Russia’s last minute decision to pull out its highest ranking representatives from the Russian Economic Forum in London this week isn’t helping build any trust between the two countries.
FT: Russian revenge:
There is something very disturbing about the last-minute mass pull-out of Russian business leaders from London’s Russian Economic Forum, which starts today.
Some called the organisers, complaining of late diary changes. Others did not bother with excuses – it was obvious that behind the boycott lay the dread hand of the Kremlin.
Officials have long been unhappy with London hosting the premier annual Russian economic conference and have steadily cut ministerial representation. But business people were free to come until last week when the top names suddenly cancelled.
The authorities gave no reasons. But they left no doubt they wanted to punish London, probably over the Boris Berezovsky affair. Officials are furious at the UK’s failure to respond to the exiled oligarch’s recent anti-Kremlin outburst. Moscow is also angry at the harm done to Russia’s global image by the row over the poisoning in London of former spy Alexander Litvinenko.
The conference pull-out highlights the challenges of doing business with Russia. While the economy is booming, creating opportunities for many companies, the Kremlin is increasingly ready to intervene in the economy, even, it seems, in the conference sector.
For foreign investors these are rich but dangerous waters. Even large groups are not immune from arbitrary actions, as Royal Dutch Shell found when it was pressed to sell control of the Sakhalin-2 scheme to Gazprom. Even companies not involved in strategic sectors may be hurt in the cross-fire, as the forum organisers have learnt.
Investors who think they can avoid political risk are fooling themselves. In Russia almost everything is political and almost everything potentially carries political risk.
Who could blame them?
British business people are very wary of their Russian counterparts and are worried about the growth of Russian investment in the UK, according to an opinion poll published yesterday.
The survey, which was released on the eve of the Russian Economic Forum, London’s premier Russia-oriented conference, shows nearly half of those polled (49 per cent) think Russian investment in the UK is “a bad thing”. Some 33 per cent believe Russian business culture is different from British and that Russian takeovers of UK companies could damage public trust in business.