Russian strategic-sector foreign investment law may be adopted in 2006

Other News Materials 14 June 2006 17:26 (UTC +04:00)

(RIA Novosti) - A bill limiting foreign investment into areas of Russia's economy designated as "strategic" will be passed by the end of this year at the earliest, the country's finance minister said Wednesday.

"The law has yet to pass through the government, and in the best-case scenario will appear by the end of this year," Alexei Kudrin said at an international economic forum in St. Petersburg, reports Trend.

He said that the draft law, which he described as "quite liberal," would cover 39 sectors, mainly in the defense industry, accounting for 2% of Russia's GDP.

Deputy Prime Minister and Defense Minister Sergei Ivanov said the planned restrictions on foreign investment were needed because of security concerns. He said the economy would be unable to function properly in an unsafe environment and that there would be no defense industry without a properly operating economy.

"I know of many companies seeking to qualify as strategic to receive [state] protection," he said. "But whether a company is included on the list [or not] will depend on the amount and the types of products it turns out."

Economic Development and Trade Minister German Gref, an advocate of free-market values, was less impressed with the idea. When asked if any of the country's telecommunications companies would be made off-limits to foreign investment, he said:

"The Russian government has forgotten all about telecommunications, thank God, so it's one of our most briskly developing sectors. If the government undertakes to regulate the telecommunications and mobile communications sector, we will have no mobile phones [left]."