Russia 101202 Basic Political Developments

Minister for Industry, Tourism and Trade announces a new "Made in/by Spain" Plan for Russia

http://www.la-moncloa.es/IDIOMAS/9/Gobierno/News/2010/01122010_MinisterIndustryPlanRussia.htm

Miguel Sebastián announced a new "Made in/by Spain" Plan for Russia during the 7th Mixed Hispano-Russian Committee being held on Wednesday in Moscow.

The Plan, inspired by the successful "Made in/by Spain" project being developed in the US, is aimed at improving the perception of Spain in Russia through the increased promotion of the image of Spanish products, services, companies and brands and by supporting the market penetration strategy adopted by Spanish companies in Russia.

he Government believes aiming this initiative at the Russian market is a good move because it is a region where Spanish companies and products have strong growth potential and where Spain has a long-standing image of a modern, industrialised country. Furthermore, the organisation in 2011 of the Year of Spain in Russia and of Russia in Spain (something that will foster the organisation of special events to increase mutual knowledge between the two countries) is an opportunity to increase the knock-on effect and profit from the actions contained within the "Made in/by Spain" Plan.

On 14 September 2009, the President of the Spanish Government, José Luis Rodríguez Zapatero, and the Russian President, Dmitri Medvedev, decided at a meeting held in Yaroslavl that 2011 would be the Year of Spain in Russia and of Russia in Spain.

The "Made in/by Spain" Plan for Russia which will be implemented between 2011 and 2012 includes more than 70 events over the twelve months in such sectors as the agro-foods, consumer goods and industry and technology and will involve cities such as Moscow and St Petersburg.

For 2011, participation at various trade fairs with official pavilions has been scheduled, more than twenty trade missions have been organised and several business meetings have been set up, as well as other events such as the Spanish gastronomy weeks, a Spanish fashion conference and the presentation of national business schools.

One of the pillars of the Plan's strategy is to involve companies, sectoral associations, the autonomous regions and other sectors in joint finance for these actions. The estimated budget amounts to 20 million euros in 2011 and 18 million euros in 2012, with financing from the central Government of 50% via the Spanish Institute for Foreign Trade (ICEX). The rest will be provided by the autonomous regions, companies and other institutions.

Russia, a market with strong potential

Russia has all the ingredients required for the "Made in/by Spain" Plan to be a success: it is a very large market (140 million inhabitants), it has 12 cities with more than one million inhabitants, a population with a growing spending power (135,000 people have wealth in excess of one million euros) and holds the third largest reserves of natural resources in the world, quoted at 490,000 million dollars.

Furthermore, the country presents good growth prospects for the future. According to IMF forecasts, its GDP will grow by 4% in 2010, by 4.3% in 2011 and by 4.4% in 2012.

The Russian Government has implemented plans aimed at modernising its economy that include new infrastructures, the stimulation of non-energy sectors and a renewal of the production fabric, as well as the sale of stakes in public companies over the next five years.

Spanish companies have a growing presence in Russia (direct foreign investment from Spain increased by 4.2% in 2009) and it is necessary to channel this interest in order to increase a level of bilateral trade that is still relatively low in volume.

Last year, the Spanish market share stood at 1.1% of Russian imports. However, by August 2010, the total amount of exports in the whole of 2009 had already been exceeded by 19%, which demonstrates the commitment by Spanish business in this market. Furthermore, the number of regular export companies (with exports over the last four years) has grown year by year and increased by 0.5% in 2010 despite the crisis.

From the political point of view, relations between Spain and Russia are very good and there is a mutual desire for cooperation between the two governments.

7th Mixed Hispano-Russian Committee and multilateral Partnership

During his official trip to Russia, the Minister for Industry, Miguel Sebastián, presided over the 7th Mixed Hispano-Russian Committee for economic and industrial cooperation; a forum created to strengthen institutional and economic relations between the two countries.

The Mixed Committee discussed the main bilateral issues related to sectors such as transport, industry, naval construction, aerospace, tourism, energy and environment (Kyoto Protocol).

Within the framework of the Committee, a joint declaration was signed to foster cooperation on issues of trade, technology and investment along the lines of the agreement signed between the European Union and Russia at the Rostov Summit held in June 2010. The basic instrument for its development will be sectoral dialogue, which will provide a platform from which to draft plans of action for priority objectives.

In parallel to the Mixed Committee, a Hispano-Russian Partnership was also organised by the Economic and Trade Office of Spain with support from the Spanish Institute for Foreign Trade (ICEX). This event revealed the potential of Spanish companies in high added value sectors such as energy, transport and the environment.

Within the framework of this Partnership, a number of bilateral meetings were held between Spanish and Russian companies in order to explore possible joint participation options on various projects.

The multi-lateral partnerships are aimed at facilitating the entry of Spanish companies into markets that are traditionally difficult to access.

Russia is a priority target for this strategy implemented by the ICEX due to the size of its market, its growth potential, the high demand for imports, the external solvency and positive business climate.