Russia Expects 100 Billion Dollars FDI in 2005

Thursday, June 16, 2005

Never mind that the Yukos owners got stripped of their ownership rights in a politically motivated move, foreigners are still eager to take part in the exploration of the commodity and energy riches Russia has to offer. According to a report from the pravda.ru foreign direct investment (FDI) is expected to reach 100 billion dollars this year. That is roughly the same sum that fled the country in the last four years.
Pravda reports:
The economy of present-day Russia can be described as highly differentiated and complicated. The Russian administration is trying to balance between a variety of economic trends, giving world news agencies and foreign observers an opportunity to express their own interpretation of the current state of economic affairs in Russia. Nevertheless, no one doubts that the government controls and affects the nation's economy.
The Yukos case has definitely affected the Russian economy, although it did not became the key factor in determining the investment climate in Russia. Russian Minister for Finances, Aleksei Kudrin, believes that foreign investments in Russia might reach 100 billion dollars in 2005.
In 2004 FDI's amounted to 40.5 billion dollars or 36 percent more than in 2003. Russia's gold and currency reserves have grown 18 percent from 124.5 to 146.5 billion dollars since the beginning of the year, the Bank of Russia reported today. The country expects to become the world's fifth largest holder of forex reserves as long as oil prices remain at their high level. Currently Russia holds position #7 among the world's biggest forex reserve holders.
More from the Pravda:
Nevertheless, Russia has a lot of economic problems to deal with nowadays. They are mainly connected with the weak process of the economic diversification. Russia presumably exports raw materials. Minister Kudrin said that the 5.8 percent economic growth was a stable forecast, although Kudrin added that a higher level of progress could be achieved too. It is noteworthy that last year's growth was registered on the level of 7.1 percent. There are certain problems with the recreation of the transparent economic capital. Spokespeople for the Russian Office of the Prosecutor General say, however, that the department is currently targeting other prominent Russian businessmen. According to Minister for Finances, Aleksey Kudrin, a lesser interference of this agency in the economy may speed up the economic development.
Nasdrowje!

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