debility it's worse even if prices fall ok that right there where you just said is the reason why the inflation is so-called seem to not get what you're saying because they're looking at a relative price rise for stuff or the supply is shrinking and there's pointing to that and saying that's inflationary but they're missing the point that in the background is this huge credit collapse that is causing a net deflationary effect absolutely all right well that's all it's par for i got to cut her off there. thanks so much for the call foss from the automatic earth for being on the kaiser report and we'll have to have you on again hopefully as soon as possible because you're one of the few people that we've talked on the show that actually sees all the moving parts or thanks so much for being on the show thank you very much for having me it's been a pleasure already well that's all the time for we have on this up a study of the kaiser report with me and stacy herbert and i want to thank our guest nicole foster writes under the name stone lake over there at the automatic earth and if you want to send me an e-mail please do so at kaiser report at r t t v

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broadcasting straight from the heart of the russian capital moscow to you this is our teeth and let's take a look at our top headlines for you a key committee on capitol hill approves of the start treaty to cut nuclear arms clearing the way for a full senate vote on ratification but despite being a top priority for the obama administration some republican senators say the treaty will hinder plans for a u.s. missile defense system. a chechen man. who is wanted by russia on terror charges says he. excused me he said that he's to have arrived in poland despite a warning he could face arrest if he sets foot in the country russia wants him extradited but he's been sheltered by political asylum in britain where the courts have rejected moscow's requests. the u.n. is it to decide on a russian a canadian territorial dispute in the arctic with ownership of the areas where its resources at stake moscow says it has scientific evidence to back up its quite. and

as the world's financial elite head to tsotsi for the investment forum our interview show spotlight asks the president of the institute for energy and finance . about what attracts investors in southern russia and how to end the financial crisis. sure is that so much good music to make even a lot of people here you look at the politics of the sept moscow beijing and washington and the rise of the multilateral world. how welcome to spotlight the interview show on r.t.

prime al gore enough and today my guest in the studio is leigh i need to get. the world's financial ellie that gathered at the two thousand and ten investment in the russian resort city of sochi to discuss investment projects and the road back to economic stability so what attracts investors here and how are they coping with the global crisis we will be asking mr gregorio who is the president of the institute for energy and finance. investment forum sort of two thousand and ten will be looking at some of the issues facing investors in russia they'll be particularly looking at the role of the state in market regulation one of the russian think tanks he's trying to promote the free market within the country but some russian businessman argue that investors would profit more from stronger state interference so the meeting in sochi will be exploring ways to square the circle.

thank you very much for being with us thank you thank you for coming to the studio first first of all let's compare today's forum and the two previous forums the the two thousand and ten forum is taking place when the russian economy is showing signs. recovery of course i don't like i like the fair last year especially and the one before that what does it mean in terms of the number of potential investors. or are sure our trucks investment of two kinds direct and portfolio and since we are coming out of crisis we presented few things like in any forum a few levels of information few types of information for different investors first is political stability what does all of them disappoint for any county inviting people and money second is the potential for making money in your country

and particular projects because vets are the most important and now seems to be if you hold walkways in the video card or butts covered in red sort of problems so nobody would be investing short term now but we need to attract investors to invest in russia involve ground. and starting putting money to d. and working with us for a few years ahead very very difference now we are not. at the salvations stage we are not really covered if we are looking ahead for maybe not too fast but steady growth well attracting investment to the russian economy is something businessmen and politicians are going to discuss for the next three days of saatchi spotlights you know the has the details. organizers of last year's investment who are in and so to see the up around of the

results almost two hundred deals with around twelve billion dollars we reached despite the global economic downturn this year that the disciplines will try to do better the discussion part of the firm will concentrate on how to improve the investment climate in russia one of the main thing standing in the way is bureaucracy. construction industry says it might take four years from formulation of a project to put in a permission to build that soon as an acceptable now the country's trying to promote innovation which will start with building a high tech complex and it's called. develop in the so-called russian silicon valley is also part of the forums engender another ambitious project to be discussed as russia's prospects for hosting the two thousand and eighteen world food bowl cup preparation for the event is believed to be a good incentive for development of the russian cities which will be moved it is expected that host in large scales hands will give

a long needed boost to tourism and russia nowadays the country's share of global tourism is only one percent attracting investment to segments of the economy as diverse as agriculture and moviemaking will be discussed the dozens of round tables in sochi and the success will be measured in the number of deals done. to the russian authorities they like to. speak about foreign and in the best words i mean like haley but how about you what do you think how useful really is this forum for attracting investors or is it more like a. case for a politician to speak and to to listen well normally each country has kind of current under our own decor creditor of form our own dear awful forums

antarctic investments so for us that would be st peter will for all more the far east for a mob i call for him so he's different a little bit because it's too close to the residence of a president and prime minister so it's a place where people meet sometimes you need to if you hire for it yourself you can do so it has much more political staining and at the same time it's coming it's not political dialogue it's v. presentation a few country and most of comedy is coming because it's your all of you have a special russia or do a sizeable in the english probably but did support a very shrewd be brazen. to meet people and have a first hand filling kaante so probably probably since crisis is mostly our work we don't expect any double dip or it least we don't expect too deep a second part of coverage we are hoping for v.

