Foreigners Eager to Invest in Fuel, Power Sector of Economy
Russia goes through the turning point in investments, Alexander Shokhin, president of Industrialists and Entrepreneurs Union, said not long ago. The essence of the change is that the foreign capital not only flows into the country, it also stays here.
Shokhin apparently had reasons to make this conclusion. The Central Bank of Russia (CBR) said the net capital inflow soared to $13.9 billion in the third quarter vs. $9.1 billion a year ago. Besides, the ratio of money withdrawn by foreigners to incoming investments lowered to 3 percent in the second quarter. It is the record, actually. The indicator hadn’t sunk below 17 percent in the recent time, according to Transition Economy Institute.
All good fundamentals notwithstanding, the government is not very pleased with investment structure. Aliens generally favor mining/crude production operations; the share grew from 17.4 percent in the H1’05 to 28.4 percent in H1’06, according to Government’s Center of Economic State of the Market. At the same time, investments in the manufacturing branches shed from 30.1 percent to 22.6 percent. Two thirds of all foreign money invested in the industry went to the fuel and power sector, metallurgy, chemical and petrochemical branches.
The foreigners are lured into the branches of raw materials because of their efficiency. For similar reasons, the government is willing to tighten control over the sector. But there is some hope for the compromise. As much as 57 of foreign businessmen polled by FIAC expect the government in Russia to continue stepping up the control only in power engineering, saying the other branches will be free to welcome the foreign money.
www.kommersant.com
All the Article in Russian as of Oct. 06, 2006
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