Talia Minullina on investors: ‘When analysts predict a slowdown, stability is key’

Charging with optimism, or Being in the arms of a yellow snake

Uncertainty in the economy makes it difficult to be optimistic. Investors have to rethink investment strategies and re-calculate risks. But the main thing is that they do not abandon major projects in the republic, the guests who arrived the night before at the final meeting of the Tatarstan investors club at TASIGO Kazan Palace hotel told reporters. Talia Minullina, the head of the Investment Development Agency of the Republic of Tatarstan, has been gathering investors and top officials of the Republic for almost 10 years in a row at this site. But this time, there was a desire from the hostess to “relieve tension” from investors who found themselves in a moment of turbulence. Each of the invited economic experts assured from the podium that in difficult economic moments it is important to be able to refocus in time, rebuild the business and look for new sources of growth. Did this boost of energy work? Or did it work as a sedative?

The hall was full, and, as usual, there was a strict dress code. The guests were instructed to wear black. But few men have changed their wardrobe for the occasion this time. The men in tailcoats with a bow tie, as prescribed by the organisers, did not meet. Thus, the prime minister of the Republic of Tatarstan, Alexey Pesoshin, was in his usual work suit with an English collar, and the head of the Zelenodolsk district, Mikhail Afanasyev, arrived in a dark blue jacket with a stand-up collar. By the way, the oriental style prevailed in the business wardrobe of Tatarstan officials several years ago, and it happened immediately after the renaming of the post of the head of the republic. No matter how you look at it, the title raïs is undeniably of Eastern origin.

Only the invited ladies followed the dress code exactly. The head of the Tatlift company particularly stood out, dazzling in a floor-length black dress. But the head of the Tatarstan Development Agency, Talia Minullina, chose the sand colour of her costume as a sign of the coming year of the snake. Here the club's organsers had a surprise in store for the guests. In the evening's sidelines, daring young women posed for photos with a live, trained snake wrapped around their necks. It looked like it was a yellow cobra brought by the artist of one of the evening's acts. To take a photo with it, guests stood in line. Maybe five minutes of such hugs will really bring good luck?

Downward trend in investments

How will the “yellow cobra” behave in relations with private capital? It seems that there are fewer and fewer illusions. Although the outgoing year promises to leave good results: the volume of extra-budgetary investments by the end of 2024 will amount to 1 trillion rubles. “Extra-budgetary investments remained at the level of the previous year," said the head of the Investment Development Agency. But businesses cannot find an impulse to growth yet, so a decrease in investment activity is expected.

“Almost any expert, world-class analyst and Russian colleagues will support this idea. In 2025, there will be a trend towards a slowdown in investment plans," Talia Minullina said, although she attributes the slowdown to the effect of a high base, rather than an economic recession. “It is constantly impossible to grow at such a tremendous rate, with which our country has been growing for the last year or two.

The interim results show an increase. According to her, the volume of investments in Tatarstan's fixed assets for 9 months amounted to 845.3 billion rubles, which is by 2.1% more than in the same period of 2023. Of these, private investments amounted to 706.4 billion rubles.

How China overcame the technological dictates of Germany and Japan

Andy Xie, guest speaker and Doctor of Economics from the Massachusetts Institute of Technology, compared the current situation to China's economy in the mid-1990s, when authorities had to take emergency measures to combat inflation. In his opinion, the high key interest rate in Russia slows down the investment flow, but, apparently, otherwise it is difficult to cope with inflation. China followed a similar path when the authorities needed emergency measures to combat inflation. According to him, the country's authorities felt strong pressure from Germany and Japan, after which they built an independent policy for the development of advanced technologies.

The government invested huge amounts of money in artificial intelligence technologies and 5G networks. China has found itself at the forefront of the fourth industrial revolution, ahead of European countries. But first, it took the authorities 5 years to overcome inflation in the country, he noted. “Previously, 2/3 of China's exports were light industry products, but today they are technologies and equipment," he stressed. According to him, Russia must embark on the path of innovative development, and the authorities must be consistent in their relations with investors. “Every investor must have a guarantee of money return," he emphasised.

Mohammed Shahid Khan, the managing director of Moonshot Advisory and a member of the board of directors of ICPYPEX from the UAE, urged businesses to rebuild their structure to meet new realities and look for sources of profitability in new sales channels. “Companies can fail, but you need to be able to refocus in time," he advised. According to him, it is important to make bold personnel decisions and build a management culture.

Ammonia 2 is postponed to 2025, and China is asking for cheap energy

The forecast for a slowdown in investment activity should not be interpreted as a verdict, Talia Minullina noted later in a conversation with reporters. According to her, investors need to conduct a more nuanced analysis of the effectiveness of projects, relying on government support. “The financial model, which is the heart of any investment project, can be stabilised with support measures. There are 3,700 measures in force in the republic, there is a calculator of measures on the investment portal, and you can see which one corresponds to their business," she said.

In practice, local authorities may not have enough money. At a meeting of the club, the Chinese investor DAVN asked to provide three measures of assistance in Tatarstan. DAVN works in partnership with the global technology manufacturer Haier, engaged in polymer processing. He asked to connect the production to electricity at a high voltage level to get cheap energy. Until now, residents of industrial parks have enjoyed preferential tariffs at an average voltage level. Secondly, the investor asked to pave the way. Thirdly, to assist in the gasification of the Industrial Base Industrial Park. Indeed, the republic's budget includes expenditures on engineering infrastructure for residents, but they will need to be fought for, Talia Minullina later said.

However, they are not going to pause projects in the republic: they plan to start building Ammonia 2 worth 250 billion rubles at the end of 2025. A company representative said that the necessary expertise for the construction of the second stage of the fertiliser plant will be completed in the first or second quarter of next year, and construction is scheduled to begin in November. Before that, the Ammonia 2 was going to start construction at the end of this year. Sources explained the postponement of the deadline by difficulties with the delivery of equipment.

Money for export support

Next year Tatarstan will rely on attracting federal instruments of state support for investors. It became known that the head of the Tatarstan Development Agency was included in the commission of the State Council for International Cooperation and Export under the leadership of Alexander Tsybulsky. By participating in it, Tatarstan is going to attract resources to support non-primary exports. “There has been a meeting on this topic recently. Support for export products is being discussed at the federal level with new opportunities," she told reporters.

Another channel is preferential loans from the Industrial Development Fund. According to Minullina, there are many applications in the republic, but the limits of the fund do not allow them to be closed. In conclusion, Prime Minister of the Republic of Tatarstan Alexey Pesoshin said that Tatarstan still holds the leadership in terms of investment attractiveness. The republic remains in first place in the Volga Federal District and in sixth place in the country. The prime minister promised to be open in relations with investors. “Do not change your aspiration to become the best," he encouraged.