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The growing partnership between Russia and the Islamic world promises a flow of investments from rich countries of the Middle East in the nearest future. What prerequisites are needed for the realization of joint investment projects? Are there any difficulties?

The growing partnership between Russia and the Islamic world promises a flow of investments from rich countries of the Middle East in the nearest future. What prerequisites are needed for the realization of joint investment projects? Are there any difficulties?

Investment forum will be held in the framework of the II International Summit of Islamic Business and Finance on June, 28 and June, 29, 2010 in Kazan. Ainaz Faizrakhmanova, chief of the project management team of the IFC “Linova”, comments on the prospects of the investment work.

- Ainaz, which branches of Russian economy are interesting for investors from Muslim countries? Which regions are the most suitable for investments? Are there any barriers for Islamic investments in Russia? Is the presence of Muslims in a region important for investors, or their decisions are based solely on reasons of profitability?

- First of all, Russia is an observer state in the Organization of the Islamic Conference (OIC). Secondly, favorable investment climate is created in Russia. Our country is attractive to Muslim investors. They pay special attention to such sectors as energy development, industry and agriculture.

Those regions, which are most hospitable to foreign investors, are suitable for investments, e.g. Volga region and particularly Tatarstan.

We don’t see any barriers for Muslim investments. All difficulties are solved in the regular course of work.
One of the factors important for investors is the presence of a Muslim community in a region. But I can’t say it’s the crucial factor.

Many Muslim investors expect not only to pay off their investments, but also to secure social benefits for people.

- Are there any analytical records or analytical calculations on the attraction of Islamic investors in Russia? What can you say about this experience and the potential of this trend?

- Yes, these records are in the public access. However, the results of this work for the last five years are not satisfactory. I don’t want to judge the work at the federal level, but our regional experience is quite miserable.

Islamic investors have their own preferences. And the quality of the recent projects does not meet their criteria. The Investment and Financial Company “Linova” actively attracts direct foreign investments into the region. Many investment projects, which were adjusted to the format of Islamic countries, aroused great interest of Arab investors. It is difficult to make predictions about the attracted investments. Everything depends on the competence level of Russia businessmen.

- Could you tell us about the outcomes of the Investment Forum 2009? Which positive results did it have? As far as we know, a Guide to Islamic finance was issued in 2009. Was this project efficient?

During the Summit in 2009 various business-meetings for the presentation of the investment projects were held. There was no separate investment forum at that time. But even these meetings had their positive results: investors acquainted themselves with the business potential, and saw the desire of Russian businessmen to attract alternative investments. Businessmen had a wonderful opportunity to overestimate their projects from the perspective of their price (it is important to demonstrate the real expenses), and to follow the entrance and exit strategy more responsibly. The results are positive on the whole. We should work further, so that investors from the Middle East and the South East could learn more about Russia.

Many Russian financial institutes have studied the Guide to the Islamic finance, which became the first ever investigative work of such a level. And consequently, the mission of the project is not commerce, but education. According to the data we have, those companies which studied the Guide began thinking about alternative financial instruments in compliance with Russian legislation.

The Guide helps to increase the number of financial instruments which exist in Russia. Islamic finance should complement the existing financial system, as it will help to diversify Russian economy.

Islamic-Finance.ru based on materials of IslamRF