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. Last Updated: 07/27/2016

Rosy Outlook Prevails for Foreign Investment

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Prime Minister Viktor Zubkov delivered an upbeat speech Monday to the Federal Investment Advisory Council, a body that brings together state officials and international CEOs. Russia's total accumulated foreign investment has reached $178.5 billion as of July 1 of this year, $80.6 billion of which was direct investment. In comparison, the level of foreign investment for the first six months of 2007 was $60.3 billion -- almost three times more than the first six months of 2006.

The success of Russia's stock market is also a nice supplement to the positive statistics that the prime minister quoted. The RTS has grown for the fifth week in a row (since Sept. 12, the market has grown by 14.58 percent). President Vladimir Putin's decision to head United Russia's federal ticket and his hint that he could stay in power as the prime minister were positive factors in the market's growth, according to market analysts. But in reality, Putin's latest actions had a minimal impact on the economy; external market conditions were more important factors.

Zubkov, who chairs the investment council, left the impression that there are no problems for foreign investors in Russia that cannot be solved. And investors agree with this assessment. The official report of the investment conference mentioned a whole series of concrete technical amendments to the Tax Code that will help improve conditions for investment. Investors have also appealed for the rapid passing of an investment law for the so-called strategic sectors; this initiative has already been discussed in State Duma hearings.

The level of legislative limitations and barriers to investment in Russia is formidable, but it is worse in India and China, according to the survey, "World Investment Prospects -- 2007," conducted by the Organization for Economic Cooperation and Development.

The United Nations Conference on Trade and Development published the results of a survey of executives of the world's largest 192 corporations titled "World Investment Prospect Survey 2007-2009," according to which Russia is the fourth most attractive country for direct investment. This places Russia above China, India and even the United States.

According to the survey, investors pay the most attention to the size of the market (21 percent of the investors surveyed), rate of growth (20 percent), access to other markets (10 percent), stability of the investment climate (10 percent) and the availability of qualified human resources (9 percent). The effectiveness of the government and its measures to stimulate investment were important to only 5 percent of those surveyed.

This comment appeared as an editorial in Vedomosti.