Prime Minister Vladimir Putin courted foreign investors Monday, promising to lower administrative barriers to investment and to allow foreigners to take part in the wave of privatizations planned for next year.
Speaking at the annual Foreign Investment Advisory Council, Putin said he agreed with those who said the hurdles that investors have to jump through are too high.
“The critical remarks are absolutely valid,” Putin said in comments posted on the government web site. “The excessive bureaucracy … is the hard legacy of a planned economy, when all decisions were made on an administrative level.”
Putin said a plan was already underway to simplify the administrative barriers to foreign investment. The prime minister said he had already given an order that the time required for granting permission should be lowered and that the list of activities not requiring government approval should be widened.
Economic Development Minister Elvira Nabiullina, also at the meeting, told the investors that foreigners would be allowed to bid on state assets in a coming wave of privatizations.
“I’d like to emphasize that our procedures are open to participation by foreign investors,” Nabiullina said, adding that there would be special procedures for investment in strategic sectors.
The government is hoping to sell off as many as 5,500 state enterprises, including stakes in Sovcomflot and Rosgosstrakh, as early as next year. The government currently controls more than 50 percent of the Russian economy and the state is looking to lower its stake as well as raise some much-needed cash as budget deficits are projected for the next few years.
James Turley, council member and CEO of Ernst & Young, made the keynote address to the council. While he praised the government’s anti-crisis measures, he slammed what he said were the two main obstacles to foreign investment in the country: red tape and poor infrastructure.
It takes a company a year to get permission to build a factory in Russia, Turley said, but in the same amount of time in can build and launch two factories in other countries.
Turley said foreign investors’ attitude toward Russia is changing for the positive, citing a survey showing that only one in 50 foreign firms are reconsidering their plans for investing in Russia.
The Foreign Investment Advisory Council was established in 1994 to promote closer cooperation between the Russian government and foreign investors. It is chaired by the prime minister, and participants include multinational companies operating in Russia as well the World Bank and the European Bank for Reconstruction and Development.
“It’s important that special relations appear between your company and Rosatom,” Putin said during a meeting with Siemens chief executive Peter Loescher.
Putin first said in January that Siemens and Rosatom, both major players on world nuclear markets, had pledged to look at closer cooperation.