Danish Businesses Soon to Increase Investment into Russia's Northwest

Danish businesses intend to increase the volume of investment into the economy of northwest Russia in the near future. This was announced today by representatives of the Danish Manufacturers' Confederation at a meeting with the delegation of the Northwest Federal District, led by the Plenipotentiary of the President of the Russian Federation in the Northwest Federal District, Victor Cherkesov. The confederation is the largest association of entrepreneurs in Denmark, and brings together the leaders of 110 businesses. At the meeting, perspectives for collaboration between regions of the Northwest Federal District with Danish manufactures were under discussion.

Over the last 20 years, member-businesses of the Confederation of Danish Manufacturers have already carried out several projects in Russia. The total volume of investment into these projects has exeeded USD 400 million. Most of the investment goes to St. Petersburg, the Leningrad Region and Kaliningrad. In the near future, another ten Danish pork-manufacturing businesses intend to begin work in the Novgorod Region.

Victor Cherkesov explained the economic situation in the Northwest Federal District to the Danish entrepreneurs. In particular, he admitted the peculiarity of the situation, in that changes in Russian legislation, bringing it to world market norms, has resulted not in growth, but in a drop in the volume of investment. The total volume of foreign investment in Russia now stands at around USD 34.4 million, less than in 1997, and two or three times less than the volume which the Russian economy could potentially receive. In connection with this, Cherkesov noted the attractiveness of the Northwest for investors.

In their turn, the Danish entrepreneurs mentioned the unevenness of the economic development of regions of the Northwest Federal District, and were especially interested in the situation in the Kaliningrad Region. Cherkesov said that the establishment of the special economic zone (the Kaliningrad Region) has shown that the special economic zone law has been ineffective and must be changed. Despite the existence of the special economic zone, the standard of living and level of investment in the Kaliningrad Region were until recently one and a half times lower than the Russian average. After the launching of the federal programme and the reshuffling of the region's leadership, the situation changed: the speed of economic growth in the Kaliningrad Region is currently three times higher than the Russian average.