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Medvedev names 10 investment steps to rid of key business threats in Russia

31. March 2011. | 07:31

Source: Itar-Tass

President Dmitry Medvedev named ten investment steps that should eliminate the main threats for business in Russia.

President Dmitry Medvedev named ten investment steps that should eliminate the main threats for business in Russia.

These measures should put an end to three main “nightmares” for business: the growing tax burden, corruption, and administrative barriers.

First, Medvedev instructed the government to draft proposals by June 1 on how to reduce the mandatory insurance premiums from January 1, 2012 from the current rate of 34 percent.

“The burden of costs for higher pensions and healthcare is not the best solution, but there are no ideal solutions,” Medvedev said.

He believes that “the premium rate of 34 percent may be exorbitantly high”.

According to the president, a new rate should be “within the range close to the previous ones”.

The president instructed the Prosecutor General to introduce from May of this year a special mechanism for considering complaints against activities or inaction of governmental authorities, which contain corruption charges.

Third, the head of state said the Ministry of Economic Development would be empowered to advise the Justice Ministry to cancel acts that complicate entrepreneurial and investment activities.

“The Ministry of Economic Development will be given the power to advise the Justice Ministry to abrogate acts that complicate entrepreneurial and investment activities,” Medvedev said.

Medvedev also announced the creation of a special position of investment commissioner who will assist companies in implementing private investment projects.

Fifth, the president ordered that measures be taken to eliminate excessive influence of state-owned companies on the investment climate, announce a schedule of privatisation for the next there years, stop the practice of appointing ministers to the boards of directors of companies, and publish information on planned public purchases and signed contracts.

Medvedev told vice-prime ministers and ministers not to bear a grudge when they are removed from the boards of directors of companies in the near future.

Medvedev recalled his own experience of sitting on Gazprom‘s board of directors for a long time when he worked in the government.

In his opinion, “this made sense at some point when it was necessary to bring companies together”, but now “this may produce the opposite effect”.

“The government is trying to be a better entrepreneur than businessmen, but this will never be so,” the president said.

He told members of the government “not to be offended” when they are removed from the boards of directors and said that they had much other work to do.

Minister of Economic Development Elvira Nabiullina said the boards of directors should hold their meetings by July 1, 2011. “We will do our best to replace governmental representatives in them,” she said.

The sixth step concerns minority shareholders of public companies that should get access to full information about their operations.

Medvedev also called for creating a fund for direct investments using Vnesheconombank’s assets. The initial capital of the fund will be two billion U.S. dollars and will be increased in the future to ten billion U.S. dollars.

Medvedev said the fund should be created in Russia by the middle of summer.

The future fund will have to “attract foreign investments at least five times its own size”, he said.

He stressed that the fund would have to “attract foreign investments” and the government “should not run the fund and should guarantee its withdrawal from its capital in seven to eight years”.

The president said the best international specialists would be invited to run the fund.

Medvedev recalled that Vnesheconombank would establish the fund with the initial capital of two billion U.S. dollars. He said, though, that the capital would have to be increased “and gradually brought to a guaranteed amount of ten billion U.S. dollars”.

The president also stressed the need to reduce the powers of the government commission for overseeing foreign investments in strategic sectors. “This concerns transactions between organisations that are already under actual control of Russian citizens or companies, and transactions that involve international financial organisations,” the president said.

Medvedev ordered the government and his administration to appoint officials at the level of vice-prime ministers who will check out the work of supervisory and audit bodies.

Finally, Medvedev’s mobile public reception office will start operating in Russian regions in May.

“The mobile reception office of the president of the Russian Federation will start working in regions in May. Officials should be appointed in the presidential administration and sent to all regions. They will accept complaints against the authorities’ actions or inaction and will have to respond to them promptly,” Medvedev said.

The president expects that “the independence of the commission employees from the local authorities will ensure objective consideration of complaints”.


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