Forum Scrambles to Stay Relevant

A month before his economic forum in London, Sergei Kolushev flew to Moscow with a list of people to meet. At the top: politicians and senior officials in President Vladimir Putin's administration.

"I need to know what's happening in politics. ... Politics is getting in the way," Kolushev said at a Moscow cafe last week, shortly after meeting Federation Council Speaker Sergei Mironov.

The odds, however, seem to be stacked against Kolushev and his company, Eventica, which is scrambling to prepare for the 11th annual conference -- rebranded as the Russ!a Investment Roadshow -- on April 21 and 22. Last year, the conference suffered a stinging blow when government officials and many business leaders pulled out at the last minute amid speculation that the Kremlin was discouraging participants from going to London.

Russian-British ties are at a post-Cold War low after a series of diplomatic disputes following the poisoning death of former Federal Security Service officer Alexander Litvinenko in 2006. As Kolushev and his colleagues tried to line up prominent speakers last week, the Federal Security Service announced that it had detained an employee of Russian-British oil venture TNK-BP on suspicion of espionage.

To top it all off, talk of a possible government reshuffle ahead of President-elect Dmitry Medvedev's inauguration on May 7 seems to be causing government officials and some businesspeople to want to stay in Moscow.

A silver lining amid the uncertainty surrounding the conference, however, is that Medvedev and British Prime Minister Gordon Brown are scheduled to meet for the first time at a Group of Eight summit in Hokkaido in July and might try to mend ties.

So the Kremlin appears ready for a compromise: It will not boycott the London forum but will stop short of sending the most senior government officials. A preliminary list of confirmed participants shows Deputy Finance Minister Dmitry Pankin, Central Bank first deputy head Alexei Ulyukayev and Federal Service for Financial Markets chief Vladimir Milovidov as the highest-ranking government participants so far. On the British side, organizers are expecting the country's minister for business, trade and investment, John Hutton, and Financial Services Authority head Hector Sants.

Some Russian government agencies whose officials have confirmed their participation with Eventica expressed reluctance to confirm their attendance publicly, in a possible sign that controversy continues to surround the conference.

A Central Bank spokesman, speaking on condition of anonymity, said Ulyukayev did not plan to go. A Finance Ministry spokesman, Andrei Saiko, confirmed that Pankin planned to go but said Finance Minister Alexei Kudrin probably would not. Repeated calls to Milovidov's agency over the past week went unanswered.

Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, and Igor Yurgens, first vice president at Renaissance Capital, are planning to go, said their spokespeople, who declined to give further details.

Alfa Bank president Pyotr Aven, who was among the participants who abruptly canceled last year, has received an invitation, said a bank spokesman, Leonid Ignat. He declined to say whether he would go. A Sberbank spokesman said he did not know whether chief executive German Gref would attend but noted that he was scheduled to show up at a conference in Singapore on April 1. Unified Energy System chief executive Anatoly Chubais -- a longtime fixture at the London forum -- did not go last year and was unlikely to attend this time, a spokesman said.

National newspapers reported last year that the presidential administration had actively discouraged state officials from going to the Russian Economic Forum in London, where Kremlin critic Boris Berezovsky and Chechen rebel envoy Akhmed Zakayev live in asylum, prompting the last-minute pullout of all government officials and many businesspeople. Kommersant, citing a source close to the Kremlin, said Putin's aide Viktor Ivanov told Russian officials not to turn London into a "second Courchevel," referring to the scandalous antics of the country's billionaires at the French ski resort.

Kremlin also might have been trying to raise the profile of its St. Petersburg International Economic Forum, which meets in June.

The Kremlin has denied giving orders to skip the London event, and Kremlin spokesman Dmitry Peskov said by telephone that bureaucrats might have overreacted last year by pulling out en masse. He said he did not immediately know whether Kremlin officials would attend next month.

In any case, nobody needs to wait for the Kremlin's approval before hopping on a plane, Peskov said, noting that Britain remains a key trade partner despite diplomatic tensions and that Eventica has rebranded the forum.

"This year it's called Investment Roadshow, right?" he said.

In addition to renaming the conference, organizers have refocused it to target the international banking and financial community. They want to change the ratio of participants to 80 percent foreigners and 20 percent Russians, from roughly 40 percent foreigners and 60 Russians in the past.

Simon Joseph, the forum's director, said he hoped the conference this year would provide "a real discussion about how best to react to the global credit squeeze."

"Ironically, this can be a common rallying point for everyone, a problem that unites us all, in Britain and Russia and elsewhere," he said in e-mailed comments.

Started in 1998, the London forum grew from a small trading conference to an annual investment powwow that brought together Russia's most influential businesspeople. In the first years of Putin's presidency, Berezovsky, surrounded by bodyguards, dropped in and stole the show, and opposition politician Boris Nemtsov openly criticized Putin. By the mid-2000s, though, it began to resemble a Partkhozaktiv, a Soviet-era conference between party leaders and enterprise directors, as Aven once jokingly put it.

The forum has also faced growing competition, including from the St. Petersburg conference and the World Economic Forum in Davos, which welcomed a record number of Russian participants in January.

Metals billionaire Oleg Deripaska, who never participated in the London conference, could be seen at the St. Petersburg conference last year chatting to then-Economic Development and Trade Minister Gref, creating something of a frenzy among photographers.

A spokeswoman for another metals billionaire, Alexei Mordashov, said he would not go to the London forum this year and he found the World Economic Forum more helpful.

Kolushev said he welcomed competition, adding that his forum's new roadshow concept would take time to take off.

Kolushev said he planned to expand the new concept further by starting a series of Russia roadshows for investors in New York, Frankfurt, Dubai and two of Asia's financial capitals.

"We'd go out into the field and make sure Russia gets a good price," he said. "How can they ban a roadshow? It would be unpatriotic."