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The Rt. Hon. Baroness Symons of Vernham DeanRussia Open to the World Conference |
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Chairman, Ministers, Distinguished Guests, Your Excellency, Ladies and Gentlemen Thank you very much for inviting me here to speak today. On behalf of Her Majesty's Government I would like to extend a very warm welcome to our Russian friends who have travelled to London for this event and the "Russia Open to the World" exhibition at the Barbican, and to the British companies represented here today. The very distinguished speakers at this conference underline the strong relationship which has developed between our two countries. ST PETERSBURG We are delighted that the Russian government and the City of St Petersburg has decided to hold such an important event in London ahead of next years tercentenary of the founding of St Petersburg. In fact next year is a double celebration as it also marks the 450th anniversary of Anglo-Russian diplomatic relations. Our two countries have many things in common. We both possess a wealth of culture and history, of which we are all proud. Our cultural heritage has, over the years, shaped our societies and influenced our standards. Our cultures have also played their part in both the UK and Russia developing as recognised powerful trading nations and it is therefore a particular pleasure to be invited to speak at this conference. As we all know, St Petersburg was founded by Peter the Great who wanted the city to become Russia's "window on the west". His vision of a modern Russia integrated with the rest of Europe is alive today. In recognition of the importance of next year's 300th anniversary, the British government is supporting a unique programme of events entitled "UK at St Petersburg" which will be launched on Thursday at the Russian Embassy. The spirit that surrounds St Petersburg's tercentenary and its reinvigoration as a modern city for the new millennium is a potent symbol of Russia's development and standing in the world today. We are all in no doubt that for the UK, Europe and the rest of the world a strong and prosperous Russia is in all our interests. REFORM We know from our own experience in the UK that reform is not easy. But the ambitious programme of economic reforms driven by President Putin is changing the face of Russia, creating the conditions for long-term growth and reducing oil price dependency. The leadership and enthusiasm of President Putin and the Russian Government has driven the excellent progress already made. This is reflected in the new tax code, with lower business and personal tax rates. Greater compliance and increased revenues are already being seen. There are moves in the right direction in the provision of workable Production Sharing Agreements in the energy sector. A new Land Code is creating a free market in non-agricultural land. De-regulation measures will reduce the bureaucratic burden on business. And a modernised Labour Code is laying down the framework for a more flexible employment market. All of these are very welcome steps on the road towards a strong, secure, market economy. As the Russian Government itself recognises, additional steps must be taken. Further structural reform is needed to underpin the economy and strengthen Russia's recently granted market economy status. This transition towards sustainable long-term growth will also be bolstered by progress in the reform of the banking and electricity sectors. Of course, the reform programme will also be strongly reinforced by Russia joining the World Trade Organisation, and the UK Government continues to provide support to Russia as she implements the changes necessary to join. Indeed, it is in the interests of all for Russia to join the WTO as soon as the conditions and terms are right and I welcome the significant progress that has already been made in this area. We very much look forward to welcoming Russia as a member of the WTO family. BRITISH TRADE INTERNATIONAL If I may, I would like to give you a little background on the British Government network responsible for developing trade and investment opportunities overseas. Many of you may already have come across British Trade International in building your relationships with British business. British Trade International was established three years ago as the UK government's trade and investment organisation. It operates through two arms, Trade Partners UK, which assists UK companies selling in overseas markets, and InvestUK, which helps foreign companies locate in the UK. Trade Partners UK has already helped many thousands of companies based in the UK to export their goods and services around the world. My appointment as Minister for International Trade and Investment represented a first for joined-up government – bringing together at Ministerial level the Department of Trade and Industry and the Foreign and Commonwealth Office, which - through British Trade International - support exporters and investors, at home and overseas. The Prime Minister was very clear when he appointed me. He wanted exporters and international investors to have a single voice within government. And he wanted me to raise that voice whenever I can. Our services to exporters are more clearly focused on helping British companies to meet the challenges of an increasingly competitive global market place. We see our strengths in day-to-day practical help and assistance to small and medium-sized enterprises to ensure that business is well placed to respond to market movements and developments. WHY TRADE? In Britain, we regard trade as a vital part not only of our history but also far more importantly of our national identity and the growth of our society and economy for the future. And today, the need to promote international trade is a crucial aspect of our economic and political policies. International trade creates closer links with the rest of the world. It helps create personal as well as business relationships – and in doing so assists international relations. It broadens our skill base as well as our educational and cultural diversity. Businesses engaged in international trade tend to be more productive and competitive than those which aren't. They spend more on innovation. They are more capital intensive. And their labour productivity is higher. And we know that this is not just coincidence – these benefits flow directly from the decision to export. We should not forget the importance of international trade to the UK's economy. We have maintained our percentage share of world trade for the last twenty years - despite the challenges of globalisation. Exports make a huge contribution to our wealth and prosperity – some 30% of our GDP last year - and the development of a market such as Russia provides a unique opportunity for our businesses to trade and invest. INWARD INVESTMENT Just as exports encourage the development of best practice, so inward investment also involves not just the transfer of capital, but