The government on Tuesday outlined a plan to lure foreign money for a faster economic recovery by stamping out the hurdles — such as obtaining endless business permits — that investors have stumbled over.
Voiced by an Economic Development Ministry official in charge of investment, the proposals focus on improving the customs services, cutting red tape, taming taxmen, reducing corruption and opening wide the doors for skilled foreign executives.
The efforts to make Russia a foreign capital magnet stem from Prime Minister Vladimir Putin's frequent mantras that the government must compete for investors with the other developing countries after the global economic debacle wiped out much of the money supply.
Looking back, the Economic Development Ministry figured that speculative capital dominated pre-crisis foreign investment because the risks of doing business in Russia outside of its stock exchanges were too high, said Sergei Belyakov, director of the ministry's investment policy department.
"Something has to be done about this," he said at an investor conference organized by the Association of European Businesses in Russia, a lobby group that brings together companies like Siemens and IKEA. "You can and must come to us with the problems you encounter."
One of the measures that the government planned to encourage foreign investment, the introduction of simpler visa rules for high-paid white-collar staff from outside Russia, has already materialized in a law due to take effect July 1.
Belyakov did not say what other specific changes were in the pipeline, just naming the broad areas where federal officials would look to clean up their act.
Some international corporations have ridiculed the requirement for numerous construction permits.
Japanese truck maker Komatsu, which is planning to complete a $100 million assembly plant near Yaroslavl later this year, told a conference last year that the amount of paperwork was so overwhelming that employees there decided to measure the combined length of the correspondence they had sent and received to get the approval from officials, Oleg Babinov, director of consultancy Risk Advisory Group, said Tuesday.
The chokehold on business that even an inconspicuous bureaucrat can apply should never be underestimated, he said.
"A low-level customs official at Sheremetyevo can bring all operations of a large multinational company to a halt," Babinov said, referring to Moscow's biggest airport.
Some investors remained unconvinced that the government would achieve a lasting improvement of the investment climate. Vladislav Ignatenko, a Moscow executive of the French pharmaceutical company Servier, said he had witnessed how previous attempts to rectify the situation all came to nothing.
"The problems will come back in a different shape," he said on the sidelines of the conference.
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