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Russia - France
What are themaineconomic challenges
that Russia will be confronted with
during the coming decade?
There will be many challenges, the
main one obviously being a return to
a better growth rate. The country is
growing at a rate of 1.5 % to 2 %,
which is insufficient, as it must carry
out an in-depth modernisation of its
economy and infrastructure. This has
been the topic of the debates that
have taken place in recent months
and which are continuing in the
circles of power in Moscow. We can
agree that the context is both good
and unsettled.
The prices of raw materials, and
especially of oil, are rather high, with
a barrel of oil costing approximately
75 dollars, which leaves considerable
margins of manoeuvre for the
Russian federal budget. Vladimir
Putin will be able to alleviate certain
measures, such as raising the age of
retirement.
But the federal budget is only one
aspect, there are other challenges,
such as productivity and the moder-
nisation of the productive apparatus.
All these issues are being dealt with:
the World Cup was seen by the
Russian authorities as a regional
planning project
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.
Another challenge is poverty, with a
rate that had considerably decreased
since 2000, but which has tended to
increase again in the two last years,
with a strong social demand from the
population. The macro-economic
imperatives and the first decisions
made by the Russian government
express a more liberal vision, of
optimization.
What lessons may be learnt from the
visit of the President French Emma-
nuel Macron to Saint Petersburg, in
May 2018, for the Economic Forum?
Let us not forget that France is a
major economic player in Russia. It
was the number one for direct
foreign investments flows in 2014,
2015 and 2016; French companies
therefore continued to invest while
the country was undergoing the
crisis.
They believe in the potential of this
country, and this will have positive
effects in terms of perception by
Russian partners. It can also be
observed that Vladimir Putin never
misses an opportunity to say that
French investors stayed. Thirty-five
companies on the CAC 40 index are
present in Russia, but also many
family-owned companies in the retai-
ling sector and in logistics.
They have been here for a long time
and they do good business. Franco-
Russian economic relations are very
diversified: they go from agriculture
and agri-food to civil nuclear energy
and aeronautics, despite the sanctions.
These relations have been preserved in
a complicated political context.
The hardest part is probably behind
us. However, there are some uncer-
tainties that do not come from
Russia, but from the United States,
especially because of the sanctions
that were imposed by the American
Treasury on 6 April 2018.
However, certain companies are
confirming and increasing their pre-
sence, like Total which is extending
its partnership with Novatek through
the Arctic LNG 2 project.
In May 2018, EDF won a contract for
developing a sustainable neighbour-
hood in Moscow. This is a first for the
group in Russia and a benchmark for
smart cities in the country. French
Tech works also very well in Moscow,
and finds a very favourable breeding
ground there, thanks to Russian
engineers and mathematicians.
Many Franco-Russian partnerships
work well despite an unsettled global
context.
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Oil and gas prices rise, boosting the Russian economy.
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