Russia still open for business: Kremlin top aide
MOSCOW (Reuters) - Russia is open for business and President Dmitry Medvedev's ambitious reform plan is fully on course, a top Kremlin aide said on Tuesday in an attempt to ease investor concerns over the conflict in Georgia.
The war with Georgia and a series of corporate disputes have rocked investor confidence in Russia, prompting a sharp sell-off in stocks, bonds and the rouble as money fled Russia.
But Kremlin Chief Economic Aide Arkady Dvorkovich told the Reuters Russia Investment summit that Medvedev's reforms should be fully implemented and that Russia wanted foreign investment.
"Russia is open for business," Dvorkovich said at the event, held in the Reuters Moscow office. "We need to fulfill those plans which were announced, plans for rather liberal economic policies, in the fullest way possible."
Medvedev, a 42-year-old former corporate lawyer, raised investor hopes when he took over as the Kremlin chief in May that he would move to implement an impressive reform agenda aimed at cementing political stability and boosting prosperity.
But Russia's invasion of Georgia last month raised the perception of Russian risk and fears that Medvedev's plans would be put on hold.
"It is obvious the situation around Georgia had an influence on our markets but the resolution of this conflict, the resolution of the consequences of Georgian aggression against Russian citizens in South Ossetia, will have a positive impact in the near months on the economic trends, on our markets."
Dvorkovich, the Kremlin's 36-year-old point man for investors, said he had spoken to long-term strategic investors who remained positive despite some funds selling securities.
"The situation (around Georgia) is being resolved and I am sure the resolution will take place and then investors will return because strategically Russia is of course attractive," Dvorkovich said.
"And I am not even speaking in financial terms though the price earnings ratios of shares in Russian companies are now extremely attractive," he said.
Investors had already been burnt by Prime Minister Vladimir Putin's attack on miner Mechel (MTL.N) and a dispute between major Russian businessmen and BP (BP.L) over a TNK-BP TNBPI.RTS, Russia's third biggest oil company.
"Uncertainty in relation to certain Russian companies has had an impact on the indexes, for example Mechel - (but) practically the resolution of that process has been concluded," Dvorkovich said. "Also the situation with TNK-BP has been resolved. That problem is also closed."
Medvedev has vowed to make life easier for small business, cut corruption and provide macro-economic stability.
But many investors have been concerned that events in Georgia -- including a row with the West over the recognition of South Ossetia and Abkhazia -- may have distracted Medvedev.
Dvorkovich said Medvedev's plan to boost prosperity and widen economic growth were still on course and that implementing them faster would help restore confidence in Russia.
"If we continue to implement and implement more swiftly those promises that were made, then I think investors will believe the Russian investment case," Dvorkovich said.
"The strategic aim is economic growth for improving people's lives," he said.
Russia's economy, booming for a tenth consecutive year, is forecast to grow 7.8 percent in 2008 with nominal gross domestic product rising to 39 trillion roubles ($1.544 trillion on today's rouble rate) from less than $200 billion in 1999.
But investment banks such as Goldman Sachs have raised concerns about the impact of population declines, corruption and Soviet-era infrastructure on future economic growth.
Dvorkovich said some of those forecasts failed to take account that the Russian population would probably stabilize at the present 141 million, much higher than many had predicted.
He also said the anti-monopoly service would be beefed up to take a tougher line with some businesses and that a package of measures to fight corruption would be introduced to parliament this autumn.
(Additional reporting by Michael Stott, Dmitry Zdhannikov, Robin Paxton and Yelena Fabrichnaya; Editing by Jason Neely)
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