Russian minister without portfolio Yevgeny Yasin has given his seal of approval to foreign investment, calling it crucial for the recovery of the Russian economy. Interviewed in Izvestia, Yasin noted that domestic financing of investment continued to decline in 1997, while foreign direct investment rose sharply from its 1996 level to some $3.5-$4 billion. He said the government is expecting some growth of total investment in 1998 but not an investment boom.
Yasin listed the major investment projects either already underway or close to starting. They are all in the energy sector and include: the Yamal-Europe gas pipeline; the Sakhalin 1 and Sakhalin 2 oil and gas developments; and major new oil and gas developments soon to get underway in three fields, including Prirazlomnoe in the Barents Sea. In all these projects, Yasin pointed out, Western firms either are already involved or are competing to take part. He contrasted this with investment projects financed domestically, which remain chiefly in agribusiness, trade, and telecommunications. Russian banks and companies, he maintained, lack the funds to play a leading role in really big projects. Yasin also stressed that the role of government in financing or guaranteeing the financing of investment projects would continue to play only a minor role. (Izvestia, January 16)
Yasin’s encouraging remarks reflect the growing realization in Russia that keeping major Western companies out of the energy sector is self-defeating. The Duma’s reluctance to approve production-sharing agreements remains a substantial obstacle, however.
Russia Defends its Financial Reputation.