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. Last Updated: 07/27/2016

Soros Says Local Net A Great Investment

International financier George Soros on Thursday said the local Internet was a hot investment, and he would consider again investing in the country where he made the worst bet of his career.

Soros said at a news conference he saw great potential in the local Internet, which is still embryonic but growing quickly.

He has long had a stake in Golden Telecom, which has become the largest national Internet Service Provider, or ISP, and his chief local investment is in a telecommunications holding company, Svyazinvest, itself an Internet player.

Soros said he had a "realistic chance" of recovering his $1 billion investment in Svyazinvest, which he has called the worst investment in his career.

"The plan is to form seven regional telephone companies, and in this way convert Svyazinvest from a holding company into an operating company."

Soros' group now leads a consortium that paid $1.9 billion for a 25 percent stake in Svyazinvest in 1997, when the government made its first offering of a block of shares in the national telecoms firm that owns controlling stakes in almost every regional telecoms company.

Only a million or two citizens regularly use and pay for the Internet, but use should skyrocket as the economy picks up and businesses embrace it as a tool to boost efficiency and deal with geographic obstacles.

In the evening, Soros met with Prime Minister Mikhail Kasyanov, Interfax reported. They discussed new investment projects and Soros' business and charitable work in the country, the agency quoted Tatyana Razbash, Kasyanov's spokeswoman, as saying.

Soros said at the news conference that he saw very favorable prospects for investors in Russia.

"The economy is doing very well, there is genuine growth. There is a shortage of capital because of the collapse of the banking system. There are opportunities for those who are strong-hearted.

"Russia is lagging behind the world, and therefore I think the opportunity in Russia is very great, unless the considerations of national security interferes with that development."

While supporting the idea of strengthening the state, Soros voiced concerns on tendencies to suppress freedom of information, both in the media and in Internet, and about excessive centralization of government.

"We are learning that a weak state can also be a threat to liberty," Soros said. "Whether you have 89 regions or seven super-regions is a question of administrative opinion, but to evade the danger of authoritarian rule, you should strengthen local government and self-rule."

Soros is dedicated to the concept of open society and has spent $750 million in charity here over 13 years on cultural, educational and regional infrastructure projects. Contrary to previous statements that his charitable activity in Russia would be closed, he said Thursday that it will continue, though with less funding than before.