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Putin calms foreign investors down

October 18, 2011, 12:45 UTC+3
Putin told the foreign investors what their countries should do for avoiding a possible collapse and why they find it difficult to do that
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MOSCOW, October 18 (Itar-Tass) — Speaking at a meeting of the Consultative Council for Foreign Investments on Monday, Vladimir Putin assured the business people that after the elections all the present economic priorities would remain unchanged. Aside from it, he told them why there would no protest actions against the economic policy of the state in Russia.

The Prime Minister said that Russia was prepared for another global crisis better than at any other time, and his words made it clear that this country, the ruling party and the government are anxious to overcome the crisis, The Kommersant writes. He spoke about the growth of the gross domestic product by 4 per cent by the end of the year, about the growth of the industrial output by 5.4 per cent, about the reduction of the inflation rate and about the deficit-free budget in 2011. Putin told the foreign investors what their countries should do for avoiding a possible collapse and why they find it difficult to do that. The thing is that the Russian economy took upon itself major social expenditures.

The Western investors were calmed down by Putin’s words that Russia is not going to change its economic priorities after the parliamentary and presidential elections, The Novye Izvestia writes. “We realise perfectly well the importance of stability and predictability in this respect,” Putin said. He devoted special attention to the fulfilment of the social commitments assumed by the authorities. In his opinion, disregard for problems of the social policy is fraught with the danger of massive protest actions, like those which are taking place in a number of industrially developed countries.

The nomination of Putin to the post of president was publicly supported by major foreign investors, The Vedomosti writes. According to the newspaper, James Turley, Chairman of the Board of Directors of Ernst and Young Global, co-chairman of the Consultative Council on Foreign Investments, said openly that they supported Putin’s candidature to the post of president, but added that members of the Council would miss Putin’s chairmanship in the Council as prime minister.

Many members of the Council were taken by surprise by this “collective vow of loyalty,” The Vedomosti continues. One of the participants in the meeting said on condition of anonymity that they had been surprised by Turley’s words about support for Putin’s nomination.

“Reasons for that statement could be different, but it would be an overstatement to say that most foreign investors really support Putin,” the newspaper writes, quoting the words of Yulia Tseplyaeva, chief economist of BNP Paribas. According to The Vedomosti, investors vote against Putin with the help of dollars: outflow of capital from the financial markets is going on, while oil prices are high, which is not typical of Russia.

On the other hand, foreign investors highly appreciate the ability of the Russian leaders to make decisions, against the background of paralysis of power in other countries, including European ones. Pragmatic considerations turn out to be the most important, in the long run. The profitability rate per unit of product that the investors get in Russia is higher than in other countries. “Barriers do exist, no doubt, but dividends are paid here according to the schedule, and they are high,” The Vedomosti writes, quoting the words of a staff member of a foreign energy company.

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