Russia's flagship economic forum offers scant hope of foreign investment revival
ST PETERSBURG, Russia, June 19 (Reuters) - Foreign direct investment into Russia has fallen sharply, U.N. data published on Thursday showed, and Russia's premier economic forum in St Petersburg this week is offering scant hope of a revival, with Western investors largely absent.
Russia is hosting the St Petersburg International Economic Forum for the fourth time since invading Ukraine in February 2022, an offensive that precipitated sweeping Western sanctions on Moscow and a widespread corporate exodus from the country.
Soaring defence spending has propped up Russia's $2 trillion economy since then and Moscow, turning its back on the West, has sought partnerships with so-called "friendly" countries like China, India, Turkey and nations across the Middle East.
But for all the talk of new strategic partnerships, foreign holdings in Russia have almost halved to $596 billion since the invasion, according to central bank data, and FDI inflows fell by 62.8% year on year in 2024 to $3.35 billion, UN Trade and Development data showed on Thursday.
Sergei Aleksashenko, a former deputy governor of Russia's central bank now living abroad, said few serious businesses would consider Russia as an investment destination even if the war were to end tomorrow.
"Everyone can clearly see the situation with property rights is getting worse every day," Aleksashenko told Reuters.
The Kremlin has seized about a dozen foreign-owned businesses in the last three years and quickened the pace of domestic asset seizures, with prosecutors claiming Moscow's Domodedovo Airport and grain trade Rodnie Polya.
"Stopping the war itself does not significantly reduce the level of political risks," Aleksashenko said, pointing to market risks as well.
President Vladimir Putin has said the state should only seize assets where Russia's national security is jeopardised.
"The real question is: where are the investors?" said one Russian participant of the forum who spoke on condition of anonymity.
The West has shunned Russia since 2022, and though sanctions make investing in Russia all but impossible, U.S. President Donald Trump's softer stance towards Moscow has led some investors to keep an eye out for opportunities.
The forum in St Petersburg, a city founded by the tsars as a window to Europe, for years had a Western-looking feel, but it is now returning to its original role as an event primarily for Russian businesses to network with politicians.
"The reason the West came to the forum was because Russia was sizeable, growing and profitable," Denis Denisov, managing partner at financial communications firm EM, told Reuters. "You don't find these three components very often."
Now, said Denisov, attending his 18th St Petersburg forum, for most participants the gathering is an opportunity to develop government relations and is less about PR.
"The American Chamber of Commerce (AmCham) has been pushing hard for the Russia-USA panel, there are loads of European businesses still operating in Russia," Denisov said. "They're here, they're lobbying, just quietly."
Speaking after that panel, AmCham head Robert Agee said there needed to be some sort of end to the conflict before U.S. companies would consider coming back to Russia.
Major multinationals PepsiCo (PEP.O), opens new tab, Nestle (NESN.S), opens new tab and Mondelez (MDLZ.O), opens new tab are among those still operating in Russia, although they have scaled back their business there.
Putin met Indonesian President Prabowo Subianto on Thursday, as Moscow looks to strengthen ties with Jakarta, while Russian officials are turning to Brazilian and Chinese companies to plug gaps left by departing Western firms. But UNCTAD's FDI data shows that actual investment in Russia is waning.
But even with Russia's economy on the brink of recession, according to Economy Minister Maxim Reshetnikov, there is domestic money to spend after two years of elevated defence spending fuelled growth.
Russian funds have great options, such as collaborating with wealthy individuals that want to invest, rather than keep funds on deposit, said one Russian investor at the forum who declined to be named. People are also jostling for position before the war ends, the investor added.
The same is true of Western investors who feel that the wind is gradually changing, said Jean-Jacques Coppee, founding partner of CoppeeLaw & Associates, who is due to speak on the Russia-France panel on Friday.
Sanctions have made cross-border payments a "nightmare", Coppee told Reuters, but should opportunities arise, investors will take them, even if others in the West object on moral grounds to engaging with Russia.
"The rule is pragmatism," he said. "Pragmatism and opportunism."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
28 minutes ago
- The National
Will a group form to take forward constitutional convention plans?
