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#6' 2003 |
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RUSSIAN GOVERNMENT TO SUPPORT EXPORTERS |
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Vladimir Potapov
he government of Russia adopted the concept of supporting exporters of industrial products. An appropriate document was signed by prime minister Mikhail Kasyanov. "At present, one of the most important directions of the Russian economic policy is to develop export, raise the share of products with high degree of processing in its structure and improve the competitiveness of Russian products in foreign markets", the document said.
Funds for supporting export will be provided annually from the countrys budget. They will be used to finance both credits and credit guarantees. In the latter case an agent bank will act on behalf of the government. Its task will be "to attract funds in the domestic and foreign financial markets against state guarantees, which are to be provided by the decision of the Russian government". According to the document, Roseximbank will become such an agent bank.
The guarantees cover Russian-made products except those, "state export support of which is considered inexpedient". The concept assumes that, when determining terms of export crediting from the federal budget, time limits will be set for using and repaying credits that will depend on categories of exported products. Thus, it is planned to establish the credit use period for consumer goods running up to 6 months with the repayment period of up to 3.5 years as well as the credit use period of up to one year with the repayment period of up to 5 years for machines, mechanisms, equipment and transport means, the credit use period of up to 2 years with the repayment period of up to 8 years for industrial (complete plant) equipment and the credit use period of up to 3 years with the repayment period of up to 10 years for investment projects.
One would like to hope that this time around the concept is backed up by the more-loyal-than-before attitude toward Russian industrialists and entrepreneurs. It is hard to blame the Russian government for protectionism: on the contrary, its inactivity in protecting interests of the national business from unfair competition was sharply criticized quite a few times. For example, many deputies of the State Duma said that the dumping was often used against Russian commodity producers while exporters offering their products in the Russian market enjoyed state subsidies. Deputy Sergei Glaziev openly blamed the Russian government for inaction that, in his opinion, resulted in losing practically 50 % of the countrys domestic market, including more than two thirds of retail markets in large cities. Russian commodity producers were completely forced out from some market sectors, especially from those that dealt with high value added commodities.
At the beginning of 2003 the draft of the federal law "On special protective, antidumping and compensatory measures with respect to import of commodities" was introduced to the State Duma. Measures contained in this bill are in complete compliance with standards of the World Trade Organization. If the bill is passed, this will facilitate the procedure of starting antidumping investigations. The sharp increase in import of this or that kind of foreign goods, subsidization of this import as well as "dumping supplies" may give grounds to begin such investigations. Producers, whose interests are being hurt, can apply to the Ministry of economy with a request to start investigation and, if it confirms the fact of inflicted damage, then, the government may take special protective measures.
Commenting on chances for the bills passage in the Russian parliament, Alexei Mordashev, the chairman of the board of directors at Severstal JSC and head of the working group of the Russian union of industrialists and entrepreneurs on Russias entry into the WTO as well as reforming of the customs policy, said:
"Business representatives are proposing to define more specifically the procedure of public hearings, which are to be held by an investigative body. This will make its work much more transparent. It will allow to additionally guarantee more commitments of the government to the business community before and during investigation. The business community also proposed an amendment, which will let all interested parties participate in investigation after providing a written statement".
Now the federal authorities have taken another important step toward the business community. The 2004 budget provides for $500M as state export guarantees. They set a task: to capture foreign markets again and develop the new ones in the future. So far the case in point is countries, which "have no investment rating". Those are CIS member countries, Vietnam, China, Egypt. These countries attract Russian enterprises by market opportunities but they are considered being risky. The government agreed to take upon itself the responsibility for 75 % to 85 % of projects provisions of crediting.
According to Dmitry Nekrasov, an official from the Ministry of economy, each country will get its rating dependent on the degree of risk and appropriate constraints of state guarantees will be established. The Ministry stresses that, above all, suppliers of high-tech products, can claim state guarantees.
In order to select categories of goods for export there are five standards to be applied:
the average percentage of added value in goods prices;
the level of competitiveness in world market by the price/quality ratio;
the intersectorial impact: to what extent the increase in exporting the given commodity will affect related sectors of the economy;
the extent of export orientation, i.e. the efficacy of state support instruments in ensuring export growth;
the export dynamics in the given category of goods.
In connection with the new export policy the government does not rule out the possibility of providing $50M to subsidize interest rate on credits. And as far as the state ability to support export is concerned, that is about all for the time being.
Preliminary estimates by experts show that all these measures will permit to raise the export component by $2B.
Producers, of course, would not mind having additional guarantees in case of "especially large export supplies". Some people believe that although the government started moving, it is not really "ready yet to implement the whole complex of measures of export support". For example, exporters need to get subsidized export credits. "The government has not said anything yet about its final position on that and it is not encouraging", notes Evgeny Yakovlev, the director of the concern Sylovie Mashiny (Power Machines).
Despite individual critical remarks, the reaction of the Russian business community as a whole to the latest government actions is positive. "Of course, funds provided for export support are not that big", says Andrei Neschadin, a well-known expert. "But the very fact that the government has matured to undertake these actions is good anyway", he adds.
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