as equity for a new venture in Russia (Article 24). Joint ventures with a minimum foreign equity also enjoy special privileges (Article 25); they can export products and import inputs according to their needs and without a special licence. Joint ventures registered before 1 January 1992, continue to enjoy duty-free import of gas, oil and products that they process in Russia. Equity-related imports — e.g. machinery, semimanu-factured goods, as a contribution of these joint ventures to the authorized capital — are exempt from import duties and taxation.
However, protectionist tendencies still remain. Certain communist-led regional governments have joined forces with large local enterprises to demand protection, especially in the automotive, chemical and food industries, thus exerting pressure on the central government for higher duties and stricter certification for foreign companies. But, on the whole, Russia seems to be on the path to full trade liberalization. However, as it prepares to joint the WTO, which promotes free trade and worldwide FDI protection, Russia will need to further liberalize its foreign trade regime.
M. M. Boguslavski, Inostrannyie investitsii [Foreign investment], 1996, pp. 1–12.
Total capital forming investment as opposed to gross capital formation, which does not include repairs and investment in nonmaterial and circulating assets. See Goskomstat, Russia in Figures, 1997, p. 229; Russian Statistical Yearbook, 1997, p. 405.
Federal budget plus budgets of federation subjects (regions) and local authorities.
Housing and construction activities accounted for Rb1225.8 trillion or US$41 billion in 1996 — about 60 per cent of gross capital formation.
According to official statistics, not even US$2 million were invested in agriculture by foreign companies in 1996. See Goskomstat, Statistical Yearbook, 1997, p. 415.
Goskomstat, Statistical Yearbook, p. 530.
OECD, Economic Survey: Russian Federation, 1997, Paris, pp. 113–23.
BfAI, 'Rußland, fast durchwegs Kürzungen bei staatlichen Investitionen' [Russia, cuts almost everywhere in public-sector investment], Info Osteuropa, November 1998, pp. 8–9.
These loans are known as systemic transformation facility or STF.
In 1996, GDP was US$625 billion in PPP or US$440 billion in nominal value.
Annual transfers to former East Germany, whose population is less than 10 per cent that of Russia, have averaged DM120–150 billion or US$70–90 billion per year since unification in 1990.
OECD, Economic Survey: Russian Federation, 1997.
Goskomstat, Russian Statistical Yearbook, 1997, pp. 406–9.
Goskomstat, Russian Statistical Yearbooks, 1997, 1998, 1999.