7 Nov 2022 09:20

Russian minister expects state role as "investor of last resort" to grow amid increasing uncertainty

MOSCOW. Nov 7 (Interfax) - The state's role as "investor of last resort" will grow given the increasing general uncertainty in the current situation, Economic Development Minister Maxim Reshetnikov said at a meeting President Vladimir Putin held with cabinet members.

"Growth of investment is a condition for the restructuring of the economy. However, there are a number of challenges that are affecting investment activity," Reshetnikov said in a report on instruments to support investment.

"The first is the decrease in demand for investment in sectors oriented toward exports. This is the oil and gas sector, chemicals and metallurgy. Last year they accounted for almost a third of all investment," he said.

"The second is the decrease in businesses' own funds, which make up more than half of the structure of investment financing. We're seeing this by the decrease in profit tax," Reshetnikov said.

"The third is the increase in general uncertainty and, consequently, businesses' reluctance to take on long-term risks," he said.

"The response to these challenges should be to strengthen the state's role as 'investor of last resort,'" Reshetnikov said.

He said this does not only refer to direct government investments that are written into the federal and regional budgets for the next few years. "They're important, but account for only 16% in the overall structure of investment," Reshetnikov said.

"The government's job is to provide investment projects with infrastructure and to reduce uncertainty and risks for private investors. This is particularly important given the fairly tight budget," Reshetnikov said, explaining his vision for strengthening the state's role in the area of investment.