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. Last Updated: 07/27/2016

Russia's Good Side Talked Up at Davos

APSistema CEO Vladimir Yevtushenko, Isdell, Matviyenko and Gref listening to Dmitry Medvedev at Davos on Saturday.
DAVOS, Switzerland -- Ernst & Young CEO James Turley didn't mince words when he took the microphone at the World Economic Forum.

"I think the question that is on everyone's minds out here is: 'Is Russia reliable?'" he told a packed hall of about 1,000 people who had showed up Saturday to get the lowdown on Russia.

The answer provided by Turley and a parade of other business executives and Russian politicians was a resounding yes. Audience members at the gathering of the world's most influential business leaders and politicians in the Swiss mountain resort seemed impressed.

"At the end of the day, the investors that are [in Russia] squarely feel that the country is very, very reliable," Turley said at a plenary session titled "Modern Russia: Strengths, Challenges and New Prospects -- A Perspective From the Government and Business."

"I think the progress that has been made by Russia is absolutely magnificent," Coca-Cola chief E. Neville Isdell said. "People don't understand how fundamentally changed Russia is.

"However," he added, "I think that if there has been one failure in terms of Russian business, in terms of Russian government, it is they have not always been able to put on the right face to the world, and therefore they have been looked at through negative eyes."

He said foreign companies working in Russia "need to help Russia project itself in a different way."

Even Forbes chief Steve Forbes, who faced the darker side of Russian business when the editor of Forbes magazine's Russian edition, U.S. citizen Paul Klebnikov, was gunned down by unknown assailants on a Moscow street in July 2004, had warm words of support.

"Russia's future is great because it does have a tradition in math, in sciences, engineering," he said. "And if those intellectual resources are free and allowed to flourish, Russia will become a mighty economy in the global economy -- and that was the vision of our original editor Paul Klebnikov. He saw these forces rising up."

"We are not trying to push anyone to love Russia," said First Deputy Prime Minister Dmitry Medvedev, reading from prepared remarks in English, "but we shall not allow anyone to hurt Russia." Medvedev, wearing a navy suit and dark purple tie, said Russia was striving to win international respect for itself and its people, "not by force, but by our behavior and achievements."

The foreign investors who participated in the session acknowledged that behavior was an area Russia needed to work on, particularly when it came to corruption and red tape. But they stressed that the rewards far outweighed the risks.

Medvedev, widely seen as a potential candidate to succeed President Vladimir Putin, led a high-level delegation to Davos this year, in a sharp departure from recent years when the government all but ignored the event. He made his international debut at the five-day forum, which ended Sunday.

In his remarks, Medvedev said Russia would grow by diversifying its economy, improving its infrastructure and developing a highly skilled workforce. He said economic output this year would surpass for the first time the highest level set by the Soviet Union. "Some say Russia is starting to resemble the Soviet Union. Maybe so," he said. "Maybe in part this is the case, but only in one area: This year we will reach the maximum level of GDP reached in the Soviet era."

He also said Russia should pass Saudi Arabia to become the world's largest oil producer in the near future, adding that Russia currently ranks No. 1 in gas production and No. 4 in electricity.

At a later news conference, Medvedev said the government would submit a bill to the State Duma in the "coming months" that sets limits on foreign ownership in strategic industries such as oil, gas, metals and defense. The lack of clarity on this issue has spooked investors, who have been put off by the prospect of investing in a project and then learning that it is off-limits to foreigners.

The bill will be "clear, fully balanced and answer all questions that arise in daily practice," Medvedev said. "The worst thing in business is opacity and unpredictability."

Economic Development and Trade Minister German Gref, however, offered assurances at the plenary session that the state would not get too involved in the economy. "There is no real danger of excessive state control of the economy in the future, because if it is in state hands, it will be inefficient, ineffective and we would find ourselves having to sell it," he said.

Forum participants listened attentively to the presentations Saturday. Medvedev's informal, chatty style and the strong words of support from the foreign executives appeared to win many of them over.

Joseph Nye, a professor of international relations at Harvard University, tried to warn participants at a separate session that Russia would not remain a world power by 2020 if it failed to diversify its economy, to stop using its energy resources to "bully" other countries, to respect the rule of law, and to tackle its demographic crisis.

"Most participants seemed to ignore these criticisms," Nye wrote in a comment posted on "But it was interesting to hear one important participant admit that reform might progress faster if oil prices dropped, and another accept the point that friendly criticism should be welcomed as long as it is a two-way street.

"The fact that [Russian officials] have reappeared in Davos to defend themselves may be a small but healthy sign," Nye said.