Investments in Russia grow but still insufficient: minister

The volume of economic investments in Russia has grown but was still insufficient in 2010, Russia's Minister for Economic Development Elvira Nabiullina said on Monday.

Nabiullina made the remarks during a meeting with President Dmitry Medvedev on Monday, the Interfax news agency reported.

For the last year, the volume of investments amounted to 10.8 trillion rubles (about 362 billion U.S. dollars), which is 21 percent of the gross domestic product (GDP).

"During the crisis investments fell 16.1 percent, faster than GDP's fall," the minister said.

She added that in 2010 the pace of investments recovery has been 2.9 percent that exceeded the forecast.

Nabiullina compared these figures with the European Union's, India's and China's data. Compared to the EU, situation in Russia was favorable; but compared with India and China, Russia's growth was insufficient, she said.

The minister also worried about the quality of the investments, as only 9 percent of those being provided by the banking sector.

"The majority of investments comes from the federal budget," she pointed out, adding that the optimal level of banking investments should be about 20 percent.

According to the minister, 38 percent of Russian businesses invest into energy-saving technologies, and investments into machine-building industry and telecommunications rose by priority rates.

However, Nabiullina said, investments into modernization still have been negligible, and investment climate as a whole remained unfavorable.

Medvedev agreed with the minister, saying that improving investment climate "is a task which cannot be solved in half a year" and that "investment climate is changing very little."

Medvedev stressed that favorable investments climate depended on three parts - laws, officials' behavior, a normal judicial system.

[Source: Xinhua, Moscow, 24Jan11]

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