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. Last Updated: 07/27/2016

Putin Urges Foreign Investment at Sochi Conference

SOCHI, Russia— The country needs to boost investment to ensure that it emerges strong from the financial crisis, so it will not reintroduce capital controls, Prime Minister Vladimir Putin said on Friday. "We will keep this liberal regime, which is one of the fundamental reasons for investment in Russia's economy," Putin told an economic forum in the Black Sea resort town of Sochi.

Businessmen attending the forum were upbeat about prospects in Russia's resource-rich economy now that the worst of the global slowdown seems to have passed and investors are looking for fresh avenues for their cash.

David Bonderman, founding partner of one of the world's largest private equity funds, TPG, said he is looking for opportunities for about $30 billion in uninvested capital and is "cautiously optimistic" about Russia.

"We have about $60 billion of capital, half of it is uninvested and we are looking for opportunities," he said.

General Electric Co., the largest U.S. conglomerate, listed Russia among its priorities. And John Mack, outgoing CEO of Morgan Stanley, told Reuters on the sidelines of the forum that he was confident about Russia.

Putin said he hoped that the purchase of Opel by a consortium including Russia's largest lender Sberbank and carmaker Avtovaz would set a precedent for fruitful partnerships with foreign companies. "We are open to foreign investments, of course. ...We need not so much the money, and not just the money, but first of all the knowledge and the experience that key international players have," he said.

Avtovaz chief Igor Komarov told the forum that his company plans to create a joint venture with Renault and its Japanese alliance partner Nissan Motor Co. to produce car parts.

"Russia needs to fight for direct investment," German Gref, Sberbank's chief executive said.

Although Russia has been much harder hit by the global crisis than other major emerging markets such as China or India, Putin said his country had some advantages over other emerging markets.

"One of the main advantages of China is stability … a possibility for financial authorities to take political decisions without looking back at political situations. Some people like it, some don't, but for investors it is an advantage. But there are some currency restrictions," he said.

"In Russia there are some problems but some pluses, including the liberal financial regime."

Despite the upbeat tone, foreign companies say problems remain with investment in Russia, noting a range of issues from a lack of transparency to more basic problems.

"Reduce traffic jams, seriously," one forum participant said when asked what would improve the investment climate.