Complementarity of economies is a key to success of strategic partnership

Italy and Russia have a long history of fruitful, mutually beneficial cooperation dating back to several decades. How would you characterize the relationships between the two nations today?

If we analyze the Russian-Italian relations, beginning from the time of the Unity of Italy in 1861 till the present day, we shall see that they have enjoyed an unusual boost in the past few years to reach unprecedented heights today. Vast geographical distance, different views on geopolitical interests and ideological confrontations in the past have never prevented Rome and Moscow from having a dynamic political dialog and developing numerous forms of economic cooperation. Indeed, the relations between our countries over several years had grown in line with the view expressed at the end of the 19th century by one of Italian ambassadors that said “Russia and Italy could never do each other ‘too much good’ or ‘too much bad.’” The first significant turning point occurred during the Cold War period, when Soviet-Italian economic cooperation, the perfect examples of which included the construction of a Fiat plant in Tolyatti and the beginning of cooperation in the energy sector, was started. This policy promoted rapprochement between the two blocs that the world was divided into then. However, not even the most optimistic analysts could foresee that the dynamic economic and trade relations of those days could lead to the outstanding cooperation potential between our two countries today. However, it was only in the 1980s-90s that Italian investors started to develop new forms of trade cooperation with Russia as they rose to meet the new business challenges that opened up in the country with honor. Thanks to this positive background, it became possible for our countries to make a new qualitative breakthrough in implementation of unprecedented projects in various fields of political, economical, social and cultural cooperation.     

Are you satisfied with these level and scope of bilateral relationships, a) if yes, why, b) and if no, what then should be done to boost the relationship to the desired level?

The results of bilateral trade turnover figures and economic cooperation are flattering indeed, but we believe that we still need to improve them further, as we are sure that there is still huge potential for boosting the current level of our bilateral cooperation. The Russian government has called Italian companies examples of reliability; such acknowledgement is an incentive for Italian companies to firmly establish themselves as natural partners of Russian corporations. Numerous steps recently taken by the Italian government for maintaining open dialogs with Russia, and also the effective coordinated support by Italian institutions in Russia, notably, the Embassy, Italian Institute for Foreign Trade (ICE), Chamber of Commerce (CCIR) and Association of Italian Businesses (GIM-Unimpresa), have helped to promote the expansion of the bilateral cooperation and contributed to the strengthening of the atmosphere of trust and respect of mutual interests, where the relations between the two countries’ business communities have been established and developed. We shall make further efforts to preserve these perfect conditions. 

We, as a business publication, are more interested in the economic ties between countries. In this regard, how would assess the volume of trade and investment flows between Russia and Italy, at least, in the past two years?

The situation in the past year had been influenced by the global economic crisis, therefore 2009’s performance can be considered as representative of the real tendencies in our bilateral economic cooperation. Indeed, in the first months of this year, we have started to see the first signs of recovery of the positive growth pattern that began at the end of the 1990s and made Italy Russia’s third largest trade partner. It is worth noting that the crisis did not stop the realization of strategic mutual investment projects, as both countries are deeply convinced of their abilities to achieve even more ambitious goals. That is why the overall assessment of the results of our bilateral cooperation over the last two years, both from the points of trade turnover and direct investments — Italy’s in Russia and Russia’s in Italy, is positive.        

What position does Russia occupy a) among exporters and importers of Italian goods and services, b) among recipients of Italian investments and c) among foreign investors in the Italian economy?

Italy is the second most important export market for Russia and the sixth in terms of volume of exports to Russia. Specifically, Russia accounts for 2.9% of our exports and 4.3% of our imports. Italian presence in Russia is generally is highlighted by the visible results that Italian brands and companies have achieved in the country. Even without considering the relevant statistics, the level of their attractiveness seems to supersede those of Russia’s other foreign partners. Nevertheless, this particular example does not fully explain the strong points and penetration ability of our economic system. Indeed, we do not only export fashionable dresses, but also equipment, which is our main export commodity.

“The relations between our countries over the years have been growing in line with the view expressed in the 19th century by one of Italian ambassadors that said “Russia and Italy could never do each other ‘too much good’ or ‘too much bad.’”

