Oct. 29 (Bloomberg) -- Moscow will attract double the foreign direct investment this year as the Russian capital promotes plans to become a regional financial hub and expand the subway system, according to a minister in the city’s government.
FDI in Moscow could reach as much as $10 billion a year in 2013 and 2014 compared with $4.2 billion in 2012, said Sergey Cheremin, head of the city’s department for economic and international relations. Investments totaled $5.2 billion through June 2013, he said.
“We are seeing positive trend of increasing foreign direct investments in Moscow,” Cheremin said on the sidelines of a conference in New York yesterday. “Investors are beginning to believe in the stability of the Moscow market. The market is growing and they see a lot of opportunities there.”
Moscow, whose $350 billion gross domestic product is similar to that of Austria’s economy, is targeting more foreign investment as the Russian economy is experiencing the worst slowdown since the 2009 recession. Prosperity Capital Management said this month that Russian minority investors are enduring the worst year for corporate governance scandals since 2009 with disputes at OAO Rosneft, OAO Pharmstandard and OAO Uralkali.
“We still suffer from a lot of stereotypes,” Cheremin said. “There is a strong perception that Moscow is a very corrupt city. The perception is absolutely wrong and the reality is totally different.”
Moscow needs more than $100 billion in infrastructure investments by 2030, he said. As much as 40 percent of the funds will come from private local and foreign companies, according to Cheremin. The city plans to add 150 kilometers of tracks to its subway system by 2020, increasing it from about 300 kilometers currently, he said.
To contact the reporter on this story: Halia Pavliva in New York at email@example.com
To contact the editor responsible for this story: Tal Barak Harif at firstname.lastname@example.org