Speech by Minister of Trade and Foreign Economic Cooperation of the Republic of Tatarstan Hafiz Salikhov The 8th Annual Russian Economic Forum Investment Climate in the Republic of Tatarstan: Experience, Estimations, and Prospects for Development London, 12 April 2005

GDP of the Russian Federation and GRP of the Republic of Tatarstan in 2004 prices, RUR billion

Industrial Production Structure of the Republic of Tatarstan 2004

100% Increase in Output by Sector in the Republic of Tatarstan 2004

Credit Rating of the Republic of Tatarstan :  Foreign exchange borrowings rating Ba1 stable outlook  Long-term credit rating В- positive outlook Investment Rating of the Republic of Tatarstan Investment rating among 89 Russian regions:  6th in investment risk  9th in investment potential

Structure of Foreign Investments in 2004

System Elements for Infrastructure of Investments Attraction production (modern logistics centres and hubs, transportation networks, warehousing facilities) production (modern logistics centres and hubs, transportation networks, warehousing facilities) organisation of the economy (various centres and services dealing with promotion of investments, their insurance and export promotion) organisation of the economy (various centres and services dealing with promotion of investments, their insurance and export promotion) quality of life (system of additional health insurance, information support and other social systems) quality of life (system of additional health insurance, information support and other social systems)

Main Reasons for Insufficient Amounts of Attracted Investments lacking well-developed infrastructure for attraction of investments lacking well-developed infrastructure for attraction of investments insufficient development of the stock market, land and real estate market, and the capital market insufficient development of the stock market, land and real estate market, and the capital market absence of prepared projects

direct foreign investments are focused on several large-scale projects being implemented under the auspices of the republic's government direct foreign investments are focused on several large-scale projects being implemented under the auspices of the republic's government investments in ordinary projects are virtually absent, though the republic has some excessive investment resources investments in ordinary projects are virtually absent, though the republic has some excessive investment resources

Composition of Investors as a rule, only technologically related to the enterprise are being invested as a rule, only technologically related to the enterprise are being invested those primarily interested in the source of raw material, a place for arranging the production, and cheaper labour force those primarily interested in the source of raw material, a place for arranging the production, and cheaper labour force for the most part, investors do not consider our economy as a safe and expedient place to invest money and make profit for the most part, investors do not consider our economy as a safe and expedient place to invest money and make profit

Programme for Improving the Investment Attractiveness of the Republic of Tatarstan aimed at implementation of pilot infrastructural projects identified by the Government of Tatarstan as priority projects oriented to international financial and business community aimed at implementation of pilot infrastructural projects identified by the Government of Tatarstan as priority projects oriented to international financial and business community efficient commercial projects should stimulate business activities in the republic and become a kind of growth centres efficient commercial projects should stimulate business activities in the republic and become a kind of growth centres they would be implemented on the pledge-free commercial basis, with the use of insurance mechanisms and instruments of securities market they would be implemented on the pledge-free commercial basis, with the use of insurance mechanisms and instruments of securities market

Measures to Improve the Investment Attractiveness of the Republic of Tatarstan Increasing the growth rates of people’s real income Increasing the growth rates of people’s real income Increasing the financial efficiency of existing enterprises Increasing the financial efficiency of existing enterprises Attracting to the republic most high-performance and technologically advanced enterprises Attracting to the republic most high-performance and technologically advanced enterprises Encouraging enterprises which provide the best earning records and highest pay rises Encouraging enterprises which provide the best earning records and highest pay rises Providing incentives to the process of production re-equipment, replacement and withdrawal of fixed assets Providing incentives to the process of production re-equipment, replacement and withdrawal of fixed assets Providing priority incentives to small business development as a factor to increase the level of people’s real income and to meet consumer demand for goods and services Providing priority incentives to small business development as a factor to increase the level of people’s real income and to meet consumer demand for goods and services Developing transportation and communication infrastructure – primarily, through wider use of up-to-date communication facilities Developing transportation and communication infrastructure – primarily, through wider use of up-to-date communication facilities Encouraging the funding of sciences and scientific services, establishing technology parks and hi-tech cities Encouraging the funding of sciences and scientific services, establishing technology parks and hi-tech cities

