The Russian Federation boasts one of the world’s fastest growing economies, with GDP now topping 1 trillion dollars. If we look at the mid-term period from 2006-2010, Russia’s economic growth is expected to average out at 6.3% a year with a 12% growth in investments. And these are conservative estimates – the true figures are likely to be higher. Importantly, on the macroeconomic scale we are seeing continued, long-term stability, and the country’s gold reserves are rising. Our Stability Fund is now worth 140 billion dollars.
The Russian economy is becoming increasingly integrated into the global economy. At the present time, Russian investment abroad makes up 30 billion dollars.
Foreign investment into the Russian economy is also increasing at a very healthy rate: in the first half of 2007, FDI had already reached US$70 billion. All these factors are pushing the economy into a new and innovative phase of its development.
Constant dialogue and mutual understanding between the government and foreign investors are essential to this process of integration and growth. The European Union is one of Russia’s main economic partners. A great deal of work is being done within the Consulting Council on Foreign Investments. During the roundtable entitled “Dialogue with Foreign Investors” at the Economic Forum in St Petersburg, it was pointed out that: 52% of foreign investors consider that investments into the Russian economy bring higher than average yields. 53% of investors evaluate the potential risks in Russia as “average” in comparison to the situation in other developing countries. Clearly, these figures explode a number of negative myths about investing in Russia.
The main barriers to investment are bureaucracy and corruption. The government fully recognises the seriousness of these problems and is taking measures to deal with them. We clearly understand that by reducing administrative headaches, we can reduce costs to business that arise from excessive government interference. It is necessary to remove superfluous interference from the government.
In 2007, we plan to open new multi-functional government offices that can provide a range of government services under one roof (taxation, federal registration, land registry, etc.). We need to have clear regulation of government bodies and less personal interference to discourage corruption. Of course, this will also need to be accompanied by appropriate punitive measures for those found guilty of corruption. We need to work on a range of approaches to tackling the problem. The draft law on foreign investments in strategic sectors was amended and passed by the State Duma at its first reading as a valid piece of legislation for protecting national interests, as well as ensuring consistency, clear criteria and transparency in regulating investments in sensitive areas. Now that clear conditions have been set down for granting licenses, we will see more objective decision making.
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