President Medvedev’s 10 steps to improve investment and business opportunities in Russia

At the March 30 meeting of the Commission for Modernization and Technological Development of Russia’s Economy, President Dmitry Medvedev put forth a series of priority action items to help improve investment and business opportunities in Russia. 

President Medvedev stressed that foreign investment, technology and confidence are all needed to achieve modernization and laid out 10 priority actions to improve investment and business opportunities in Russia. 

1.    Social taxes and health care procurement – Medvedev called for a reduction of social taxes, which finance healthcare programs in Russia.  “The [current] 34 percent rate that was set could indeed be too great a burden for many types of business,” Medvedev stated.  “I therefore give the Government until June 1 to draft proposals on possibilities for lowering the compulsory insurance payments as from January 1, 2012.” Additionally, Medvedev called for a reduction in health care procurement costs by 15 percent. 

2.    Tackling corruption – The president instructed the government to develop a system to review complaints and publically provide updates on actions taken to reduce corruption.  Medvedev also said that each agency head will need to accept responsibility if corruption complaints are not reduced. 

3.    Government inconsistencies – The Ministry of Economic Development will now have the power to propose that the Justice Ministry take action to repeal state agency regulations that unjustifiably obstruct business and investment activity.   

4.    Investment ombudsman – Each federal district will have an investment ombudsman, whose role will be to help companies implement investment projects.  These individuals will know the laws of each region and provide counsel to help businesses develop their presence in Russia. The ombudsmen will also help to monitor regional governments. 

5.    Government involvement in private business – As part of his plan to improve investment and business opportunities in Russia, President Medvedev proposed three ways to  reduce state-owned companies from unduly influencing the investment climate:

• Move forward with the country’s privatization efforts, incorporating the leading Russian and foreign investment banks in the structuring of deals;
• Remove government officials from the boards of state-controlled companies, in particular those who are responsible for the laws of that industry; and
• Establish a procedure to make information about government procurements public, as well as decrease the costs for materials from state-controlled companies by at least 10 percent annually during the next 10 years. 

6.    Minority shareholders – Minority shareholders must have access to information about the activities of their companies so they may compare performance with other global companies.

7.    Russian-backed private equity fund – The president noted that the previously announced private equity fund aimed at helping finance foreign investment projects should be set up by mid-summer. 

8.    Foreign direct investment in strategic sectors – The president called for the government to decrease the powers of the commission for monitoring transactions of foreign companies in strategic sectors. 

9.    Investment community services improvements – A variety of improvements must be made to the common services used by members of the investment community, including airports, registration procedures, visas, work permits, the postal service and regulatory bodies looking over fire-protection, technology control and health and disease control.  Medvedev called for the appointment of special supervisors to review each sector for six months and provide recommendations for improvement. 

10.    Regional liaison – President Medvedev will establish a regional liaison to review complaints of action or inaction by regional authorities, and act accordingly. 


Which of these initiatives do you think will most help investment and business opportunities in Russia?  Which would you like to see implemented first?