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Sunny Start to St. Petersburg Forum

Renova Group billionaire and Skolkovo spearhead Viktor Vekselberg. ?€?It?€™s business that must initiate new political decisions through specific projects,?€? Vekselberg told reporters Thursday after a session at the forum. D. Grishkin

ST. PETERSBURG — The climate, as always, was on everyone's mind as the St. Petersburg International Economic Forum got under way Thursday, with ministers touting favorable investment conditions and business leaders just happy to see the sun.

Last year's forum, the 13th by organizers' count, managed to justify its unlucky number in every way. The global financial storm forced Russia's economic development to the forum's sidelines, and even President Dmitry Medvedev bemoaned the rain and cold weather as he welcomed participants to his native St. Petersburg.

The one blessing, it seemed, was that investors' attention on opening day was squarely on global problems, rather than domestically induced headaches such as a battle for control at TNK-BP or the ongoing legal troubles of Yukos' founders.

Then Prime Minister Vladimir Putin flew to the nearby town of Pikalyovo to throw a pen at billionaire Oleg Deripaska and berate fellow factory owners for not paying wages. The timing and theatrics of the criticism stoked fears among 2009 forum participants that the government would use the economic crisis to tighten its grip on business.

Organizers appeared to have learned their lesson this year, pushing the forum back to mid-June and scheduling Medvedev's opening speech for Friday — when the 2010 forum begins in earnest.

Companies, too, said they would take matters into their own hands this year, after initiatives like Russia's long-running World Trade Organization bid continued to flounder.

“Everyone has noticed the change in mood compared with the talks held during the previous meetings,” said Renova Group billionaire Viktor Vekselberg, whom Medvedev recently tapped to oversee development of an ambitious innovation center in the Moscow region town of Skolkovo.

Last year’s forum saw a lot of criticism from the business community and politicians over legislative barriers, Vekselberg told reporters after a session dedicated to EU-Russia relations on Thursday.

“What I liked [about today’s meetings] very much was that state officials said they saw a clear priority from business. … It’s business that must initiate new political decisions through specific projects, through implementing specific initiatives,” he said.

“And it’s a crucially important change in the dialogue's entire format,” he said.

Other participants also sounded a cautiously upbeat note.

"The atmosphere is definitely more positive than last year — regarding both the weather and business," said Michael Harms, head of the Russo-German Chamber of Commerce.

Reiner Hartmann, president of the Association of European Businesses in Russia, said the tone at the forum had changed now that the hangover of the crisis is lifting. "Our partners are now more open for dialogue,” he said. “They see themselves more sober and realistic."

One noticeable difference this year will be the lack of vodka and other hard alcohol at companies' stands, Deputy Economic Development Minister Stanislav Voskresensky told Reuters.

“Beverages no stronger than wine” will be allowed on the grounds this year, he said. Medvedev has sought to improve Russians' health and productivity through an anti-alcohol drive.

The forum's press office said it was not aware of the ban on booze — once a staple at companies' promotional stands — but noted that Voskresensky was on the forum's organizing committee.

Medvedev's speech Friday is expected to focus on his pet project of modernization, and forum participants said this issue was vital for Russia's continued economic growth.

“I’d like him to say what he has been saying,” Andrew Somers, president of the American Chamber of Commerce in Russia, said, naming as examples Medvedev's anti-corruption drive, efforts to improve relations with Washington and promotion of innovation.

Like last year, Putin is not on the forum's list of participants, which includes French President Nicolas Sarkozy, who will make a speech with Medvedev on Saturday afternoon. Putin is scheduled to go to the Yaroslavl region on Friday to inspect a once-struggling engine plant and to meet with investors from Japan’s Komatsu.

“[Putin] created this event. I don’t think he wants to undermine it,” Somers said, when asked about the reaction to Putin's headline-grabbing trip to Pikalyovo at the opening of the forum last year.

“It’s not in his interest. It [the forum] used to be a Soviet-style thing before he intervened. Now look at these CEOs,” Somers said, speaking after a session attended by ConocoPhillips chief James Mulva, Severstal CEO Alexei Mordashov, Citigroup head Vikram Pandit and other captains of international industry.

South Africa’s ambassador to Moscow, Bheki Langa, said he hoped that the forum would boost international trade for both Russia and his country. “We would certainly like to see greater cooperation between Russia and the African continent,” he said in an interview.

Forum participants also said it was time for business to push politicians for a final agreement on Russia's 17-year bid to join the WTO. Last year, trade officials from Moscow, Washington and Brussels told the forum that the bid could be finalized within a year, only to see their hopes dashed when Russia began to work on a customs union with Belarus and Kazakhstan.

“Business is moving politics. That's why if business tells them: 'Move faster, have fruitful discussions and finally sign it,' the talks will go better,” Deputy Economic Development Minister Andrei Slepnyov said.

Rusnano chief Anatoly Chubais berated Moscow for taking so long with the bid, saying no other country in the world had taken “such an endless and senseless path as Russia.”

“We have turned discussing [the bid] into a bad tradition. As far as I understand, it’s business — Russian and European business — that must speak out on this topic clearly,” Chubais told reporters.

Chubais also said this year’s forum stood out from previous years because of its modernization agenda, which he promised would be? discussed in terms of specific projects. “The modernization agenda has never sounded like this before,” he said.

Slepnyov said the forum's main goal was to make business “understand that modernization is serious and it’s possible to make money on it.”

Sixty percent of the forum's agenda will be about modernizing Russia's economy, Kremlin economic aide Arkady Dvorkovich told Vedomosti ahead of the forum. He said the rest of the time would be spend focusing on “a look into the future” — a mantra of Kremlin deputy chief of staff Vladislav Surkov — and global problems related to the economic crisis.

Despite the optimism on opening day, Chubais was among some participants who had failed to put worries voiced last year about a new crisis behind them.

“It’s absolutely clear that the process of exiting the global crisis … is extremely complicated, Chubais said. “It’s absolutely clear that it’s far from over. And … if we try to find a symbol to describe going out of the crisis, it’s likely not even a W but a classic of the Internet — a WWW.”

Staff writers Nikolaus von Twickel and Anatoly Medetsky contributed to this report.

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