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Russia's special-purpose investment fund could receive Rub 35-37 bln ($1.2-1.3 bln) in 2007 (More) Russia's July international currency reserves jumped 6% or $15.1 bln, to reach $265.6 bln. These figures were shown in a press released posted on the web site of the Central Bank of Russia. (More) Cash surplus was 8.7% of GDP in January-June, 2006. (More) Russia's foreign trade surplus was $86.2 bln in H106. (More) FSB and Defense Ministry to Develop Kuriles (More) On July 4-6th, 2006 the working trip of Minister of economic development and trade of the Russian Federation G.O.Gref to Kingdom Netherlands took place (More) |
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News about Russia 
News / On July 4-6th, 2006 the working trip of Minister of economic development and trade of the Russian Federation G.O.Gref to Kingdom Netherlands took place |  |
| Russia launches new offensive to attract foreign investment The Russian government is launching a new offensive to attract more foreign investment. ?The Russian economy is too dependent on sectors like oil and gas,- said Economic Development and Trade Minister German Gref during a talk in The Hague. The Netherlands is an important trade partner for Russia. Direct foreign investment in Russia totalled 13 billion dollars last year. The Netherlands accounts for 30% of that. Large multinationals like Shell and Heineken are leading the pack. During his visit to the Netherlands Gref spoke with prominent Dutch businessmen, including Shell CEO Jeroen van der Veer, and caretaker state secretary for economic affairs Karien van Gennip. In order to broaden the Russian economy, Gref wants to attract more foreign investors by opening up six special economic zones, two focussed on industrial production, and four focussed on technology and innovation. Another two focussed on developing the tourism sector and infrastructure in the Russian ports will follow. Gref: "We are investing 300 million dollars in the infrastructure of these experimental areas for a liberal investment climate. Our goal is to make the most of foreign investment by reducing bureaucracy as much as possible and meeting the wishes of foreign businessmen by providing fiscal and other amenities". Russia says it can guarantee foreign investors a stable investment climate on these points for decades. There is an investment threshold of 5 million dollars for both zones aimed at industrial production (automobile parts, chemicals and consumer electronics). There is no such requirement for the innovation zones (biotechnology, medical technology, nano technology). Gref stressed that in a transition economy like Russia's it is important to first experiment on a limited scale in six zones. "We want to gain experience and learn from unanticipated mistakes. Only after that will it be possible to expand the zones". During his two-day visit to the Netherlands Gref visited innovation centres in Delft and Leiden. He discussed the trade and investment relationships between the two countries with state secretary Van Gennip. He also presented his plans for the special economic zones to a group of Dutch businessmen. Karien van Gennip, who replaced resigned minister Laurens Jan Brinkhorst for Gref's visit, said this was a good sign. "This proves that the Russian government is doing its best to create a better investment climate. This is important for the Netherlands because our country is one of the largest investors in Russia". There is much concern internationally about the investment climate in Russia. Most of this concern regards the state intervention in the business sector, which is increasing under President Putin. The best known example of this is the staggering re-nationalisation of the Yukos oil company. But state companies, like Gazprom, are also making more acquisitions in other sectors, sometimes on unclear terms. In addition there is said to be a lot of nepotism. Some companies are given all sorts of exemptions, while others groan under the burden of an arbitrary tax regime. Last spring Minister Gref put together a list of 39 strategic sectors, like the arms industry and space industry, in which the opportunities for foreign investors are limited. The list is intended to make it clear to private companies which sectors remain unrestricted. The proposed bill from Gref has not yet been approved by the Duma however, the Russian parliament. "The delay is a result of the pressure being exerted on me to make the list longer", admits Gref, who is known as the most pro-reform minister in the Russian government. "As a minister of economic development and trade I belong to the moderate liberal camp. But in Russia you are very easily considered radical then. I am a proponent of as little state intervention in the economy as possible. My motto for the Russian economy is as much competition as possible and equal conditions for everyone. I have always said that and I continue to believe that is the best way". To the question of whether the Russian economy is moving in the right direction, he answers with an unequivocal "yes". "That doesn't mean I don't have criticism on some points. There are things going on which I personally have problems with. The government should be less involved in business. The privatisation of state interests could also happen more quickly". He gets annoyed when confronted with the argument that reform is not moving fast enough: "It is difficult for a journalist in Amsterdam to judge that. The Russian economy is in transition after 60 years of communism. That is a gradual process for which there are no blueprints". Van Gennip says an important aim of the Russian minister?s visit is to change the Dutch perception of Russia. "It is also very important to us to have Russia as a stable business partner and an important player in the eastern hemisphere. We would really like to step up the economic relations". Russia is an important supplier of energy to the European Union. At the beginning of this year the Russians gave the Europeans a terrible fright when they shut off the gas supply to the Ukraine after an argument about gas prices with the pro-Western former Soviet republic. Since then the EU has been waging a debate on "energy security". Gref put the EU's fear of too much dependence on Russian energy supplies in perspective. "The Russian consumer markets are half made up of imports, largely from the EU. What if these imports were to stop" The mutual dependence between the EU and Russia is in fact the best guarantee for a sunny future as new neighbours". Van Gennip agrees with this. "We are becoming more and more dependent on each other. Whether it is energy, food or clean drinking water. That is a fact. Countries with lots of natural resources are also becoming more important. That is difficult for Europeans to accept". The state secretary says that a new balance of power will be created in the world in the coming decade. The EU will have to decide what its attitude will be towards new world powers like China, India, Brazil and Russia. "The EU can only be a part of this if the whole union is willing to cooperate. EU countries who want to play this role individually will have a difficult time of it". | |