On behalf of the World Bank Group and President Robert B. Zoellick, let me congratulate the organizers of the VIth International Investment Forum in Sochi for this wonderful opportunity for open dialogue. I wish us all success and fruitful deliberations in the coming days. It is a great pleasure and privilege to be here today.
Why Infrastructure is Important
The case for infrastructure development is strong and easy to make. Indeed, it has been at the center of Russian politics ever since Peter the Great embarked on the process of Russia’s modernization.
It drove Sergei Witte’s resolve to develop the railway system and construct the Trans-Siberian railway from Moscow to Vladivostok that was completed in 1896 and opened the gateway to the Pacific almost 200 years after St Petersburg had been founded as the country’s gateway to the west. And it was the major force behind huge infrastructure developments of the Soviet era, such as major hydro-electric power systems.
Today the case for infrastructure is more valid than ever as Russia continues its quest to join the ranks of the most successful economies.
First and foremost, infrastructure development is key to economic growth. Good roads and bridges expand market opportunities, lower the costs of goods and services, and enable countries to use their productive capacity better.
Second, surveys all over the world have shown that well-developed infrastructure helps attract foreign investment and improves a country’s international competitiveness. And where infrastructure is inadequate, businesses suffer and complain.
....Russia faces the obvious need to develop and upgrade her infrastructure, such as roads, bridges, airports, electricity, water supply and sanitation, to enable producers to get their goods to market, to spur economic growth, and to provide education, health care and adequate living conditions for all, including the elderly.
One need only travel on the roads around Moscow or St. Petersburg to see how the numbers of motor vehicles have doubled, some even say quadrupled, since the transition and the strain that is putting on the road infrastructure that Russia inherited from Soviet times.
With its abundant oil and gas revenues, Russia has a single advantage today that other countries would envy. But international experience with infrastructure finance suggests that this is no reason for complacency. Challenges abound, even in cash rich countries. Read moreLabels: russian business news |
