Saint Petersburg (AFP) - President Vladimir Putin on Thursday said Russia was "counting" on foreign investments to realise major new projects, as the recent arrests of foreign businessmen hung over a showcase economic forum.
Dubbed the "Russian Davos" when the economy was booming, the annual Saint Petersburg International Economic Forum this year also comes amid slowing growth and an ongoing crisis with the West.
"Clearly we are counting first and foremost on attracting investment, both domestic and foreign" in order to diversify and boost the economy, Putin told a roundtable with the heads of major news agencies at the event.
After two years of recession -- caused by a fall in oil prices and sanctions for its role in the Ukraine crisis -- Russia returned to growth in 2017. But its economy ticked up by only 0.5 percent in the first quarter of this year.
Moscow desperately needs investment if it is to fulfil the ambitious goals announced by Putin at the start of his fourth term in the Kremlin last year.
These so-called "national projects" -- ranging from healthcare to infrastructure -- are scheduled to be completed by 2024 and will cost Russia $388 billion.
Some $115 billion of this has been earmarked from private -- Russian or foreign -- investment.
"If we do nothing, we could enter recession by 2021," said Economy Minister Maxim Oreshkin, citing risks associated with the "consumer credit bubble".
Alexei Kudrin, a former finance minister who now heads the Russian Audit Chamber, meanwhile warned that the Kremlin's goal of exceeding three percent growth would not be achieved without significant structural reforms.
- 'Elephants in the room' -
In a sign of Moscow's commercial and political pivot to the East, the guest of honour at the forum is Chinese leader Xi Jinping, who will speak alongside Putin and UN Secretary General Antonio Guterres on Friday.
But on the minds of most at the event will be the arrest in February of prominent US businessman Michael Calvey -- the founder of one of the oldest private equity firms focusing on Russia.
He was arrested along with five others on fraud charges but insists he is innocent, saying the case was fabricated and stems from a shareholder dispute.
Calvey, head of the Baring Vostok fund, has since been placed under house arrest, while his French colleague Philippe Delpal remains in pre-trial detention.
Kudrin, a respected voice in the country's business community, on Thursday told the forum that the case had been a "shock for the economy".
"Since the beginning of this year, capital flight has doubled and is now more than $40 billion," said Kudrin, who has previously criticised the charges.
Finance Minister Anton Siluanov said there was too much discussion of the Baring Vostok case in particular, arguing that the question of judicial independence should be looked at "as a whole".
US ambassador to Russia Jon Huntsman is boycotting the forum in protest over Calvey's arrest.
France, meanwhile, will send its ambassador but no minister. This is in contrast to last year when President Emmanuel Macron led a large French delegation at the forum.
This week, the Kremlin said it wished that Calvey could attend the forum and hoped that he and his French colleague Delpal would be released in the future.
But there was no sign from the investigators on Thursday that Calvey would be allowed the trip.
Running until Saturday, this year's forum in Putin's native city is expected to draw some 17,000 participants, according to the Kremlin, the same number as last year.