OWC Interview with the Russian Chamber of Commerce and Industry
with President Sergey Katyrin
The Russian Chamber of Commerce and Industry supports foreign investors in Russia. The Chamber's work focuses on the removal of economic barriers. President Katyrin presents the institution in an OWC interview and gives an assessment of the economic relations between Russia and the West.
Mr. Katyrin, what exactly makes the Russian Chamber of Commerce and Industry (HIK Russia) interesting for international investors? Every project begins with the selection of a location, a partner and a general framework. HIK knows all these areas very well. We focus on the internationalization and integration of Russia into the global economic networks and support our member companies in removing obstacles in the common economic area from Lisbon to Vladivostok. With the help of our advisory board, which includes the Chambers of Commerce and Industry of the EAWU member states, we are working to simplify customs procedures and the use of Carnet ATA customs documents and to standardize the requirements for products in the EU and the EAWU. Recently, Russia also joined a number of international organisations for the accreditation of certification bodies and testing laboratories, paving the way for simplified recognition of product conformity. These are first steps towards removing barriers. In this context, we hope that our subsidiary SOYUZEXPERTIZA can become a reliable certification partner for German companies in Russia and the EAWU.
Trade turnover between Russia and the EU has decreased significantly in recent years. How are trade relations developing today? The decline in trade turnover has not only been stopped - we have now returned to the original volume of trade with many countries. Of course, we also had to look for new business partners because of the sanctions. Russia has therefore become more active on the Asia-Pacific market, in Latin America and in Africa in recent years. These regions are particularly attractive for marketing Russian products. In the meantime, for example, we have been able to report strong trade sales with the ASEAN countries, especially in the mechanical engineering and chemical industries. In the last five years, the EU share of Russian trade sales has fallen from 49 percent to just under 43 percent, while the share of the CIS, BRICS and EMEA states has risen from 40 percent to around 45 percent.
Five years ago, the West introduced sanctions against Russia.
How do you assess the new economic realities? According to a study by the US bank Morgan Stanley, Russia ranks second worldwide in terms of financial stability. This puts us ahead of China and South Korea and 15 times higher than Turkey, for example. Thanks to our government's economic and financial policies, we have been able to adapt to the sanctions, which unfortunately have a negative impact on the traditionally close partnership between Europe and Russia. However, US sanctions continue to be a source of great uncertainty - this also applies to the European and German economies. They endanger many important international projects, for example in the energy sector. In our view, Russia should therefore concentrate on developing and diversifying its own economy and on greater integration into world trade - in areas that are not affected by sanctions. Russia is currently trying to implement a whole series of measures, such as improving the business climate, promoting small and medium-sized enterprises, new infrastructure and industrial projects and increased localisation. We at HIK are actively involved in all these areas.
Your Chamber traditionally supports small and medium-sized enterprises. How do these companies develop under the prevailing conditions? Small and medium-sized enterprises should become a driver of economic development in Russia. The share of these companies in the Russian GDP is growing continuously and is already about 30 percent. This figure should at least double. For this we need long-term and favourable loans, coupled with positive changes in the business climate, which President Putin is also actively calling for. A small entrepreneur should be given the feeling of being needed and supported. We have put forward a number of proposals that have been included in the Business Climate Transformation Plan drawn up by the Ministry of Economic Development. The plan is part of the Guidelines for the Government of the Russian Federation until 2024. I regard this as a success which shows that it is possible to have a positive influence on the domestic political agenda and thus on international relations.
The topic of digitisation is becoming increasingly relevant in Germany and Russia. How do you assess the development in this area? Germany and Russia complement each other perfectly in the field of digitisation. In 2018, exports of Russian IT services rose by 19 percent to USD 10.5 billion, exceeding domestic sales for the first time. HIK supports a number of initiatives to improve the business climate in the IT sector. In recent years, more and more Russian high-tech companies and start-ups have been looking for foreign partners. In 2018, a delegation of Russian IT companies, supported by our German representative office, took part in the Russia conference "Ostwestfalen trifft Russland" (East Westphalia meets Russia), organized by the Bielefeld Chamber of Commerce and Industry and welcomed over 1200 participants. The event was a further confirmation of good cooperation between German and Russian companies, especially in the development of joint, competitive solutions and digitisation projects.
Mr. Katyrin, thank you for the interview.
The interview was conducted by Dimitri Kling