| Ukraine becomes a Russian offshore The data on investments into and from Russia published recently by Rosstat did not bring any sensations. As before, the main flow of investment abroad is associated with the export of capital, and the main “foreign” investors are the Russians themselves. True, the directions of cash flows from Russia are slightly adjusted.
Both flows decreased compared to the same period last year. $13.8 billion was invested abroad from Russia, which is 10% less than in the first half of last year. At first glance, this is clear evidence that capital outflows are declining. But the flow of money into the country decreased even more, by 13.1%. Over six months, $16.5 billion entered the Russian economy. However, Evgeny Gavrilenkov, chief economist of the Troika Dialog investment company, warned in a conversation with a Vremya Novostei correspondent that these data are very preliminary, and it is too early to draw hard conclusions. By the end of the year the situation may change dramatically.
But when it comes to numbers, the trends are already obvious. The top three attracting Russian money leaves no doubt as to what kind of investment we are talking about. The largest recipients were: the Netherlands - $618 million (9.4% of the total), Cyprus - $527 million (8%), the Bahamas - $504 million (7.6%). But fourth place with an indicator of $480 million (7.3%) is occupied by Ukraine. The appearance of a neighboring state on this list is more alarming than encouraging. Investments in a neighboring state are beginning to seem to Russian businessmen a safer investment of capital than in their own country. However, these numbers are clearly not final. I wonder how much money the Ukrainian economy receives from Cypriot and Bahamian investors?
No less indicative is the chart of the main Russian investors - Cyprus, Luxembourg and the Netherlands. Despite some large transactions, ours also predominate among the “foreigners”. However, as shown, for example, by the failed deal between the German concern Siemens and Power Machines, a foreign investor does not always manage to get his way to tasty Russian assets.
The largest share in accumulated foreign capital accounted for the so-called other investments made on a repayable basis (loans from international financial organizations, trade loans, etc.) - 52.1% (at the end of June 2004 - 57.2%) , the share of direct investment amounted to 46.1% (for the same period in 2004 - 40.7%), portfolio investment - 1.8% (2.1%).
Finance Minister Alexei Kudrin noted the other day that for the first time, the volume of external debt of Russian private companies exceeded the volume of external public debt. According to Mr. Gavrilenkov, this may be due to borrowing for the purchase of Yuganskneftegaz. However, China is not on the list of largest foreign investors. But it was from him that Rosneft actually took $6 billion to purchase the main production asset of YUKOS. Consequently, this money completely passed the attention of Rosstat. Nevertheless, the trend is clear. Loans on the foreign market are cheaper and more attractive than on the domestic market. This indicates the weakness of the Russian banking system. According to Mr. Gavrilenkov, there is no danger that the nominal volume of debt is growing, since as a percentage of GDP it is still falling. But there is a danger in the quasi-public sector borrowing hobby. “Gazprom’s debts are growing faster than production volumes, and under certain conditions this can pose a danger,” the expert believes. Vera SITNINA |
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