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Some State-Run Corporations Could Move to Far East
13.04.2014 10:22
Some State-Run Corporations Could Move to Far East
Photo Credit: http://www.trend.az

The Russian government wants big companies to move to the Far East in a move to develop the remote region.

      According to Newsru.com, an online media outlet, several corporations including RusHydro, Transneft and Rosgeologia may re-locate to the Far East. The proposal came from the government, adds the report.

      The authorities have been long keen to stimulate the region’s economy but have failed to come up with a comprehensive plan. The relocation may help to expand the local tax base and spur growth, including new infrastructure projects that would be launched to accommodate new personnel.

      The efforts have intensified after poor economic performance in 2013 and a sharp devaluation of the national currency in early 2014. Only in March, Russians withdrew some 338 billion roubles, or almost $1 billion, from bank deposits.

      The total accounts for two percent of deposits in domestic banks, with some of the cash converted into dollars and some invested in real estate.

      The panic had a negative impact on revenue as national lenders earned only 233 billion roubles in 1Q 2014, down 2.5 percent from the same period of 2013.

      Even the biggest banks were hit, including Sberbank, which lost 67.8 billion roubles in deposits in March (-0.86 percent). VTB24 was 13 billion roubles short (-1 percent) while Uralsib’s deposits shrank by 2.7 billion roubles (-2.3 percent).

      There’ve been many concerns about the economic impact of Russia’s move to incorporate Crimea.

      The Russian economy is unlikely to rise above 2 percent in 2014 amid investor uncertainty over the possible impact of sanctions, said the Economic Development Minister.

      According to Alexey Ulyukayev, GDP is expected to grow 1.8-1.9 percent undermined by capital flight worth $100 billion.

       




Author: Mikhail Vesely

Tags: Ukraine crisis Crimea Russia's Far East Transneft  

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