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Jun 22, 2005 5:12 pm


WHAT THEY DON'T (AND INVESTORS SHOULDN'T ) LIKE ABOUT RUSSIA



From Kommersant, June 21, 2005
The Land of Frightened Investors
The West rates Russian reforms
By Aleksey Shapovalov


“No less than 40 percent of company managers believe that the courts are
incapable of enforcing execution of their decisions. The majority of
managers note that the courts work slowly and legal proceedings are
expensive. And the situation is getting worse.”

“Politicians and judges need to focus their attention on strengthening
accountability of the judicial system and investing resources in base
potential, especially in providing courtrooms and simple information
technology infrastructure, as well as in hiring court clerks and
administrators to free up the judges' time.”

OECD

“Recent attempts to reduce bureaucratic meddling in the affairs of private
business, especially small business, have had a certain positive effect.
However, they are still only attempts and have often been ineffective.”

“Much needs to be done to eliminate unjustified official and unofficial
restrictions on foreign trade and foreign investments. Competition with
Western companies will become the main instrument for protecting competition.”

“In each of the sectors [the power and gas industries, railways, and the
banking sector] controlled by the state, companies often behave in such a
way that they infringe on competition or simply destroy it. Attempts to
change this situation usually come to naught. The antimonopoly agencies can
be only partially blamed for this, since antimonopoly legislation and
policy in Russia are still insufficiently effective.”

“Judging from their public statements, the Russian authorities understand
the need for reform and are prepared for it. Meanwhile, the actions of
government agencies often contradict the declared priorities of reform.
Today, one can observe a shift towards a more interventionist state policy
and less lawful behavior on the part of the state. Russia's long-term
economic growth depends in many respects on whether this tendency changes
and reforms resume. This will create not only a strong state, but also a
state with supremacy of the law – a state both accountable to the public
and effective.”



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