OREANDA-NEWS. On 11 June 2008 IFC announced, that over the past decade, Russia has achieved significant economic growth, better macroeconomic stability, and higher income for many of its people. Despite this, nearly a fifth of its 88 regions rank with the world's poorest places. IFC's strategy in the country focuses on increasing investments in these regions and supporting agribusiness and infrastructure, which are critical sectors for advancing economic growth.

Agribusiness

Through investments and advisory services, IFC supports the full agribusiness value chain—from developing new technologies to efficient processing and retail. We have invested \\$684 million in agribusiness-related projects in Russia since 1996. We expect the country to be a key part of IFC's \\$1.3 billion agribusiness investments in FY08 and to continue growing.

Russia has significant potential in agribusiness. As an exporter of grain, the country could help increase global supply by:

Sustainably cultivating land that was abandoned during transition

Improving farm management and increasing the application of agricultural inputs and plant genetics, which will help boost productivity

Investing in handling, storage, and transportation infrastructure

Putting in place sustainable social and environmental policies

These efforts could help address the global food crisis, create more jobs, and improve the livelihoods of people in rural areas.

Responding to the Global Food Crisis

Lars Thunell, IFC Executive Vice President and CEO, recently participated in the 12th annual St. Petersburg International Economic Forum to discuss the global food crisis. He noted that IFC's response is a market-driven and private sector–led action plan that complements the World Bank's public sector efforts. IFC believes that the private sector has an essential role to play in helping the agribusiness industry address the issue.

The forum brought together more than 2,000 local and international businesspeople, experts, economists, and state officials. Discussions also included Russia's infrastructure, the country's growing role in the global market, and its future development.

Infrastructure and Access to Finance

Infrastructure is also a priority sector in Russia. With an eight-hour time difference between east and west, transportation and logistics are critical for sustaining economic growth, improving market access, and raising living standards. Of IFC's \\$2.8 billion portfolio in Russia, 10 percent is in infrastructure. This includes air, rail, shipping, logistics, water, roads, health, and education. Working with the World Bank, IFC has begun focusing on subnational projects, targeting Russia's remote and poorest regions and supporting their efforts to improve social infrastructure and public utilities.

Energy efficiency is another area that needs attention. Russia is the world's third-largest energy consumer, and spiraling costs are a concern for local businesses. According to a recent World Bank Group study, improving energy efficiency would make the economy more competitive and decrease carbon emissions. To support this effort, IFC is providing advisory services and lines of credit to local banks for energy efficiency financing.

IFC is also supporting Russia's banking sector to expand access to finance throughout the country, particularly in underserved regions. Key areas include housing finance, SME finance, and new financial instruments such as securitization.