Risks Whose Indices Have a Potential of Being Decreased Legislative risks: Non-transparency of investor support procedures Non-transparency of investor support procedures Lack of a system of documents contributing to the improvement of the republic’s investment attractiveness Lack of a system of documents contributing to the improvement of the republic’s investment attractiveness Environmental risks: Still essential waste water contamination Still essential waste water contamination Criminal risks: Rather high level of crime including such connected to drug trafficking Rather high level of crime including such connected to drug trafficking Financial risks: Low rates of budget parameters improvement Low rates of budget parameters improvement

Programme for Development of Innovative Activities in the Republic of Tatarstan for special attention in implementing investment programmes is devoted to innovative aspects and priority development of hi-tech processing sectors special attention in implementing investment programmes is devoted to innovative aspects and priority development of hi-tech processing sectors we intend to allocate government resources for support of those sectors of the economy which can cause a multiplicative effect on the development of other sectors, ensure the innovative nature and growth in efficiency of production and efficiency of labour in the economy in general we intend to allocate government resources for support of those sectors of the economy which can cause a multiplicative effect on the development of other sectors, ensure the innovative nature and growth in efficiency of production and efficiency of labour in the economy in general

Programme for Development of Innovative Activities in the Republic of Tatarstan for Tatarstan Investment Venture Fund which accumulates investment and directs it to the implementation of innovative projects Tatarstan Investment Venture Fund which accumulates investment and directs it to the implementation of innovative projects A number of sectoral innovative centres and technology parks based on the leading universities of Tatarstan A number of sectoral innovative centres and technology parks based on the leading universities of Tatarstan State Non-Commercial Organisation “Stabilisation Pledge and Insurance Fund of the Republic of Tatarstan” intended to ensure financing for investment programmes and projects aimed at economic and social development of the Republic of Tatarstan State Non-Commercial Organisation “Stabilisation Pledge and Insurance Fund of the Republic of Tatarstan” intended to ensure financing for investment programmes and projects aimed at economic and social development of the Republic of Tatarstan Another important element for commercialisation of scientific research results is the Innovative Technopark “Idea” Another important element for commercialisation of scientific research results is the Innovative Technopark “Idea”

Creation of Industrial Districts in the Republic of Tatarstan Nizhnekamsk OAO Nizhnekamsk- neftekhim Naberezhnye Chelny OAO KamAZ Kazan OAO Kazanorgsintez The project’s mission is to develop the industrial potential of the republic by attracting a large number of small to medium businesses.

Tatarstan Regional Investment Bank (TRIB) It will offer a complete range of financial services in accordance with international practice It will offer a complete range of financial services in accordance with international practice To date, a feasibility study for the TRIB project was prepared together with Hogan & Hartson, a US leading law firm; we are working to attract international financial institutions to the implementation of this project To date, a feasibility study for the TRIB project was prepared together with Hogan & Hartson, a US leading law firm; we are working to attract international financial institutions to the implementation of this project We invite potential partners who wish to do business in our republic and are prepared to cooperate with us in the implementation of this project We invite potential partners who wish to do business in our republic and are prepared to cooperate with us in the implementation of this project

Celebrations of the Millennium Anniversary of Kazan Kazan, the capital of the Republic of Tatarstan, was inscribed in the UNESCO World Heritage List Kazan, the capital of the Republic of Tatarstan, was inscribed in the UNESCO World Heritage List one of the largest economic, scientific and cultural centres of Russia one of the largest economic, scientific and cultural centres of Russia a city of higher education establishments, theatres and museums, international festivals and contests a city of higher education establishments, theatres and museums, international festivals and contests a city where Asia unites with Europe, mosques amicably neighbour on churches, and hoary legends are carefully preserved against the background of the onrushing advent of the latest technologies a city where Asia unites with Europe, mosques amicably neighbour on churches, and hoary legends are carefully preserved against the background of the onrushing advent of the latest technologies

Празднование 1000-летия города Казани состоится 30 августа 2005 г. состоится 30 августа 2005 г. Предстоящий юбилей является событием не только российского, но и мирового масштаба Предстоящий юбилей является событием не только российского, но и мирового масштаба Приглашаем всех желающих на празднование города! Приглашаем всех желающих на празднование города! Welcome! Добро пожаловать! Рәхим итегез!