of people, ideas and technology. And it is essential if we are to prosper in the rapidly changing world economy. We have worked hard to maintain an open, competitive and lightly regulated environment in which investors can develop their business and protect their assets. We have long been the prime location for inward investment in Europe - the second most attractive location in the world after the United States. Last year saw record figures for inward investment reflecting the UK's position as the business centre of Europe. It is worth noting that many of our major exporters are drawn from the ranks of our inward investors. In fact, around half of our exports derive from them. In many cases we've done this in regions where traditional industries have declined. For example, foreign investments have made a major contribution in terms of new jobs and new wealth to South Wales, against the background of decline in the coal and steel industries. Throughout all that, the fundamental principle for us has been that it is the investors - not the government - who own the investment, and we can best help them contribute to our economy by supporting them, but not interfering with them. These facts remind us that we live and work in a truly global economy where business and investment are ever more mobile. That is why events like this are so important, where we have the opportunity to meet each other and form relationships with people and companies who can become our partners in the global marketplace. Bringing people together is crucial. However clever our telecommunications are – in the end it is a handshake, the eye contact and the person-to-person contact that makes business work. LINKING GOVERNMENT AND BUSINESS Our trade development strategy also recognises the inextricable link between government and business. Co-operation at all levels helps to create an international trading environment in which UK business can compete and thrive. The creation of a level playing field for trade is central to this Government's agenda, whether it is through international fora such as the European Union and the World Trade Organisation, or through our men or women on the ground in our overseas commercial teams. By creating the right environment for trade to flourish and providing advice and support to British businesses overseas – wherever it is needed – we too can help UK business and the UK economy as a whole. STRENGTHENING THE BILATERAL RELATIONSHIP Our bilateral relationship goes from strength to strength. This has been demonstrated by the warm personal relationship and exchange of visits between President Putin and Prime Minister Blair over the last few years, the last of which was in Moscow in October. The UK-Russia Intergovernmental Steering Committee on Trade and Investment is a practical example of the exchanges which take place at many different levels between the governments of our two countries. We very much value the opportunity to maintain that dialogue with senior members of the Russian Government and look forward to future high level exchanges, as well as events like this which help the policies we as Ministers decide become a reality and a constructive tool in building our joint future. With its huge population, diverse economy and reforming industrial base, Russia is potentially one of the biggest markets in the world. UK exports last year reached £900 million. In just the first seven months of this year, UK exports to Russia have risen by 27%. But we want to do more. And so Trade Partners UK has embarked on a sector-focussed programme to raise the profile of Russia amongst experienced UK small and medium sized exporters. This activity will draw on the resources of Trade Partners UK, both here in the UK and in our three Overseas Missions in Russia, in Moscow, St Petersburg and Yekaterinburg. This is in addition to the seven outward trade missions and eleven trade fairs to be supported by Trade Partners UK this financial year. And in turn I am pleased to see British firms showing their confidence in Russia's long-term economic performance by investing in larger numbers. Over 400 British companies are already established in Russia, many of which are keen to maintain their presence for the longer term. Russia's experience with foreign investment is comparatively new. And its record in attracting direct investment is so far modest. But it is encouraging to hear increasingly regularly from investors themselves stories of successful partnership with Russian companies. You will have just heard Sir Brian Stewart speak about Scottish and Newcastle's successful partnership with Baltika, Russia's largest brewer. Other leading investors in Russia include BP, Shell, Cadbury and Unilever. Latest figures show the UK is the fifth largest foreign investor in Russia and our firms are looking to increase their involvement with Russian companies, to mutual advantage. They have the strong support of the British Government. We look forward to the numbers of investment success stories steadily increasing. And during my planned visit to Russia in the Spring of next year, I hope to see for myself some of these success stories. Last Autumn, I was delighted to announce that the Export Credits Guarantee Department was to resume Medium-Long Term cover for Russia. More recently, in October this year, Patricia Hewitt, the Secretary of State for Trade and Industry, was pleased to announce the resumption of ECGD's Overseas Investment Insurance cover during the successful sixth meeting of the UK-Russia Intergovernmental Steering Committee on Trade and Investment, in London, which she co-chaired with Deputy Prime Minister Kudrin. But we also need to remember that trade is not a one-way street. Imports from Russia last year increased by over 37 percent to £2.1 billion. Lord Owen, our Chairman today and also of Yukos International, will underline the importance of strong partnerships between the UK and Russia when he reflects upon last year's purchase by Yukos of the distinguished British engineering company John Brown Hydrocarbons. So I leave you with a final thought. International trade is good for all of us. It has huge potential for all economies whatever their state of development. Businesses which choose not to compete overseas – who say that it is too difficult, or not worth investing in the skills needed to do so – forget one vital thing. There is no safe domestic market any more. Domestic markets are simply part of someone else's global market. I wish you every success during the programme of events taking place this week and hope many of you will find that it is the start of fruitful partnerships which will benefit your business – and the UK and Russia's trade and investment relationship as a whole. I look forward to the development of that relationship, and wish you all the best in your future co-operation. Spasiba. |
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Other speeches by The Rt. Hon. Baroness Symons of Vernham Dean
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