“Nationalized Finance: Russian Direct Investment Fund Focuses on Helping Country Expand and Grow” (Vesti News, 6 August 2018)
An interesting and informative news documentary from Vesti News on Youtube has been attracting attention on how Russia’s sovereign wealth fund, the Russian Direct Investment Fund (RDIF), invests its monies in major infrastructure projects and other projects in Russia deemed to be of national importance together with private and foreign investors. Through partnerships with large private investors and foreign government enterprises and investment funds, the RDIF selects what it considers the highest quality ventures – perhaps only a dozen or so out of thousands of such projects at any one time – and puts in money together with its partners at a ratio of 1 ruble for every 9 rubles the private or foreign investor invests. What criteria are used to determine which projects are selected for investment are not mentioned in the documentary but one yardstick is that for every ruble the RDIF invests in the project, there is a return of 3 rubles annually over the following 5 – 7 years of the project’s life.
After a brief explanation of what the RDIF does, where it invests and how it invests, including how it filters out projects deemed unsuitable for investment – unfortunately the English-language subtitles don’t do a great job of translating the Russian language narration, and miss out on two key areas of RDIF investment – the documentary dives straight into various case studies: a cancer research centre in Balashikha (Moscow oblast); Vladivostok International Airport; a co-investment with an Italian state road infrastructure investor into a road network linking Moscow with Rostov-on-Don and Krasnodar in the southern part of European Russia; a petrochemical construction site in Tobolsk; various co-investment fund platforms with Middle Eastern private and government investors; a fertiliser plant in Cherepovets; and a pharmaceutical company making insulin in Saint Petersburg. Case studies may feature attractively animated statistics that ingeniously stick themselves to the sides of buildings or onto roads; more prosaically, the narrator rattles off facts and other statistics in rapid-fire fashion and interviews various company spokespeople.
Dense on information and going bang-bang-bang with facts, the documentary needs a couple of viewings to be fully digested. It could be organised a bit better: more information about how the RFID was developed and the reasons why it came into being would have given a historical context for foreign viewers; the case studies could have been dealt with at a slower pace and in more detail; and maps showing where cities like Balashikha or projects like the M-4 “Don” highway are located would have been welcome. The case studies on the cancer centre and the Saint Petersburg pharmaceutical firm could have been grouped together. Surprisingly there were no case studies on agricultural projects (given that Russian agriculture has received an unexpected boost from US and European sanctions placed on the country in 2014 after Crimea joined the Russian Federation), especially those agricultural projects benefiting from technological innovations. The attractive female interviewer may be a distraction for some male viewers. 🙂 For the time being, this documentary is a good introduction to Russia’s sovereign wealth fund and the ways in which its monies are used.