READ MORE: John Swinney to host independence debate at SNP National Council in Perth However, with the petition for decolonisation now with the United Nations, it is up to every person who has the interests of an independent Scotland at heart to meet the challenges that face us. We need to prove beyond all reasonable doubt to the UN that we want independence and above all, that we are able and willing to form a new Scotland and its institutions in our own image. To do so, we need to call for and form a Scottish constitutional convention now and not at some distant time when it is suitable to some faceless civil servants who are doing it because they have been pushed into it by their English masters. We need answers to a great number of questions before independence and not after it, and above all we need to know what sort of country are we going to be setting up so that everybody is singing from the same sheet. With such a convention we can answer fully the question about currency, fiscal needs, the institutions et al of our country. Then the English Unionists won't be able to trip us up when it comes to a referendum, which is bound to happen when the UN agrees that we are a colony of England. READ MORE: SNP now seem content to manage Scotland's decline within the Union When the convention has been called we will be one more step along the way towards independence and it will make it harder for a prime minister of England to stand in our way. It is important to have representatives from all walks of life involved with the convention. Until then we are at the mercy of Downing Street and the English establishment. As there have been a reasonable number of letters here on the topic of calling for a convention, I say it is time we put that rhetoric into action. Effectively, I would say that we need to form a group of competent people who have the acumen to take the notion of a convention to the next step and get things up and running. Until then, nothing is going to happen and we are liable to remain just another colony of England. Who amongst the readers are capable of writing reports, asking important questions and knowing how to arrange meetings with groups and associations? Alexander Potts Kilmarnock GOD knows how much 'zooming' and 'teaming' has been done in the name of the independence struggle in recent years in lieu of face-to-face, cheek-by-jowl forums. If you add to that emails, texting, twittering and blogging then is not difficult to discern the principal reason that both esprit de corps, cohesion and solidarity remain sub-optimal in the movement and in society in general, much to the satisfaction of those who are rightly frightened of 'gatherings' of enthusiasts. I had the privilege to attend the summer conference of the Independence Forum Scotland (IFS) in Perth on Saturday and the way it was convened and conducted greatly advanced my grasp of several topics, from the cultural to nuances of energy policy, mainly rendered to me by folks sitting in close proximity to me. I could ask them about matters that have perplexed me and vice-versa. READ MORE: 'Scottish cringe' persists despite evidence of our distinctive culture I received tuition augmented by a three-dimensional 'model' involving non-verbal gesturing and the vast array of the facial expressions that evolution has come up with to facilitate both communication but also bonding among homo sapiens. The whole day was 'value for time t hat the vast majority of Zoom and Teams encounters fail to provide. The promised but not-now-to-be-delivered independence convention is yet another strategic failure by the SNP leadership to engage with the wider body of the kirk despite entreaties by their own rank-and-file and nearly everyone else and their auntie. It was suggested that two brief, cheap residential independence 'academy' weekend events for activists and prospective candidates could define the core curriculum and perhaps advance the principle reconciliation between friends who collaborated for several decades. This initiative received an enthusiastic response among among many quarters but a very tepid response from the celebrated, but as yet ineffective, party 'strategists'. In short, what we need is the microcosm of the IFS transformed to the macrocosm of a convention embedded in a cultural nationwide movement open to the man in the street, young and old. I fear it is too late for that now, so blundering on will be the tactics. A patriotic SNP leadership could have made such a big difference. There may be yet time! Dr Andrew Docherty Selkirk MICHAEL Shanks thinks that Scotland will lose out on jobs if we do not support nuclear reactors (Shanks 'won't apologise' for GB Energy funding raid, Jun 16). We are better served with renewables, as nuclear requires small numbers of engineers at a single site whereas renewables can be very small and spread out, along with maintenance staff all over the place. Thus enabling rural and island communities have well-paid jobs and not having the young people of these places leaving. In the same edition of the paper, North Yell screams out at what small island and rural folk can do if the impetus is nurtured and admired (Islanders borrowed £8.3m to build own wind farm – and it's paying off big time). M Ross Aviemore
Telegraph
2 hours ago
- Telegraph
