Russian business is going the way of diversification, because it is tired of waiting for the return of easy profits from the oil industry, Russian Economy Minister Alexei Ulyukayev said after yesterday's meeting with Vladimir Putin on the sequestration of the 2016 Russian budget.
"Diversification, efficiency, i e. reduction of costs, and investment are three synonyms of the same process. And I think that now we have some evidence in the economy that we are on the right track," the minister said at an investment Forum in Sochi.
"We are reducing costs, we do not focus on the oil blessing. There are no more illusions that we will sell four million vehicles a year. We are freed from illusions and going the way of diversification, but of course, we need investment," he stated.
He noted that "this year Russian companies have received about 41% more in eight months than the previous year."
Sberbank CEO German Gref said that the oil and gas industry is one of the few points of growth and opportunities for the diversification of the Russian economy. "The oil industry is what feeds us all, so it is necessary to take care of it, and yet try imposing taxes very carefully. God forbid it isn’t sustained," he said.
"In my opinion we do not have a lot of growth points, where we could diversify our economy. The oil and gas industries are serious points of growth that allow us to diversify the economy. And we should help oil companies, and 'not shear the last wool', and maybe even push them into petrochemistry and chemical utilization of natural gas processing," Gref suggested.
Russian Finance Minister Anton Siluanov said that in recent years Russia has become used to obtaining high oil revenues, resulting in increased budgetary spending. According to him, it is necessary to "skim the cream" from the oil industry.
The chief economist at MTS-Bank, Evgeny Nadorshin, told Vestnik Kavkaza that it is difficult to judge the preferences of those who invest in the Russian economy. "The first half of the year usually doesn't show the entire investment in the country, and we have no data for the second half of the year yet. The investments in the country are gradually dropping. It is also clear that, because of the tax maneuvers, the oil sector is much less attractive for the companies and for those who are only going to invest in it," the expert said.
However, he pointed out that there are other sectors which are experiencing problems with investments. "The transition of investors to the real economic sector has not been seen yet. There is a small revival in projects related to the non-oil economy, but in fact the commodity sectors that are linked to oil – metals, coal, even wheat – are feeling much better today. There are some individual niches which receive investments, but I do not see a mass transition process in the non-oil sector," the chief economist at MTS-Bank said.
The Deputy Director of the Institute of Energy Strategy, Alexey Belogoriev, in his turn, noted that according to preliminary data, the investments in the commodity sector have remained almost unchanged in ruble equivalent compared with last year. "Investments reduced, mostly in difficult-to-extract resources, offshore, mining and exploration, which are focused on the long term. There will be no significant reduction in the current production, the finalization of well-developed fields, processing and partial modernization of the refinery. The most capital-intensive projects, which cannot seriously affect the level of production and the indicators of development in the coming 2-5 years, are being cut during the crisis," the expert said.
Belogoriev also doesn't see major changes in the structure of investments in the oil and gas industry. "The structure of the economy will not change fundamentally in the next few years. The investments in oil and gas industry will be substantially higher than investments in other sectors. Still, in order to change the structure of investment it is necessary to create a business climate which would attract investments to those industries that are not related to raw materials," he pointed out.
