CORRECTED: Fixed assets in Russia get 10.8 trln rubles in investment last year - Nabiullina
(Growth figure in 3rd para corrected to 5.9%)
GORKY. Jan 24 (Interfax) - There was 10.8 trillion rubles worth of investment made in fixed assets in Russia last year, Economic Development Minister Elvira Nabiullina said during a Monday meeting with President Dmitry Medvedev.
That represented 21% of GDP, which was not enough, Nabiullina said.
"Investment dropped harder than GDP in the crisis conditions. The drop was 16.1%. In 2010 we have growth and more growth than we expected. We had projected that investment would grow 2.5%, but at the end of the year it was 5.9%," Nabiullina said.
Considering that contraction continues in a number of European Union countries, she said, that was "a more or less normal resumption of investment activity" for this post-crisis period.
But other countries such as India and China suffered no drop, she said, and the growth Russia achieved was insufficient.
"Compared to pre-crisis rates, investment growth was in double figures. For example, it was 22% in 2007. But the quality of investments gives rise to questions," Nabiullina said, explaining that for now there is not a lot of investment being put into modernization.
One bright spot, she noted, was that 38% of companies are actively investing in saving energy.
In Russia, "the proportion of bank lending is extremely small at around 9%," Nabiullina said. "This is even less than budgetary investments (20%). This situation reflects the investment climate. That means mainly that we are providing the bulk of investment out of budget funds," she said.
Medvedev asked Nabiullina what she saw as the proper combination of bank and budget crediting. She responded by saying that bank lending ought to be at about 20%.
Have any changes been observed in the targets of investment since the government started being actively involved in modernization, the president asked. "There are some, but not big ones. For example, investment in machine-building and communications is growing more than the average," Nabiullina said.
The investment climate in Russia is still not as satisfactory as it could be, and the Economic Development Ministry needs to come up with a new proposal on how to better it, Medvedev said.
One priority for 2011, Nabiullina said, needs to be simplifying the procedure for obtaining building permits and improving regional investment. Her ministry has worked up a minimum investment-climate standard for the regions. "Some of the measures are already prepared and some are still being worked out. We will be ready to report to you on them soon," she said.
Medvedev noted that the job of improving the investment climate "is not simple and cannot be done in just half a year." "The investment climate is changing very weakly," he said.
"And that is so even given that we've had obvious successes in developing the economy. Moreover, we are exiting the crisis well overall, compared with other countries, but the investment climate unfortunately remains very, very complicated," Medvedev said.
The investment climate has three components: regulatory standards, the actions of bureaucrats, and a court system able to protect entrepreneurs, the president said. "All three of these absolutely need improvement," he said.
Technical regulation also requires modernization, Medvedev told Nabiullina. "An obligatory form of technical regulation has to be brought to conclusion," he said.