Russian tech billionaire claims to have fathered 100 children
As birth rates around the world tumble, one Russian technology tycoon is doing his best to reverse the trend. Pavel Durov, the entrepreneur behind controversial messaging app Telegram claims he has fathered more than 100 children and has promised to split his fortune between them equally when he dies. Mr Durov, the 40-year-old social media and cryptocurrency entrepreneur, said he would divide his estimated $14bn (£10bn) wealth between his biological children and dozens of others conceived through sperm donations. Mr Durov has six children by three partners but has fathered many more through donations. Mr Durov said in a rare interview he had recently written a will that would provide $170m to each of his children. 'I wrote my will very recently,' he told France's Le Point magazine. 'I decided that my children would not have access to my fortune until a period of 30 years has elapsed. 'I want them to live like normal people, to build themselves up alone, to learn to trust themselves, to be able to create, not to be dependent on a bank account. 'I want to specify that I make no difference between my children: there are those who were conceived naturally and those who come from my sperm donations. They are all my children and will all have the same rights.' Mr Durov has previously said he had been donating sperm for 15 years and is now the father of 100 children in 12 countries. Last year, a clinic in Moscow began advertising its supply of Mr Durov's sperm and offering free IVF for women willing to have a child with 'one of the most famous and successful entrepreneurs of our time'. The AltraVita clinic said: 'Pavel Durov is willing to finance all the IVF protocols that use his sperm. It is a very generous contribution to society from someone who wants to help those dreaming of becoming parents.' Mr Durov's 100 children rank him among the world's top sperm donors, though he is not the most prolific. Jonathan Jacob Meijer, a Dutch YouTuber, reportedly fathered 1,000 children, according to Netflix, although he insists it is only 550. Mr Durov is not the only technology entrepreneur to advocate having a large number of children. Elon Musk is reported to have at least 14 children, who he has referred to as his 'legion' and has pushed 'smart people' to have more offspring. 'A collapsing birth rate is the biggest danger civilisation faces by far,' Mr Musk said in 2022. In the US, a 'pro-natalist' movement has emerged amongst conservatives urging people to have more children in order to tackle declining birth rates. 'I want more babies in the United States of America,' JD Vance said in his first address as vice president in January. Mr Durov founded VKontakte, known as Russia's Facebook, before he left the business and Russia under pressure from the Kremlin in 2014. He later founded Telegram, an encrypted messaging app used by more than 1bn people, as well as a cryptocurrency. Telegram has repeatedly faced criticism for its light-touch content moderation and last year Mr Durov was charged in France with complicity in spreading child abuse online and allowing drug trafficking. He has denied the charges and told Le Point they were 'totally absurd'. Mr Durov runs Telegram, which only has around 50 staff, from Dubai, although since his arrest in France he has been barred from leaving the country. Born in the Soviet Union, he now has French and Emirati citizenship. Despite his vast paper fortune, he is known for his minimalist lifestyle, strict diet and veganism. He told Le Point he did not own a 'house, yacht or private jet', although he enjoyed staying in 'beautiful hotels'. The billionaire is also fitness guru. He told Le Point he begins his day with 300 push-ups and 300 squats and posts videos to his Instagram of his ice baths. His arrest last August at Le Bourget airport fractured a previously friendly relationship with the French state. Mr Durov's French citizenship application was fast-tracked by Emmanuel Macron, an active Telegram user, who had previously personally spoken with the billionaire over the app. Speaking to Le Point, Mr Durov said he was 'interrogated relentlessly' for four days after his arrest and left in a small cell on a concrete bed, which was kept constantly lit. He said he had been 'very disappointed' with Mr Macron's leadership and described France as a 'Potemkin village'.
BBC News
3 hours ago
- BBC News
Ukrainecast Q&A: Middle East escalation, Russia's threat to Nato and fibre optic drones
As oil prices rise, is escalation in the Middle East between Israel and Iran a positive development for Russia? How successful has Ukraine been in downing Russia's fibre optic drone capacity? And is the Kremlin really intent on extending its invasion beyond Nato borders? Lucy and Vitaly answer all that, and discuss the impact of the latest western sanctions with BBC Verify's Olga Robinson and Matthew Savill of the Royal United Services Institute. The producers were Laurie Kalus and Polly Hope. The technical producer was James Piper. The series producer is Tim Walklate. The senior news editor is Sam Bonham. Email Ukrainecast@ with your questions and comments. You can also send us a message or voice note via WhatsApp, Signal or Telegram to +44 330 1239480 You can join the Ukrainecast discussion on Newscast's Discord server here:
