Page 9 - RusRPTNov19

2.0 Politics
2.1 Deputy PM Kozak proposes Russia adopt the most liberal
investment protect laws in the world
Competition between deputy Prime Minister Dmitry Kozak and the Ministry of Finance over measures to protect and encourage investment in Russia continued , when Kozak presented a radical alternative to MinFin’s draft law on the matter, BMB reports.
The Ministry of Finance has been preparing a bill on promoting investment since August 2018. After much debate within the government, including Kremlin aide Andrei Belousov’s proposal for a windfall tax on metallurgical companies and Kozak’s public criticism of the bill in August, the ministry seemed to land on a final, comprise version. Yet at the end of September, it still had not been approved within the government.
On Friday, Kozak presented to the Russian Union of Industrialists and Entrepreneurs a working version of his own project. It is even more radical than MinFin’s latest draft law, which had incorporated some of Kozak's suggestions.
The main idea of Kozak’s proposal is that any regulatory change in the public sector—including taxes, tariffs, the construction timelines of infrastructure projects, state support to competitors, etc.—can be seen as causing damages to investors. If recognized as such in court, the federal budget must recoup the investor’s losses.
In contrast to MinFin’s proposal, Kozak’s project protects all investors, not just those who have concluded an agreement with the government.
A large caveat here is that in order for the law to liberally benefit investors, the courts must be independent and unbiased.
If executed as designed, these two projects propose some of the most liberal investment legislation in the world. Yet as bickering within the government appears to intensify, the prospect of a unified investment protection mechanism looks less likely. Both blocs recognize the importance of attracting investment. But at the end of the day, a robust economy, not investor guarantees dependent on an imperfect court system, remains the best encouragement.
2.2 Russia goes nowhere in global competitive rankings
Russia is going nowhere in global competitiveness rankings and remains in the mid-table in rankings of the world’s most competitive economies, while Singapore leapfrogs United States into top spot.
Russia has failed to climb up the global competitiveness rankings, the World Economic Forum (WEF) said today, remaining in 43rd place in its influential Global Competitiveness Index.
Researchers said Russia scored highly on factors relating to technology, higher education and the adoption of digital products by consumers, but was held back by a familiar list of barriers — corruption, first of all, followed by tax
9 RUSSIA Country Report November 2019 www.intellinews.o