Investment in Russia Drops 40%
July 5, 1999 - 0:0
MOSCOW Foreign investment in Russia slumped 40 percent in the first quarter of this year compared with 1998, the economics minister said Saturday, promising reforms to woo back investors unnerved by Russia's financial troubles. Total foreign investment in Russia was $1.5 billion in January-March, Economics Minister Andrei Shapovalyants told a Moscow forum of foreign investors, Russian news reports said. Direct investment was $600 million, or 80 percent of the figure for the first quarter 1998. He did not give a figure for investment in securities, which apparently accounted for most of the drop in overall investment, which was 40 percent lower than last year.
Many foreign investors in Russia - particularly those in the financial markets - fled after the country succumbed to global economic turmoil last August. The government defaulted on some debt and devalued the ruble- many banks then crumbled and inflation spiked. The government has stabilized things since then, but has made little headway in reviving the economy. While Russian stock markets have rebounded in recent weeks, many investors are still wary of economic and political uncertainty.
Shapovalyants said Russia was drawing up stricter accounting standards and urged more transparency of Russian companies for foreign investors, the Itar-Tass and Interfax news agencies reported. Deepening economic troubles have made many Russians bitter about foreign investment, particularly by Americans. A poll released Friday indicated that nearly half of Russians don't want U.S. investments in their home regions, apparently because their resentment of U.S. influence outweighs any suffering from poverty.
But Russian officials are keen to court foreign investors and creditors, from whom Russia desperately wants new loans. Prime Minister Sergei Stepashin said Saturday he was confident the International Monetary Fund would soon release a $4.5 billion loan to Russia. It would be the first IMF injection since Russia's crisis hit last August. An IMF team that visited Moscow this week praised Russia's economic performance and indicated that lending could be resumed, allowing Russia to pay off debts due this year and avoid a potentially disastrous default.
Stepashin said the IMF loan would be the first step toward economic recovery. ``The rest depends on us, on how we will watch economic indicators, how we will help the real sector and protect the national producer,'' he said, according to Itar-Tass. (AP)
Many foreign investors in Russia - particularly those in the financial markets - fled after the country succumbed to global economic turmoil last August. The government defaulted on some debt and devalued the ruble- many banks then crumbled and inflation spiked. The government has stabilized things since then, but has made little headway in reviving the economy. While Russian stock markets have rebounded in recent weeks, many investors are still wary of economic and political uncertainty.
Shapovalyants said Russia was drawing up stricter accounting standards and urged more transparency of Russian companies for foreign investors, the Itar-Tass and Interfax news agencies reported. Deepening economic troubles have made many Russians bitter about foreign investment, particularly by Americans. A poll released Friday indicated that nearly half of Russians don't want U.S. investments in their home regions, apparently because their resentment of U.S. influence outweighs any suffering from poverty.
But Russian officials are keen to court foreign investors and creditors, from whom Russia desperately wants new loans. Prime Minister Sergei Stepashin said Saturday he was confident the International Monetary Fund would soon release a $4.5 billion loan to Russia. It would be the first IMF injection since Russia's crisis hit last August. An IMF team that visited Moscow this week praised Russia's economic performance and indicated that lending could be resumed, allowing Russia to pay off debts due this year and avoid a potentially disastrous default.
Stepashin said the IMF loan would be the first step toward economic recovery. ``The rest depends on us, on how we will watch economic indicators, how we will help the real sector and protect the national producer,'' he said, according to Itar-Tass. (AP)