German Gref urges businessmen to attack the government, while Vladimir Potanin declares a currency revolution.
The Russian Union of Businessmen and Industrialists has finally actively started defending the rights of Russian business. The union held a conference on currency regulation today. RF Minister of Economic Development and Trade German Gref spoke at the conference; in fact, he called upon officials of the Union of Businessmen and Industrialists to be more active defending their rights.
From the beginning, German Gref admitted that tax, non-tax, and administrative costs of Russian business currently make up 50% of the Gross Domestic Product. In his words, 40% of the GDP are tax and non-tax costs of the Russian business exempted by the government, 10% of the GDP are the spending on the overcoming of administrative barriers. The chief liberal of the Russian government stated that ,although the government has carried out a tax reforms, the tax burden and costs of the Russian business are still extremely high in Russia. His opinion is that the currency and customs regulations fixed in Russian legislation are in fact lagging behind the pace of development of the Russian bank system and Russian business on the whole. “Moreover, in most cases, the measures of state currency regulation are not observed by Russian business, and they often don’t work at all.”
The governmental legislation on currency regulation is also abundant in faults and errors, German Gref says. However, there is still a chance to amend and improve it before submitting to the State Duma. The minister urged Russian businessmen to demonstrate more actively their position concerning the problem to the authorities. He thinks that it’s time to give up the practice of state measures of currency regulation being carried out at the expense of the RF economic subjects. German Gref says that a maximum liberalization of the currency regulation regime would allow Russian businesses to reduce their costs.
The position of the Russian business community was substantially expressed by the president of the Interros holding, member of the Union of Businessmen and Industrialists Board, Vladimir Potanin. To his regret, Vladimir Potanin had to admit that Russian legislation on currency regulation, a really pressing problem for the Russian economy, is lags behind the reality.
In fact, Vladimir Potanin formulated the key postulates of a currency revolution in Russia. In his words, the RF Ministry of Finance and the Bank of Russia must certainly retain several governing functions in the sphere of currency regulation. On the other hand, it’s time to radically reconsider the attitude of the state towards Russian business in the sphere of currency regulation. It’s high time to turn operations of a capital nature into informative operations only, and not impose far-fetched restrictions upon them. In addition, the Central Bank’s viewpoint on the obligatory sale of currency proceeds must be abolished once and for all.
Certainly, the legislation on currency regulation developed by the government currently takes into account the interests of Russian business and provides some certain balance of the interests of the state and the businessmen, Potanin says. When the legislation is adopted, the life of large-scale business in Russia will become easier. However, remaining administrative barriers will be all the same a hard barrier for the small- and medium-scale business in Russia. In this connection, Potanin says that the government should pay its closest attention to the problem.
Akhtyam Akhtyrov PRAVDA.Ru
Photo: RF Minister for Economic Development and Trade, German Gref
Translated by Maria Gousseva
Read the original in Russian: http://economics.pravda.ru/economics/2002/7/21/63/3600_PotaninRSPP.html