Restrictions on capital outflows not needed, Siluanov said
MOSCOW. May 30 (Interfax) - The main reason for the outflow of capital from Russia is that investors doubt that the government will stick to a tight macroeconomic policy, and fighting this phenomenon by imposing restrictions is inadvisable, Finance Minister Anton Siluanov said.
"Why is there such an outflow of capital? Our companies have some suspicion of the slackness, fuzziness of the economic policy that is being pursued. All investors understand that half the budget depends on oil and gas revenues," Siluanov said in an interview with Rossiya 24 television.
Capital outflows from Russia totalled $42 billion in the first four months of 2012, more than half of the figure of $80.5 billion for all of 2011. Despite the expectations of government officials, this trend is not reversing even though political tensions have eased.
Siluanov said it is not necessary to reimpose the restrictions on capital flows that were removed several years ago.
"I think that there is no need to impose some kind of restrictions on the flow of capital, since we worked toward this [eliminating restrictions - ed.] for a fairly long time. This creates serious conditions and understanding for investors that any capital flows can be brought in and taken out," Siluanov said, adding that reimposing restrictions would "significantly restrict our investment appeal."
The Finance Ministry's priority is to adopt and implement budget rules that restrict the use of oil and gas windfall revenues. They could be used for investment projects after the formation of a "safety cushion" amounting to 7% of GDP, Siluanov said.
"The budget must ensure macroeconomic stability and not create risks," Siluanov said, commenting on proposals to stimulate economic growth with public budget demand.