Several Italian companies are already operating successfully in Russia, while others are planning to come over. As the Italian ambassador to Russia, what recommendations would you give to such Italian CEOs wishing to invest into the Russian economy today? 

Although the global crisis negatively influenced its growth expectations last year, the Russian economy, however, still remains one of the most promising economies on the global scale due to its rich natural resources, low cost of energy, huge domestic market, continuous increase of the middleclass, competitiveness of its labor market and the government’s ongoing efforts aimed at maintenance of production innovations and diversification of the economic processes. In the course of my mission, I have always encouraged Italian entrepreneurs to thoroughly explore all the possibilities for establishing and expansion of our economic presence in Russia, and in most cases, I have been right. It is true that Russia, even the country’s government itself has acknowledged it, still has lots of bureaucratic barriers significantly limiting the possibilities for economic growth. Nevertheless, I have noted that the closer diplomatic interactions and economic interests that have come to characterize our countries’ policies, and also the ability to select and choose the most appropriate business circles have generally made it possible for us to find mutually acceptable solutions to the most difficult issues. In other words, the selection of the best partners is a key element for executing successful projects – a postulate that is true both for economic cooperation between countries and private companies alike. 

As one of the most reliable official sources of information on Italy and its economy in Russia, what advice can the Embassy give to potential Russian CEOs wishing to invest in Italy?

The advice is to invest in an economic system that is one of the world’s most attractive, from the point of industrial competitiveness, bank system reliability and dynamism of a great number of small- and medium-sized business companies. However, the existing complementarity of Italian and Russian economies will stimulate more Russian companies — as some had done so in recent years — to localize their production and goods distribution in Italy in order to have a direct access to Italian consumers. These characteristic features, along with the existence of excellent mutual relations and the Italian government’s positive view on the inflow of Russian investments ought to be duly assessed and noted by potential Russian investors.    

Italian Prime Minister Silvio Berlusconi is an advocate of a visa-free relation between EU and Russia. If this policy cannot be implemented at the EU level anytime soon, is it possible for Russia and Italy to implement such policy on a bilateral level?

“The Russian government has called Italian companies ‘examples’ of reliability, and such acknowledgement is an incentive for Italian companies to firmly establish themselves as natural partners of Russian corporations.”

Italy is a part of the Schengen zone, where an agreement on free movement of people has been reached by member countries. This implies that issues of a visa policy in respect to third countries are collectively solved by member countries, and also neither of the members has the right to unilaterally adopt decisions on a visa-free entrance on its territory for citizens from third countries. As for the decision-making mechanisms within the EU, the coming into force of the Lisbon Agreement will certainly lead to some important changes, because effective from 2014, it will be possible for the EU members to make decisions by the so-called ‘a supermajority or qualified majority’ – on a number of issues, including visa-related ones. However, I need to mention here that without waiting for that period, an EU discussion on the possibility of simplification or outright abolition of the exiting visa regime for Russian citizens has already started. In this context, Italy, as have repeatedly been noted by Prime Minister Berlusconi and Foreign Affairs Minister Frattini, is of the opinion that the necessary conditions have been created and the time has come to consider as ‘a realistic possibility’ the idea of abolition of the EU’s visa regime for Russian citizens. 

Still on geopolitics, Russia and Italy share common or almost the same views on a range of geopolitical issues. In this regard, which areas do you think such cooperation can yield the most fruitful synergies on the international arena?

Russia and Italy are productively cooperating in solving many international problems. First of all, our countries are both involved in the stabilization process in Afghanistan for the sake of the common goals of fighting international terrorism and democratization of the country. The peace process in the Middle East is another sensitive issue, where our points of view are very close. Indeed, the Moscow March meeting of the Middle East ‘Quartet’ gave timely and important signals. The policy on the nonproliferation of weapons of mass destruction is another important example of joint actions by Italy, Russia and other key partners aimed at strengthening the existing regime of nonproliferation of nuclear materials. Finally, I would like to remind you of the huge attention that has been devoted by Italy to the discussion of the Russia’s initiatives on boosting continental security in Europe, including energy security.