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St. Petersburg forum starts in Heiligendamm

MOSCOW. (RIA Novosti economic commentator Yelena Zagorodnaya) -The 11th St. Petersburg International Economic Forum is officially opening in the morning of June 9 though, in fact, it started during the G8 summit in Heiligendamm.

The summit on the German Baltic coast adopted a declaration to minimize any national restriction on foreign investment. The forum on the Russian Baltic coast will start implementing it with contracts.

The Chinese economy appeared high on the Heiligendamm agenda. Many events are underway in Russia on different aspects of its economic partnership with China.

As he arrived at the summit, Russian President Vladimir Putin began with a detailed account of his country's economy. On Sunday, he will make a detailed statement in his native city on Russia's economic prospects. People close to him say the text of his St. Petersburg address was drafted no less meticulously than his latest state-of-the-nation address. Many forum guests have come to St. Petersburg with just one goal - to get firsthand knowledge about new trends in Russian economic policy.

Investment will be prominent in that policy. Present-day Russian corporate investments abroad amount to $140 billion, and foreign investments in Russia to $151 billion.

Investment will be the central theme of the St. Petersburg forum. Top executives of the world's biggest corporations, who have a no smaller impact on global developments than political leaders, have come to Russia to make investment contracts, which will amount to no less than $3.3 billion, as Kirill Androsov, Russian economic development and trade deputy minister, expects. Finance Minister Alexei Kudrin thinks the total will be even greater - $4 billion.

The forum has gathered 6,000 participants and guests from 60 countries, including 10 presidents and 11 prime ministers plus the host country's entire Cabinet, 60 regional governors and 220 executives of major transnational companies. Many business leaders, for example, executives from Ernst & Young, Boeing, Shell, BP and Total, will meet with President Putin.

Industrial investment projects will have high priority on the agenda. Many concern the automotive industry. For example, Suzuki expects to sign a contract for a Grand Vitara SUV assembly plant near St. Petersburg, Peugeot Citroen to manufacture the Citroen C4 and the Peugeot 308 (future plant geography is still vague), and Volvo to make its trucks in Kaluga. South Korean Hyundai and the Chinese Beijing Automotive Industry Holding are not planning to make any deals but intend to hold construction project talks at the forum.

The greatest forum puzzle is whether Aeroflot will sign a contract with Boeing for 22 Boeing 787 Dreamliners. These pioneer long-range jumbo jets are partly Russian - Russia's VSMPO Avisma supplies titanium for its numerous parts, which make 10% of every liner's total weight, while 300 engineers at the Boeing Russian branch work in R&D on crucial liner assemblies.

Aeroflot intended to purchase the Boeings a year ago, but suddenly changed its mind and chose Europe's latest Airbus 350 XWBs. Russian-U.S. tensions have receded now that President Putin offered an Azerbaijani ABM deployment option to the G8 summit. So Boeing has a good chance of getting a major contract with Russia's mammoth airlines.

Whatever their significance to the world economy, industrial tycoons are not the only prospective contractors gathering at the forum. Samsung, PepsiCo, SABMiller brewery, and the Quarzwerke and Henkel Bautechnik construction material manufacturers will negotiate Russian-based projects.

The London Stock Exchange was the only delegation to make a flat out refusal to appear in St. Petersburg - possibly, in retaliation for Moscow ignoring the latest Russian Economic Forum in London. Even without it, the forum will be the most representative corporate gathering for several years. It promises to be even more impressive than Davos-2007.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.