Investment into Russia Rose 10% to $170Bln in 2013
The volume of foreign investment in Russia grew by 10.1 percent in 2013 to reach $170 billion, according to the State Statistics Service.
Of this, $26 billion was foreign direct investment, an increase of almost 40 percent year-on-year, Prime news agency reported.
At the end of 2013, the sum total of foreign capital in the Russian economy was $384 billion, up 6 percent from 2012. Sixty-six percent of the accumulated capital was categorized as other investment, which will eventually be withdrawn by the investor. Thirty-three percent was direct investment, the State Statistics Service said.
Russia, meanwhile, sent $201.6 billion of investment overseas in 2013, 34.5 percent more than during the previous year. Total Russian investment accumulated overseas was $176 billion at the end of 2013. (MT)
Minister Blames Prohibition Mindset for Capital Outflow
Deputy Economic Development Minister Sergei Belyakov on Friday said that capital outflow from Russia is in part fueled by the prohibitive model of economic management employed by the government.
"We are always fighting things: we are fighting capital outflow, fighting offshore tax havens, fighting corruption-related risks and fighting potential crimes," he said at a business breakfast organized by Vedomosti.
"By fighting everything on a daily basis we have shaped a model of legislation and bureaucratic behavior based on prohibition," he said, PRIME reported.
Entrepreneurs, as a result, have to prove constantly that they do legitimate business, he said.
"Clearly, at some point they get fed up," he said.
The Central Bank is forecasting a net capital outflow of 20 billion rubles ($600 million) this year. Last year, 63 billion rubles left the country, according to the regulator. (MT)
Dvorkovich Sees 4% Economic Growth Next Year
Deputy Prime Minister Arkady Dvorkovich on Friday said the country's economy could accelerate to a growth rate of 4 percent next year, in stark contrast to Economic Development Ministry forecasts that see the Russian economy struggling to rise above 3 percent growth for the next two decades.
The measures that the government is implementing for an economic rebound could start to bear fruit next year, Dvorkovich said at the annual Krasnoyarsk Economic Forum.
The measures include providing greater access to state contracts to small and medium-sized businesses; and creating a state fund that would guarantee loans for this type of businesses.
Former Finance Minister Alexei Kudrin disagreed, saying that the growth rate would hover around 1.5 percent if the government went on with its plans to splurge money on defense contracts, instead of investing in roads and education. (MT)
Olympics Raised Trust In Russia, Says Dvorkovich
Deputy Prime Minister Arkady Dvorkovich said the Sochi Winter Olympics increased trust in Russia among potential foreign partners, which could boost the local economy.
The Games, which ended Sunday, were preceded by a glut of Western media reports pointing to corruption, environmental violations and frantic last-minute preparations. But President Vladimir Putin said he thought the media coverage of the Olympics themselves was positive.
"The Russian economy will not be OK without a favorable external environment," Dvorkovich said at the Krasnoyarsk Economic Forum Friday, RIA Novosti reported. "The Olympics … created an atmosphere of trust in what is going on in Russia, trust toward people living in Russia, and it proved that we are not only able of promising, but also able to fulfill promises and achieve tangible results." (MT)
Estonia and Finland Sign Agreement on Construction of LNG terminal
Estonia and Finland signed an agreement on Friday on building two new liquefied natural gas terminals on either side of the Gulf of Finland and a pipeline connecting the two countries.
The countries have competed for more than a year over a project to build a new LNG terminal and the Estonian Economic Minister Juhan Parts made the compromise proposal in January this year.
"The intent of the signed Memorandum of Understanding is for cooperation between the Estonian and Finnish LNG terminal developers to build liquefied natural gas terminals on both sides of the Gulf of Finland," the Estonian economy ministry said in a statement.
A single LNG terminal is estimated to cost about 500 million euros ($690.58 million) and provides an alternative to gas supplies from Russia. (Reuters)
Gazprom Neft Profits Rise 1% to $5Bln in 2013
Gazprom Neft, an oil arm of state gas company Gazprom, posted 177.9 billion rubles ($5 billion) in 2013 net profit, up 1 percent year-on-year.
In 2012, Gazprom Neft saw net profit at 176.3 billion rubles.
The company said in a statement on Friday its revenues were down 1 percent to 1.5 trillion rubles last year. (Reuters)
Russia to Resume U.S. Pork Imports From March 10
Russia plans to resume pork imports from the U.S. around March 10, the country's veterinary and phytosanitary service, or VPSS, said.
Most meat imports from the U.S. were banned early last year due to concerns over the use of the feed additive ractopamine.
"It is an approximate date," VPSS spokesman Alexei Alekseenko said. He declined to offer further details.
Ractopamine is a growth stimulant used to make meat leaner. It is banned in some countries because of concerns it could remain in the meat and cause health problems, despite scientific evidence showing it to be safe.
On March 10 Russia plans to allow imports from several companies that have guaranteed they do not use ractopamine, Interfax reported late last week. (Reuters)
Kazakhstan to Launch New Domestic Airline
Kazakhstan is to launch a new domestic airline, the oil-rich country's sovereign wealth fund has announced.
The airline, to be called Air Kazakhstan, will likely be based on a fleet of regional Bombardier planes and aims to rival the existing carrier Air Astana.
President Nursultan Nazarbayev said during a meeting with Bombardier CEO Pierre Beaudoin on Wednesday that Kazakhstan was pursuing a contract with the Canadian company to supply planes for the service.
Nazarbayev added that the experience gained from creating Air Astana with Britain-based BAE Systems could be used to launch the new airline.
Air Astana, the country's largest airline and flag carrier, operates international routes to more than 15 countries, according to its website. (RIA Novosti)
For the Record
$111M Leaves Russia-Oriented Funds in Week to Feb. 26
$111 million was taken out of funds investing shares in Russia in the week to Feb. 26, the eleventh consecutive week of capital outflow from the country, according to Emerging Portfolio Fund Research data.