RUSSIAN DEPUTY PREMIER LISTS STEPS TO HELP REAL ECONOMY DURING CRISIS
Interfax
Moscow, 17 October: The Russian government has proposed implementing a series of measures to mitigate the negative consequences of the financial crisis on the real economy, Deputy Prime Minister Sergey Ivanov has said, addressing a forum of Russian big business in Moscow on Friday [17 October].
First, he said, it is proposed that enterprises which produce high-tech competitive products and also take part in performing the state defence order be given the opportunity to obtain targeted loans to cover their shortage of working capital - at economically justifiable interest rates and with the banks' fixed margin taken into account. Loans like these, Ivanov said, should be secured by contracts that have already been signed without any collateral. "In my view, economically justifiable interest rates are rates of 8-9 per cent, and the bank fixed margin is 1-2 per cent," Ivanov said.
Second, he continued, the government proposes linking state support for commercial banks with their obligation to adhere to earlier concluded loan agreements with enterprises.
Third, it is planned that budget funds be earmarked to render financial assistance to the most significant entities of the high-tech sectors of the economy whereby the state would buy their shares. "This is not nationalization. This is possible only if both sides agree," Ivanov said.
Fourth, he said, the government intends to expand the practice of providing state guarantees to banks granting loans to the high-tech sectors of the economy to secure the production activities of enterprises belonging to these sectors.
Fifth, it is planned that proposals be drafted for state customers' advance payment (of up to 100 per cent, depending on the priority of projects and work) for work under federal targeted programmes and the state defence order. Ivanov said that if funds allocated for federal targeted programmes and the state defence order are put together, they would amount to "tens of trillions of roubles".
Sixth, according to Ivanov, proposals will be drafted to allocate funds to the State Reserve for long-term and advance procurement of material resources for their further use by real sector entities that produce supplies for state needs.
Seventh, it is proposed that necessary arrangements be made to provide state defence order contractors with tax deferments and tax instalments, as envisaged in Chapter 9 of the Tax Code, and to extend the term of these measures to five years. He said that this may concern tens of thousands of companies.
[Ekho Moskvy radio station, Moscow, in Russian, 0800 gmt 17 Oct 08, quoted Ivanov as saying that state support did not mean a return of socialism to the economy. There is no such danger, Ivanov said.]