The birth of the State Investment Corporation, headed by Yury Petrov, the President's former chief of staff, was unexpected for the section of the government responsible for the country's investment policy. This is even stranger in that the presidential decree establishing the corporation, published last week, states that it is being set up to attract foreign investment and to stimulate domestic investment.


Since last April the economics minister has been developing a draft for the creation of a state finance corporation, which was supposed to take care of all investment problems. The administration's draft had been signed by everyone including the prime minister, and was supposed to appear very soon. It is difficult to imagine that those who worked on the president's surprise decree on the State Investment Corporation were not aware of the other draft.


Last August the Russian Agency for International Cooperation and Development was created by presidential decree. Its main function was to encourage foreign investment. The new presidential decree seems to take this important and quite attractive function away from the agency and give it to Petrov's corporation.


The corporation will also receive a large share of material resources: property amounting to $1 billion, plus $50 million and 200 billion rubles.


However, these fantastic conditions will be unlikely to turn Russia into an investment paradise. In the first place, serious experts are expressing doubt that it would be possible to find or appropriate property amounting to $1 billion for the corporation's needs, and finding $50 million would be more than slightly problematical.


Secondly, until recently in negotiations with international financial institutions the Russian side maintained that it was creating a mechanism for "one-stop shopping", to allow investors to solve all their problems with one group of government organizations. The rise of yet another structure has already caused a lot of confusion.


In the third place, the parliament will protest against the appearance of a new government supercorporation that would receive a virtual monopoly on foreign and domestic investments.


There will be influential opponents to this idea in the government as well. They will attempt to limit the corporation's powers and possibilities.


As a result of the inevitable conflict the corporation will probably be retained, but will evolve into an ordinary broker of oil and other strategic materials - the decree obliges the government to establish special quotas for this purpose. Perhaps the corporation will become a powerful organizer of a computerized lottery in Russia (the decree gives it this power as well), which is also an extremely lucrative pursuit.