Putin tries to woo investors to Russia but many stay away

Thu May 22, 2014 11:11am EDT
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By Timothy Heritage

ST PETERSBURG (Reuters) - President Vladimir Putin tried on Thursday to warm up relations with foreign investors chilled by the crisis in Ukraine, but many senior executives snubbed him by boycotting a conference billed as Russia's answer to Davos.

The St Petersburg International Economic Forum has for years drawn global business leaders to the elegant former imperial capital on the shores of the Baltic Sea, and deals worth billions of dollars have been signed at it.

But not this year. Many chief executives have stayed away under pressure from the U.S. government, which said attendance would be "inappropriate" after Russia's annexation of Crimea and the imposition of U.S. and European Union sanctions on Moscow.

Putin is not due to show up until Friday, when he delivers the keynote speech. But he sent a telegram to delegates with two messages: Russia wants to do business with the West but it will not do so at any price - it must be treated as an equal partner.

"Russia is ready to broaden multi-faceted contacts with all partners on the basis of true equality and respect for one another's interests," he wrote as he made his way back from China after signing a landmark gas supply deal.

At the forum, Putin is likely to hold up the 30-year supply deal with Beijing as a sign to the West that it cannot isolate Russia globally because it has powerful allies in Asia.

But with Russia's economy tilting into recession and capital flight accelerating, an exodus by foreign investors would be a painful blow for Putin.

Although U.S. and European sanctions have so far targeted only a few dozen individuals and small firms, the overall chill and the threat of broader measures in future are having real economic consequences, Russian officials say.   Continued...

Russian President Vladimir Putin attends a meeting with top officials in Blagoveshchensk May 22, 2014. REUTERS/Alexei Druzhinin/RIA Novosti/Kremlin