Russia Tries To Attract Swedish Investment

Deputy Economic Development and Trade Minister Arkady Dvorkovich urged a delegation of Swedish investors to spend more money in Russia on Monday, showering them with promising economic forecasts. Dvorkovich said economic growth would reach 5.5 percent or even 6 percent this year if growth rates of the past two months hold. The target in this year's budget was 4 percent. Dvorkovich also said at the forum, timed to coincide with a Swedish royal visit, that investment into the economy may grow 8 percent. He added that even a drastic fall in oil prices would not upset the economy and force the government to default on debt. He said a default would only loom if oil prices fell sharply to late 1990s lows of $10 a barrel and remained depressed for three years. Oil is currently selling at closer to $20 a barrel. If oil prices remain stable, Russia will meet all payments and may even have little foreign debt left by 2010, he said. Dvorkovich, after outlining government plans for banking, tax, land, judicial and pension reforms, told the Swedish businesspeople that the investment climate in Russia would continue to improve. He said a plan was being drafted to set up industrial zones with special benefits like tax breaks for foreigners. The plan would be presented to the public in the near future, he said, without elaborating. The Swedish delegation, which included leaders from several trade associations and companies such as Volvo, Electrolux and Ericsson, appeared impressed. The volume of trade between Sweden and Russia, which had been sliding since 1997, rose by a whopping 20 percent year on year to $1.4 billion in 2000. Russia exported about $900 million worth of commodities to Sweden, mostly raw materials, an 18-percent increase from last year, the ministry's Center for Strategic Research said in a statement. However, Dvorkovich said he hoped the structure of Swedish-Russian business would undergo a qualitative change as Swedish giants launch local production, Saint-Petersburg Times wrote.