradition and Innovation in the Information Age" ber of Commerce and Industry of the Russian Fed-
Find more in “Global Calendar”
regional business media. April 27-May 1, 2008, Khanty-Mansiysk, Russia eration, San Francisco Global Trade Council.
http://eng.tpprf.ru/ Congress participants will discuss innovative ap- The objectives of the event is to promote Russian-
at www.rbth.rg.ru
Tell us what topics to cover!
We welcome letters
to the editor
editor.usa@rg.ru
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