stadia to cover in russia just so we're hoping great investors would join us and help us to recover for a russian or four it's important for and i would expect some serious deals and serious companies rickett exactly one year ago prince to putin said the crisis is changing russia's investment policy didn't really change this policy did and did it. change the the competitive ability of this country yes of course to high oil prices into falls and he made a bit. hazy. we were trying to do too much or. oversells rich much more sorber situation we have certain monny we have a stable oil prices medical worth of things to ourselves but we do need foreign investors and incorporation in joint to changes for major enterprises and

programs so probably the are much more in mode where you least six the of poisoning country carvery in development there. are reports or mention bureaucracy which stands in the way of investment and cooperation with business abroad when we mention bureaucracy i mean the russians we actually don't mean bureaucracy itself we mean corruption the president the prime minister talk a lot about fighting corruption is getting somewhere in this fight of corruption well i would say domestic assessment of corruption for russia this is not very good and worth every here it's it's a problem in the course is time as well as before maybe even worse but i don't think it's the big investors from abroad we complain to be coming for big big coming big money going for big money in v.

much more protected much bed to protect it from the midst of corruption so probably it's more our citizens problem and politicians brogan vengeful foreign investors the complaint but invest in russia stands sixty theory out of one hundred thirty three thirty nine countries in the global competitiveness report so right in the middle it's far behind the most of the developed countries so it's corruption received the main reason for that and then that can russia move move move forward in this like of course if you could reduce corruption even all of all caernarfon i would say three corruption in all all over the whole bureaucrats ground. with the i'll believe the street corruption and we'll have a policeman outside because. well it is probably most vice bread for beer and talks in russian history and history it's official well

now russia of course must move out of his situation as soon as possible. the i.m.f. and the o.e.c.d. have warned about a major slowdown on the world economy by the and of the year do you but you believe your is that you do believe it's going to happen and russia how we're going to affect russia well we spanked slowdown in terms of global groove but it's still still not to live off the chorus it's a little soviet it's a slowing of recovery for russia affected by the slow we go forward export of metals and not the oil revenue but momentos the chemicals so we may have slowed down the effects but some office not too bad to go in the negative but probably. on the two percent against the prediction so boys if but did talwar so

ever since russia has started its market reforms the development of this country has been higher than the had the rates of development of the developed countries which is natural do you think this this high rate of development in russia will last a long way out really actually started more intense and grew for a new bit of in modernization innovation only to follow since years in one thousand three hundred minus forty forty percent g.d.p. minus forty is it's terrible so we are coming slowly from here very hard crisis and we're doing a little bit bit to be are about to start a major a never asian movement that is asian the next decade. well when when you say crisis . you mean you mean our own crisis i was rushing prices sounds so forth for the russians and for the russian economy our own crisis our own problems that we

sometimes create more important than the world crisis of course neiges was the beautiful peter of of we try goof ball but we had this crisis but this is now he joined to go we're going to be development only into fountains and we are all with domestic debates about how we modernize ourselves the next decades says president of the institute for energy and finance leila need to get it going here spotlight will be back shortly right after a break so stay with us down the aisle with.

her. we are going to get. back on track. we'll have a rally will sell lots of beer will. they will wear uniforms that will damage the black man everything but very little damming the white. they are the key to our problem our own right. her.

name is. alan kohler and. this history still keeps its secrets but now it's time to reveal the hidden in the soviet files house on the embankment and odyssey. to spotlight an album not even just a reminder that my guest in the studio today is no need to get good enough the president of the institute for energy and finance we're talking about the investment forum that taking place in the russian resort of saatchi where the the world financial lead has gathered to discuss the in the investor russia the

situation russian economy and also first of all the financial situation of russia well i in this respect wanted to ask mr good about it how easy or how hard is it to borrow money in russia which means has the russian financial system glover big money. i'm sorry well both. small money is a problem but it's a global problem but after the crises in your recovery it's very hard for small business to get to the three digits of course but we have now had a doctrine of rates and depositories and created three it's sort of the getting to be easy in inflation is not the high for big money it's a problem it's a victim so fresh and financial system here has very weak one market and limited capacity of bank so most of project could require or project finance or go international investors so big bro like north stream it's almost almost

each time a big group of banks in different investor so it's a combination of different instruments is that this is the central bank going to continue to low where the interest rates well it's mostly depends on inflation the central bank is trying to keep camp an inflation we had a problem this summer and see unusual situation in august so it's in a not not easy but still behold one digit inflation what is it would be good for a show and as as information goes down central bank is always a rates as much is it can well dutschke. investors have been thinking well about the easy credit is not the easy thing to make a record of these would kill us for easy creative it's your own current time but it well i'm going to quote here is from the deputy prime minister sort of be anyone who recently said that the size of russia's public sector has reached

