Russian leader to open Davos 2011

Russia is launching a massive privatisation programme

Russia will take centre stage at Davos later on Wednesday when Dmitry Medvedev opens the World Economic Forum.

The president’s trip has been overshadowed by a bomb blast earlier this week at a Moscow airport which killed 35 people.

Mr Medvedev shortened his trip, but did not cancel it.

His appearance before the global business elite is seen as a major opportunity to outline his country’s massive privatisation programme.

But investors risk being put off by domestic politics.

Vladivostok, which I visited for this month’s Russia Business Report, was seen as a commercial backwater for decades, but is now considered a potential opportunity.

It is on the threshold of the fast-growing economies of Asia – 9000 km from Moscow but just 1300 km from Beijing.

The mineral riches of nearby Siberia and oil pipelines both travel West to markets in Europe.

But now with growth in Asia burgeoning, the city has found renewed significance as Russia’s shipping gateway to the East.

“Cooperation between Russia and Asia is already very diverse and includes natural resources such as energy and ore,” says Alexander Abramov at the Far Eastern Centre for Economic Development.

“And of course, Russia will export everything the growing Chinese economy needs.”

As the country works to redefine its trade relationships, it is also trying to woo foreign capital to boost the economy.

Vladivostok’s proximity to markets in the East make it an ideal launchpad.

The Apec summit, a high profile meeting between Asia-Pacific leaders will take place here next year.

Russia is desperate to present itself as open, modern and innovative but what concerns foreign companies most of all is the country’s rule of law.

The recent second verdict against former oil tycoon Mikhail Khodorkovsky was seen by many foreign investors as a reminder of the all-pervasive nature of politics in Russia.

Russians themselves are well aware that how the country wishes to be perceived often finds itself at odds with how it is actually viewed.

Even within the Kremlin, the chief economic advisor to the president has admitted to an image problem.

This year, with an ambitious privatisation programme to get underway, Russia needs to put its best foot forward.

Its central role at the World Economic Forum in Davos will give important insights into how it plans to do that.

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