From a speech of Iosif Ordzhonikidze, deputy mayor of Moscow and vice-president of the Moscow International Business Association, at the IV International Forum Moscow-Invest

Although in the last century, Moscow was developing as a major industrial center, 1996 saw the announcement of a concept for the transformation of Moscow into an international trade, tourist, and financial center. You understand, however, that it is easy enough to state a goal but it is much more difficult to transfer a city from one economic and social state into another.

It means that we must review everything: both the general city development plan and its entire infrastructure. It also means a change in the deployment of productive forces in the city itself. All of which must be done so as to prevent social upheavals, mass unemployment, and so on. The personnel training and retraining system should keep pace, too, particularly in the industries we are talking about.

The city economy is on the rise, and the replenishment of the budget causes no concern. The rate of funding of the city’s social needs has already topped 45%. There are few countries in the world to spend nearly half of their budget on social policy. But this is our pivot, our base on which our investment policy is, and will continue to be, built. Today, we are happy to state that, with the transition to a market economy, we reached a state when the city never faces any big unemployment problems. The present rate of unemployment in Moscow is 0.65%. This is less than nothing. Yet, this indicator is roughly three times as high Russia-wide, and it may be as high as 10% or higher in industrialized countries.

How could this be achieved? It could be achieved, among other things, by a consistent policy of support of small business, which has been pursued in this city for over ten years. Moscow did not escape trends that were observed throughout Russia. Large industry here was falling as it was in all the other areas. Yet, unlike other areas, another sector of the economy, small business, came into operation in Moscow. In the last seven – eight years, more than 200,000 new small businesses made their appearance. It means that nearly half of the city today is employed in small business. It means that nearly half of the city budget today is formed by small business. It means that small business has become the basis of social and political stability in our city. We consider it a very serious victory and continue our work precisely on this basis.

Finally, we are quite clear about the areas where we need significant financial investment and the areas where the situation has practically been reversed.

The time of spot investments is over. I remember how I flew to Munich in 1992 to carry on talks with the management of a leading German corporation. I asked them to build their office in Moscow, promising them the best land plot, and so on, and so forth. We permitted them to build almost for free, because at that time we badly needed precedents, big names, which would draw all the others. Basically, any new investor was a most welcome guest in the 1990s. Yet many refused to come, preferring to wait.

Now, somebody tells us that he has, for example, some hot $20 million. Can we offer him a real estate project? But here we are sitting, thinking gloomily that we are simply too busy to get involved with this. As well as uninterested. The business community itself decides which projects to choose. MICEX, for one, is perfectly qualified to do the job. The process of privatization in commerce and the services is over, and in industry, almost over. It means that there are owners everywhere, just the people with whom we should negotiate.

Time is ripe for system-forming investments. We should invest in system-forming industries. If it is industry, it means new technologies, high-tech – here is Zelenograd to you. You are welcome; we are looking for new technologies. If we are talking about the recreation industry, here you have Mnevniki, Moscow Disneyland, 220 hectares, a vast investment field, more than 40 hotels in Mnevniki alone, to say nothing of transport, night-life city, and so on. If we are talking about entertainment, here you have the Nagatino floodplain, 180 hectares. If it is real estate you are after, here is yet another system-forming project, Moscow City, please come and do business there. As for small investments for spot development, we cannot help you here, and you’ve got to make them without us.