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Government involvement in the economy in Russia has reached a new level

According to the results of 2018, the state’s share in the economy remained at last year’s level and amounted to over 60-70 percent “according to many expert estimates” reported by RBC with reference to the Federal Antimonopoly Service (FAS) report on the state of competition in Russia.

It is noted that the strengthening of the role of the state in the economy has moved to another qualitative state. This occurs in particular through the increasing role of state structures (including those not directly related to economic operations) in the distribution of financial resources, as well as through the processes of “pseudo-privatization” and the expansion of government regulation.

For example, in the banking sector, according to the Central Bank, the share of the state increased from 59.7 percent to 66.2 percent. The number of joint stock companies with the state’s share has doubled in five years. “The merging of monopolies with the state and the direct nationalization of production are inalienable properties of the economy”, the report says.

According to the FAS, increasing the role of the state leads to such costs as reducing the efficiency of the functioning of market mechanisms - lobbying resources come to the fore.

Earlier, the FAS submitted to the State Duma a draft law on the regulation of natural state monopolies. According to the head of the department, Sergey Puzyrevsky, the law “On natural monopolies”, adopted in 1995, hinders the development of a modern market economy, so it should be abolished.

 

Source: www.lenta.ru   

News
The Russian economy continues to lose its attractiveness in the eyes of large transnational businesses as consumers become poorer and the government continues the sanctions war with the West.

The Washington Institute of International Finance (IIF) sharply improved its forecast for the Russian economy. Its experts revised estimates of the fall in GDP in 2020 from minus 4.8% to 3.6%.

Net capital outflow from Russia by the private sector by the end of 2020 increased 2.2 times compared to the same period last year and amounted to $47.8 billion.

The decline in foreign direct investment (FDI) in the Russian Federation in January-September 2020 amounted to about 80%, according to the report of the World Bank (WB).
Net capital outflow from Russia since the beginning of the year has approached $48 billion.
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