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The Rt. Hon. Patricia HewittRussian Economic Forum |
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Chairman, Your Royal Highness, Minister, Ambassador, Ladies and Gentlemen.
I would like to thank the Russian Economic Forum for inviting me to speak to you today – it is the first Russian event I have addressed since becoming Secretary of State for Trade and Industry last summer. Alongside the British companies represented here, I am delighted to see so many who have made the trip from Russia – on behalf of Her Majesty's Government, "dobro pozhalovats", it is a real pleasure to welcome you. It demonstrates the strong relationship between our two countries – a relationship which is getting stronger and which is no doubt helped because, on a wide range of issues, our two nations share a broad understanding. Something which has been particularly valuable since the appalling events of 11 September – Russia's support of the international coalition against terrorism has enabled us to work together to try and build a safer world for all our citizens. It demonstrated the strengths of our links and a mature relationship based on mutual understanding which is underpinned by the warm personal rapport between President Putin and Prime Minister Blair. And I would like to say how much this Government values the opportunity to maintain the dialogue taking place at all levels and that we look forward to future high level exchanges. For the UK, Europe and the rest of the world, a strong and prosperous Russia is in all our interests. From my viewpoint, I have watched with interest the extensive programme of economic reforms that is changing the face of Russia, creating the conditions for long term growth and reducing oil price dependency. We have been impressed by the success of the new Tax Code, with its lower business and personal tax rates and which have resulted in greater compliance and increased revenues. We look forward to seeing the development of a free market in non-agricultural land following the recent introduction of the new Land Code. Business will welcome deregulation measures to reduce the bureaucratic burden. And the modernised Labour Code will help to establish the framework for a more flexible employment market. It is also encouraging that the Russian Government recognises that further steps need to be taken, not least reform of the banking and electricity sectors and provision of production sharing agreements in the energy sector. Balancing the Federal Budget and renewed competitiveness following devaluation of the rouble in 1998 have helped produce solid economic growth in the last two years. Taking Russia towards the goal of greater international economic integration. Membership of the WTO would strongly underpin these reforms and the UK Government will continue to support Russia as she implements the changes necessary to join that Organisation. WTO membership should make Russia a more attractive market for foreign companies and investors to do business, bringing much needed skills and investment. Through effective implementation of WTO disciplines I look forward to Russia building on the achievements to date. Although we appreciate that there is still much work to be done, we should not under-appreciate the progress that has already been made. Progress that is changing the view of many in the west. As the Russian proverb sets out so well – you will be judged not by your words but by your actions. The scale of the task of transforming Russia into a global trading partner is huge, and will involve some tough decisions, but progress has been remarkable and the benefits of stability and restructuring are now beginning to show. Not least in attracting major western names and brands to Russia. Drawn to the country as a marketplace and as a partner by its geography and major transport routes from Western Europe as well as a highly-skilled workforce. Some of the companies moving into the market are British – indeed we are the fifth largest foreign investor in Russia. The initiation of the Partnership and Co-operation Agreement in 1997 has helped to increase trade – but for progress to continue we all recognise that Russia has to implement all the elements of the Agreement. This will only help to increase confidence in trade and investment with Russia. Trade and investment continue to grow – UK exports of goods to Russia increased by 34 per cent last year to £900 million. Increasing numbers of British companies are taking advantage of good opportunities for doing business in Russia. In consumer goods. In the high tech sector. In engineering. And more firms are beginning to consider investment opportunities there. We are exporting goods, services and know-how in many sectors. In foodstuffs – Cadbury's factory in Russia is the company's largest outside the UK. Unilever recently opened its new teabag factory. In oil and gas – both Shell and BP have long-term interests or have substantial investments in Russia, working with local partners and benefiting local industry. Shell is the leading operator on the Sakhalin 2 project which is already in production. British Trade International, through Trade Partners UK, is available to offer advice and support to companies looking to move into new markets. Helping to create the personal as well as the business relationships on which trade is built and which contribute to our wealth and prosperity. But which also make the UK stronger socially and culturally. The British Council is also facilitating links between British and Russian companies – Russian biotechnology opportunities were shown to Scottish companies last October. And in December a British Computer Games exhibition in Moscow showcased some leading edge British computer products to young people and Russian companies. Over the last three years more than 550 Russian management trainees have gained valuable experience in placements with British companies under the Russian President's Management Training Initiative. At the end of June the British Council is due to open a new information centre in Rostov. The Department for International Development, through its Britain Russia Development Partnership, is also working closely with the Russian authorities and other agencies to support economic and social modernisation. But there is always more that we can do. The medium and long-term business cover provided by the Export Credit Guarantee Department should help to increase trade with Russia. There is real support for companies wanting to investigate the opportunities for trade and investment in Russia. Next week, representatives from several Russian Chambers of Commerce are visiting the UK to see how our chambers operate. In May, Trade Partners UK is supporting a visit by Russian companies to the Machine Tool exhibition in Birmingham. There is an ongoing programme of British trade missions to Russia and British groups exhibiting at trade fairs in Russia. I urge you to take advantage of events like these to explore the business opportunities that exist. But we also need to remember that it this is not one-way traffic. Imports from Russia last year increased by over 37 per cent to £2.1 billion. And last year, the Russian oil company Yukos purchased the distinguished British engineering company John Brown Hydrocarbons. This is not just an example of inward investment but an example of partnership – leading, we hope and trust, to more overseas business for John Brown and more revenue for Yukos – revenue that will be reinvested in both Britain and Russia. This partnership is represented here today in the person of Lord Owen, Chairman of London-based Yukos International, who will be speaking afternoon. If recent history has shown us anything, it is that we live in a truly interdependent world – and trade is just a small part of this – bringing nations, businesses and individuals closer together. In today's economy where business and investment are ever more mobile, our home marketplace is the global marketplace. That is why events like the one taking place today are so important. I am sure that you will take advantage of it and continue to build the links and networks that make trade work, and I wish you every success as you do so. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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