UK, Russia strengthen trade ties
UK and Russian ECAs have announced a series of trade initiatives at a summit in London.
A memorandum of understanding (MOU) was agreed between UK Export Finance (UKEF) and Russian Agency for Export Credit and Investment Insurance (EXIAR) which will lead to co-operation in the areas of export credit policy and risk assessment.
Furthermore, the British manufacturing firm Tensar is to build a plant in St Petersburg at a cost of £12mn, while construction company Stoneguard will build a waste processing facility in Novosibirsk, a project worth £60mn.
Speaking to GTR, CEO of EXIAR Peter Fradkov says the MOU gives his organisation “access to the expertise of one of the oldest ECAs in the world as well as opportunities of profitable co-operation in the field of information exchange on risk assessment”.
And while the headlines have been all about British projects, Fradkov speaks glowingly of how “the insurance support of projects involving Russian and British content in third countries will contribute to developing and strengthening trade and economic relations between the two countries”. Fradkov told GTR that nuclear and energy projects would be the primary areas of focus.
British exports to Russia rose by 39% in 2011, and UK business secretary Vince Cable – who met with Russia’s first deputy prime minister Igor Shuvalov at the summit – took this chance to encourage more firms to pursue new exporting opportunities in the country. Cable says: “Britain’s trade with Russia is rapidly expanding and the opportunities will only continue to grow as its economy opens up further to trade and investment.”
Earlier this year, Shell announced its plans to open a £60mn lubricants oil blending plant in Tver, while the Russian bank Sberbank listed on the London Stock Exchange in September.
Meanwhile, in an independent review of UK economic growth entitled No Stone Left Unturned, Lord Heseltine, Britain’s former deputy prime minister, urged the government to act on aviation within a the next year or risk Britain’s international status as a European trade hub.
The UK’s lack of capacity to charter further flights to emerging market countries – particularly the BRICs – has led to speculation as to whether it can maintain its status. A range of solutions have been mooted, including a third runway at Heathrow, a new airport in the Thames Estuary and an expansion of London Stansted Airport.
Heseltine, however, asserts that a decision needs to be made as soon as possible. The issue has divided the ranks of the coalition, with budgetary and environmental concerns dominating the debate.