President demands provision of all conditions for investments in Russia

President demands provision of all conditions for investments in Russia

The investment climate in Russia remains “very bad” and is a result of corruption and higher taxes, Russian President Dmitry Medvedev said at the Commission for Modernizing Economy, ITAR-TASS reports.


The president reminded that insurance fees, prices for electricity increased this year, as well as the corruption rate.


The standards of living will not improve until the country becomes attractive for private investments. Medvedev ordered the government to take measures to reduce the rate of social taxes on January 1, 2012.


The president said that tax payments are at a rate of 34%. He ordered the government to prepare proposals until June 1 to implement a mechanism on reduction of insurance fees on January 1, 2012, Finmarket reports.
This will also require reduction of state purchases.

Medvedev pointed out three measures to reduce impact of state companies on the investment climate in the country. Firstly, it needs a schedule of privatization of major share packages in the coming three years. Secondly, it needs more competition by removing CEOs from heading related structures of the government. Thirdly, there is need for preliminary publication on purchases.


Heads of Rosneft and the VTB Bank need to be removed, according to the president, Arkady Dvorkovich said. The board of directors of ROsneft is headed by Vice-Premier Igor Sechin, VTB – by Vice-Premier and Minister of Finances Alexey Kudrin.


Medvedev said that they need to realize state shares in major banks, infrastructure companies. Transneft, Gazprom and the Russian Railways Company need to reduce material expenses at least by 10% annually. Managers that fail need booting.

The president demanded the Federal Agency for State Property Management improve the efficiency of its work.


He also ordered the Russian Fund of Direct Investments to increase inflow of foreign capital to at least five-fold of the fund’s finances. The fund currently has $2 billion.


Medvedev reminded about implementing a new official responsible for investments in every federal district.

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