a dangerous level this is a direct quote from deputy prime minister and he said that nearly fifty percent of the workforce in this country and the people work for the state and state owned. factories are organizations and so what is the government since he said that looking at reducing this level so are we looking at a new wave of privatization well if you don't have too many enterprises left for procedures if used to ports or really not too many people it's more oh i can do is . didn't always in me be kompany is. do we need bureaucrats maybe we have some sources reaches for our state services but could be privatized so it's a long way but differently in the recent five seven years we had substantial growth of government employment instead of roads where it's very it's a problem we do believe the government is not very deficient is private business

and more people into government six lissa fissions but still the main the main subject today in russia is modernization and the government is playing a crucial role the main role in the modernization process is that going to continue because if that is going to continue then where we're not talking about reducing the level of the wealth modernisation is not a marcher of government officials modernizing who can't when i think it is it is it seems to change people there was no institutions read stacks and it takes incentives it's different it's policy first of all not maybe. money maybe some takes my numerous but not bureaucrats coming in all american joke i'm from the government i'm here to help you where it's not what we mean by but there are musicians ok well let's see what the russians themselves just christian people in the streets what they think is better for their own country

a government controlled economy or a free market economy spotlights cards. they have more on this let's take a listen to how they are today i'll try to find out if prices think but they clearly mean their country should be controlled by the government over the free market is better for the development of russia before birth but i think it should be controlled by the government because only government can manage it private companies only think about their own good or for it because. it's obvious that a free market is better for our economy look at certain conditions first of all there should be a special legislation which regulates the markers and secondly the fission state regulating bodies. i think the economy should be state controlled because those who understand that should be at the helm but if people get the reins it could cause another revolution as well but that is free markets of course however states control is also necessary i think those two should co-exist. cool's free markets

that way people would have control everything should be transparent and businessmen should pay twenty percent tax for example and that could be a good way for the development of our economy out i've got to leave here you've got a question for our guest. when will the russian economy cease to be oil and gas dependent so what can you and your insinuation in a generation generational when you say generation to meet you mean a generation in the business or a generation in private life is it twenty years or is it fifty years and well it's three years really least because now in the situation when most of your own. get said we have very limited number of people imported by the it's sometimes forty fifty percent of the government income so we are very much dependent on oil is the government into government federal budget bred to be a problem so he can get rid of the easily but be me start modernizing crush of your

mother music in the juicer to reducing consumption of energy in producing more sophisticated their products depending on the government it still it will take years so so so you say joe when you say it really generation is that because you mean that the the this oil dependence is not actually in the pockets but it's in the money this is not our troops not only in their minds if we are probably read to be now into depended in the federal budget on oil and getting incomes and taxes so if you will develop service in manufacturing go pick up in some years but to be replaced by incomes i mean taxes from manufacturing and services replacing them in comes from oil it's not easy let's get back to saatchi to investors and to the high tech kind of modernization that we've been talking about and of which president medvedev is talking for the last at least a year he stuck it every week it says something about modernization are the

investors others people that get together such a today are they ready really to invest into russia's high tech well russia take exists we have about five industries you are pension and venus to go on money so probably it probably is a problem of general investment climate evoluting corruption including access to create it so we were talking about including. our own private don't cheat for intellectual property rights award of issues reach visitors keep us at the sixty for. point in your global elites. so you would see the more steps we will make on visit least bit the investment climate to be more investment if you can get insight to be aware of some people say that skolkovo this is a place where where russians are building their other silicon valley that it may become an isolated island of innovation special taxes of special attention from the

government but but that this this actual a valley will actually be an island that will not be connected to the rest of the russian economy may that become a case well hold on this really i'm not much fund of fun of use your know the critics to man i love the idea and escaped the house and skeptic and i believe it's goal call may be a good project in there are good toys for the government but russia is still one hundred forty million people we have a few dozen the view for our very old you created people and potentially for post industrial innovation so i'm much more concerned about how to meet people capable to develop in the nation or on for granted not years not in one voice but one of the reason i'm asking about skolkovo is that i am particularly interested in that

special tax rules that are being designed for skulk of fall for those who are going to make businesses culpable will and me these tax then these taxes be applied to certain industries outside the russian silica well i believe read it could be because in many cases people produce at home something from computers and i'm sure maybe we would be assigned to skulk or and would enjoy the view of all texas any we are i was always. i would save your property and of all taxes for the search and development of the can it takes research you say vs what it takes in. food scene or distance we do need help the searchers and we have a huge dip in generations we're bridging between sixty's in his need to bridge fifty fifty five years of groove and the weed vestments in the research and

development so we need help the sector view of texas as well another question about saatchi the economic and of such as drawing taisha intention to the to the regional regional development in russia do the russian regions need additional possibilities additional instruments of development is russia in general in need of correction of a situational policy well we believe in a lot of experts on the region or some expert on the regional towards the we believe that most develop russian regions have own. human cape though minna general cape though israel is any european country. right they have reacted in more cost amaro simply there were these sieges can't. be can do poorly says an adjustment to post industrial rolled them selves be me have it be more free hands.