Prospects of the Russian Economy and Finances and their Role in the Global Economy Перспективы российской экономики и финансовой системы и их роль в глобальной экономике Triangle Club International Moscow, November 20, 2012 Arnaud Leclercq Partner, Lombard Odier Capital Partners

Клуб Триалог предоставляет действующим членам скидку в размере 10 % на продление членства в гг. в случае, если взнос будет оплачен до 30 ноября 2012 г.: ПРОДЛЕНИЕ ЧЛЕНСТВА В КЛУБЕ ПЕРИОДИНДИВИДУАЛЬНОЕ ИНДИВИДУАЛЬНОЕ (С УЧЕТОМ 10% СКИДКИ КОРПОРАТИВНОЕ КОРПОРАТИВНОЕ С УЧЕТОМ 10% СКИДКИ – (1 ГОД) 25,000 РУБ.22,500 РУБ.38,000 РУБ.34,200 РУБ – (2 ГОДА) 45,000 РУБ.40,500 РУБ.65,000 РУБ.58,500 РУБ.

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Prospects of the Russian Economy and Finances and their Role in the Global Economy Перспективы российской экономики и финансовой системы и их роль в глобальной экономике Triangle Club International Moscow, November 20, 2012 Arnaud Leclercq Partner, Lombard Odier Capital Partners

Russian economy is now recovering from Growth Growth was above 4.5% last two years and should be above 3.8% this year Budget Last 12 years: mushrooming expenditures fuelled by 388% increase of oil prices between 2000 & By 2015, Russia might face a current account deficit Employment Unemployment went down to 5.2% in August 2012, which is historically low. Increase of social expenditures had positive results. Inflation & competitiveness Increase of social expenditures did not create inflation. In fact, its decreasing since 2008 and stabilised at 6.5%. International trade During the first months of 2012, the trade surplus declined In 2013 & 2014, Russia will face the economic slowdown of its main economic partners. Financial sector From June 2011 until June 2012, MinFin and CB have in fact financed 40% of the volume of credit increase. 5 Quick overlook on major economic aspects: ALC

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Three aspects are creating some uncertainty for the near future: Russias budget is still extremely vulnerable to oil price swings General economic slowdown in the world. Impact of shale gas resource Russias budget is still extremely vulnerable to oil price swings General economic slowdown in the world. Impact of shale gas resource Source: U.S. Energy Information Administration, Annual Energy Outlook 2012Annual Energy Outlook 2012 ALC

Investment climate should be improved There should be positive & important signs for investors Russia starts to lean a bit more East Russian business should talk directly to EM Economy is growing 3.8% - Capital outflows are still high ALC

RUSSIA & THE EURO CRISIS Russian authorities have contrarian views: Support the construction of the EU (MID) Criticism of the Eurozone (Kremlin) Russian authorities have contrarian views: Support the construction of the EU (MID) Criticism of the Eurozone (Kremlin) ALC

The cost of keeping the Euro vs the cost of exiting 8

Russia, a Eurasian alternative centre of economic power In its History, Russian has never been as strong as when it accepted to look East Its relations with the West were an accumulation of wars, misunderstandings, humiliations The true disconnection between the West and Russia is recent Conversely, every time Russia based its equilibrium and strength on Asia and Eurasia, it succeeded in a much easier way Recent partnerships with the East are doing well and remain promising In its History, Russian has never been as strong as when it accepted to look East Its relations with the West were an accumulation of wars, misunderstandings, humiliations The true disconnection between the West and Russia is recent Conversely, every time Russia based its equilibrium and strength on Asia and Eurasia, it succeeded in a much easier way Recent partnerships with the East are doing well and remain promising ALC

Recent partnerships with the East remain promising New pipelines to Japan and Korea New silk road Arctic oil & gas reserves Good relationships with Central Asia States and India Diplomatic warmth with Japan All frontiers issues with China now solved By all means, Russia has to assume its Eurasian identity Developing countries start to cooperate directly between one another Russia can be more than a facilitator between the West and the East ALC

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