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  Monday, September 16, 2019
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Russia's economy needs a 25% increase in investment to develop faster
Russia's economy needs a 25% increase in investment to develop faster, the World Bank country director for Russia said Tuesday. "Russia is experiencing an investment shortage, Kristalina Georgiyeva said. "Twenty-five percent is the minimum level required for the accelerated development of the Russian economy." Georgiyeva said the growth of investment in Russia was currently at the level of 18%. The WB country director said the Stabilization Fund, which was set up in 2004 to accrue windfall profits from high energy prices, and the fund of future generations should not be used for domestic purposes. A senior government official said Monday the government had already decided to divide the Stabilization Fund into two parts: funds for future generations, or an untouchable government reserve, and funds to be invested in more profitable but risky operations. "The Stabilization Fund and the fund of future generations can be used for domestic purposes only, when there is a budget deficit," Georgiyeva said. A World Bank survey has indicated that an unfavorable tax environment, the lack of qualified workforce, the high cost of loans and insufficient macroeconomic stability are among the main constraints encountered by Russian business. Corruption, workforce quality, limited competition, the cost of loans and the judicial system were the main factors that affected businesses in 2002-2005. Georgiyeva said the participation of Russian companies in various business organizations helped their dialogue with the government and increased trust between business and authorities. Georgiyeva also said only 28% of Russian enterprises could compete globally, whereas 43% of enterprises were far behind overseas counterparts and still relied on resources accrued in the Soviet era.
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