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. Last Updated: 07/27/2016

Decrees Draw Debt, Credit Plan

President Boris Yeltsin signed a package of economic decrees Monday aimed at stimulating private investment in industry, settling Russia's huge inter-enterprise debt and helping enterprises finance purchases of new equipment.


Interfax reported that the first of the three decrees introduces a long-awaited competitive system of allocating government credits, under which the state would pay up to 20 percent toward the cost of private investment projects deemed worthy by the Economics Ministry. Under the law, Russia's commercial banks would select viable long-term projects for the government. Private companies would have to come up with 80 percent of funding on their own.


Although the decree represents a shift in the country's traditional credit policy, Western economists have criticized it as a half-measure that is unlikely to have an impact on investment in Russia, where high taxes and ever-changing legislation are the main barriers.


A second decree halves the court fee that enterprises must pay when they file suit against their debtors -- from 10 percent of the sum in question to 5 percent -- Interfax reported.


Inefficient and costly procedures have discouraged many creditors from turning to the courts to settle commercial disputes. At last count, Russian companies owed more than 100 trillion rubles ($43 billion) to each other, the government and commercial banks.


The third decree lays a legal foundation for commercial leasing and is designed to make it easier for small and medium businesses, such as small farmers, to finance purchases of new equipment, Interfax reported.


Officials in President Yeltsin's press service confirmed that the decrees had been signed, but gave no further details.


Interfax also said the president, on holiday in the Black Sea resort of Sochi, signed a fourth decree dealing with privatization of the country's gas monopoly, Gazprom. The information could not immediately be confirmed.