| JRL HOME | SUPPORT | SUBSCRIBE | RESEARCH & ANALYTICAL SUPPLEMENT | |
Old Saint Basil's Cathedral in MoscowJohnson's Russia List title and scenes of Saint Petersburg
Excerpts from the JRL E-Mail Community :: Founded and Edited by David Johnson

#13 - JRL 8384 - JRL Home
CAPITAL FLIGHT THIS YEAR MAY BE AS HIGH AS $10-15 BILLION - ZHUKOV

MOSCOW, September 28 (RIA Novosti) - Capital outflows from Russia this year may reach $10-15 billion, forecasts Deputy Prime Minister Alexander Zhukov.

"The Central Bank may provide a more precise figure, but I think it will be somewhere between 10 and 15 billion dollars," he said, replying to a question put to him by journalists.

Zhukov recalled that early forecasts predicted an inflow of capital for the year, but the trend has reversed, and some outflow is in evidence. The vice-premier said many reasons are behind the phenomenon, including super-high oil prices and reduced yields of various instruments in Russia, compared with other markets.

"In my judgment, what is happening is not catastrophic," believes Zhukov. He also expressed the view that in the next few years Russia will become a net capital importer.

"Over the past five years Russia has traversed a long road - from a meltdown, a default and inability to abide by its obligations to foreign states to a much more stable political situation and steady rates of economic growth," Zhukov said, addressing on Tuesday a conference "Russia: Investments in Economic Growth".

"I think today no one has any doubts that Russia is able to respect its commitments and follow a weighed and consistent economic policy," the vice-premier said.

In particular, he said, the government intends to carry on its "sufficiently tough and well-considered financial policy," to form a federal budget with a surplus, to boost federal reserves, and seek to cut back the sovereign debt.

Furthermore, the vice-premier noted, already the ratio of the Russian state debt to GDP and imports "is substantially better compared with what is demanded by the European Union".

As regards the WTO, Russia may join the World Trade Organization in 2005, Zhukov believes.

"There is a possibility that talks with all countries will be finished in 2005," he said.

Zhukov emphasized that the time factor ofRussia's joining the WTO is essential, but "it is not the main one for us".

"What is important for us is the terms on which Russia will join the WTO, and these terms should be non-discriminatory," he added.