21:11 GMT +319 February 2018
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    US Billionaire Says Now is Ideal Time to Invest in Russia

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    US billionaire investment mogul David Bonderman believes that there's no time like the present to invest in Russia, adding that US sanctions policy has only backfired on them.

    Speaking at an investment panel at the Milken Global Conference in Los Angeles earlier this week, Bonderman, a founding partner of the private equity firm TPG Capital, noted that with the country starved of investment capital, there are now many opportunities to get in on the ground floor.

    "The market has fallen a long way, and there's a shortage of capital," Bonderman stated, adding that "if you're a mid-to-long term investor, the Russian market has some attractions to it."

    Late last year, sanctions and falling oil prices saw economic growth come to a halt, with the ruble taking a major hit against the dollar and the euro and the stock market tumbling. But the Russian economy has quickly bounced back, with the ruble skyrocketing 25-30 percent against the dollar and the euro over the past three months, and the Russian stock market growing 20 percent since January.

    Commenting on the sanctions slapped on Russia by Western countries over the crisis in Ukraine, Bonderman argued that "sanctions are perfectly set up not to work at all but to make a political statement." They "are designed to be an irritant, not to be effective. There isn't any will to have effective sanctions," he added.

    Sitting on the panel with Bonderman was Ruben Vardanyan, a Russian-Armenian businessman, and former CEO of one of Russia's oldest and largest investment banks, who stated that sanctions only served to grow profits in some sectors.

    The businessman noted that "the restrictions create the opportunity to make more money. For many investors, Russia looks very attractive. It's such a huge market…We made more money in Russia than in any other country."

    Vardanyan added that the ruble's decline last year left the majority of the economy unaffected, with 90 percent of the population not in the habit of purchasing imported goods anyway.

    The panel, moderated by Bloomberg News Editor-in-Chief Emeritus Matthew Winkler, uniformly condemned US sanctions policy as ineffective and short-sighted, with Bonderman pointing out that it was only pushing Russia into the arms of China.

    Last year's outflow of European and American capital from the Russian economy and the rise in undervalued ruble-denominated assets has seen a surge of investment from developing markets from Asia, the Middle East and Latin America.

    Last month, Russian President Vladimir Putin stated that "it's completely obvious to specialists that the main peak of difficulties has passed," adding that Russia has adapted to the new economic conditions.

    Putin added that the country must now work to create conditions to open the economy for international investments: "Attracting private investors must be a benefit for the economy and not a problem. Attracting private investments is one of the general paths of economic development," the president noted.

    Related:

    Obama's Promise in 'Tatters' as Russian Economy Recovers
    Real Cost of EU Loans: Ukraine Economy on Verge of Collapse - French Media
    Russian Economy Has Adapted to New Conditions - Putin
    Tags:
    economic recovery, economic expansion, foreign investment, growth rates, investment, David Bonderman, Vladimir Putin, Russia
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