Actuality October, 30, 2007

The growth of GDP for nine months of 2007 made 7,4% against 6,3% during the same period of 2006. Such numbers announced Elvira Nabiullina, the head of the Ministry of Economic Development. According to her, over the last years the Russian economy has overheated – annual economic growth makes 6-7% that considerably outstrips the dynamics of world economy. And if to recount GDP according to the rate of dollar exchange, GDP already made $985 billions in 2006 as compared to $260 billions in 2000. This year, Nabiullina is sure, Russia will cross the limit of one trillion 200 billions dollars by GDP volume.

Interestingly, it is marked in the Ministry, that the GDP volume has exceeded the level of 1991, and it is already quite another GDP by structure, created in the market economy. And if in 2003 GDP made about $3 000 per capita at the current rate, in 2006 it was already $7 000 and about $12 000 at parity of buying power.

From the report of the head of the Ministry of Economic Development it follows also, that not only GDP has pleased with the progress, but the stock market demonstrates impressive results. So, capitalization of the Russian market of shares from 2000 to 2006 increased more than 12 times, having evened in 2006 with the annual volume of GDP.

This index grew more than 3 times for one and a half year. Russia occupies the 18th place in the world on capitalization of the stock market and the 8th place in Europe. Considerably grow the IPO volumes of the Russian companies, the growth is 2,5 times more as compared to the first half of 2006.

Investments

So, apparently, everything is good in Russia. Therefore successes, under the document, noticed all, especially foreign investors. For the first half of 2007 the clear flow of foreign investments into Russia made more than $60 billions. It is 2,5 times more than in the first half of the last year. Substantially – almost 1,5 times more – grew the flow of direct foreign investments, having made about $25 billions for the first half of this year.

“It is especially pleasant, that the Russian-American trade and economic relationships become better and better year after year”, marked the head of the Ministry of Economic Development, Elvira Nabiullina. So, in 2006 the volume of commodity turnover between Russia and the USA, according to the data of Russian statistics, has increased by 41% as compared to 2005 and made $15,3 billions. Today the USA occupies the 8th place among the trade partners of Russia by the volume of commodity turnover; about 3% of all commodity turnover of Russia falls on its stake. Moreover, the USA is among the leading countries-investors by the volume of attracted foreign investments in the economy of Russia. According to the results of 2006 the USA was on the 6th place by the volume of the cumulative foreign investments in Russia. Thus, unlike other most countries, in the structure of incoming investments from the USA prevail direct investments (about 60%).

From these indices of the Ministry of Economic Development is clear that there exists an enormous potential for extension of bilateral cooperation between Russia and the USA. But nevertheless the Ministry is disturbed, that investment potential of the Russian market is used by the American companies far not to the full extent. One of the deterrent, in opinion of the Ministry of Economic Development, is the absence of bilateral agreement about defense and encouragement of capital investments. The USA is the one of large economies, with which Russia doesn’t have such an agreement.

To the end of the year the government will consider the Conception of long-term socio-economic development of Russian Federation to 2020. In December at the government session will be considered a summary report about results and basic directions of governmental activity for 2008-2010.

As before, from the data of the Ministry of Economic Development, the government preserves an absolute orientation towards market transformations. As it is marked in the Ministry, there cetainly won’t be such major reforms, that were carried out in the 1990th and at the beginning of 2000th. The most significant problems, requiring serious institutional transformations, in opinion of the Ministry, will be concentrated foremost in the sphere of efficiency of state administration and regulation, and also in the sphere of social policy.

Creation of clear and transparent mechanisms of the government and business cooperation, effective mechanisms of the government provision of services, transparent mechanism of government procurement, distinct administrative regulations are all major institutes, determining ultimately favourable environment for business activity. Also important is transparent and clear mechanism of investing of private capital, including foreign one, into the strategic sectors of the Russian economy.