U.S., Russian, and Ukrainian Governments, EBRD, IFC, World Bank, and private investors (representing over $2 Trillion in total assets) gathered for 3-day Summit on Russian and Ukrainian Investment Opportunities.
The 9th Annual US-Russian Investment Symposium took place on November 1st and 2nd at the Seaport-World Trade Center. The Inaugural US-Ukrainian Investment Symposium took place on October 31st at the Harvard Club. The symposia were attended by investors with over $2 Trillion in assets under management, including top financial and corporate leaders from State Street, Bear Stearns, Baring Vostok Capital, Citigroup, Deutsche Bank, ExxonMobil, Access Industries, Raiffeisen International Bank, Draper Fisher Jurvetson, Philip Morris, Daiwa Securities, Alcatel, Horizon Capital, Vneshtorgbank, Nordic Investment Bank, OPIC, EX-IM Bank, as well as EBRD, IFC and the World Bank.
Founded in 1997 at Harvard University, the US-Russian Investment Symposium brings together Harvard professors, key members of the financial community, and top Russian and American government officials and business leaders for a solution-oriented Symposium designed to illuminate Russia’s investment climate. Drawing upon this legacy and conceived within Harvard, the International Economic Alliance (IEA) was created independently as a non-partisan 501(c)3 non-profit organization to host this annual Symposium and create others based on the successful Russian model.
Participating HBS and other Harvard professors as speakers and moderators this year were Malcom Salter, Rawi Abdelal, Graham Allison, and Robert Lawrence. Also participating were many HBS student volunteers that had special interests in and ties to the region. Throughout the years, many HBS student volunteers have had an opportunity to meet senior government and business leaders from Russia, significantly expanding their post-graduate career opportunities in the region.
The symposium took place amid the recent remarks by presidents George Bush and Vladimir Putin that stressed the need to accelerate the pace of Russia’s economic growth as a timely call to action this year. President Bush sent a personal letter of support to Symposium participants, writing that investment would “strengthen the relationship between Russia and the United States.”
Russia After the Yukos Affair
Andrei Illarionov, Special Economic Advisor to President Vladimir Putin, delivered a keynote message, stressing continuous reduction of government interference into the private sector as a key to Russia’s economic success. Dan Yergin, renowned energy expert and Co-founder of Cambridge Energy Research Associates, agreed that while Russia may have enough oil to meet the global demand for the next 40-50 years, it remains largely up to the Russian government how this feat could be accomplished.
Deputy Economic Minister Andrei Sharonov stressed that besides energy, such sectors as aviation, biotechnology, IT, and nanotechnology represent Russia’s distinct competitive advantage and command more foreign investment inflows in the near future. Many investors stated that Russia is the least known of the BRIC countries with a perceived high level of risk and many opportunities. “You cannot afford not to be in Russia,” voiced Peter Koelle, Chairman of the International Moscow Bank. The remark was seconded by EBRD’s Acting First Vice President Steven Kaempfer who said that European investors are expanding their investments in Russia and that the US investors are thus far missing the early opportunities.
The Russian regional panel discussion focused on dramatic annual returns on investment that have been consistently outperforming those in the developed markets. The discussion participants stressed that emerging market investors are now searching for such opportunities outside of Russia’s larger cities and many noted that these opportunities lie outside of the natural resources sector, referring to the “Commanding Heights” of the Russian economy.
Ukraine After the Orange Revolution
The US-Ukraine Investment Symposium focused on the Ukrainian investment climate in the post-Orange Revolution political environment. Recent signs of stability could revitalize the general investor confidence in the region, as well as create opportunities for private equity investors. Investors agreed that forward progress had been made in business regulation since the revolution. While slower than some exuberant forecasters predicted, reform progress remains strong and largely uninterrupted by the dismissal of the President’s Cabinet in September.
The Ukrainian Government, represented by the Deputy Economic Minister Volodymyr Ignaschenko, stressed that substantial reforms have taken root in regulating exports and certain other industries, while overall macroeconomic reforms remain a priority for EU and NATO membership meetings on target for early next year.
Former Foreign Minister and Ambassador to the U.S., Konstyantyn Gryschenko, grounded speculation about Ukraine’s political volatility by urging a sober, longer-term view of progress over the transition period. Gryschenko, the founder of Ukraine’s Republican Party, pledged further involvement in building Ukraine’s future and is expected to be a major force for change towards enacting favorable business conditions in the region.
For more information about the International Economic Alliance and to get involved with the next year’s symposia, please refer to the IEA website: //www.iealliance.org