russian federation: facts and figures
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Russian Federation
Facts and Figures
January 2011
Russian Federation – Key Social and Economic Data
Capital – Moscow
Russia is located in the eastern part of Europe and in the northern part of Asia
Total area1 - 17,098.2 thousand sq.km (as
of 1 January 2009 agricultural acreage amounted to 13% of the total area, forests – 51%, surface waters (including marsh) – 13%)
Population as of 1 January 2010 – 141,914.5 thousand people
Density of the population as of 1 January 2010 – 8.3 people per sq.km
Maximum length, thousand km:
Longitudinal direction - 4
Latitudinal direction - 9
State border:
North-west – Norway and Finland;
West – Poland, Estonia, Latvia, Lithuania, and Belarus;
South-west – Ukraine;
South – South Ossetia, Abkhazia, Azerbaijan, Georgia, and Kazakhstan;
South-east – China, Mongolia, Democratic People’s Republic of Korea;
East (marine) – the USA and Japan
Longest rivers, km:
Lena
Irtysh
Ob
Volga
Enisey
Amur
4,400
4,248
3,650
3,531
3,487
2,824
Russia is washed by: Largest lakes, thousand sq.km:
Seas of the Arctic Ocean (Barents Sea, White Sea, Kara Sea, Laptev Sea, East-Siberian Sea, Chukotka Sea)
Seas of the Pacific Ocean (Bering Sea, Okhotsk Sea, Sea of Japan)
Seas of the Atlantic Ocean (Baltic Sea, Black Sea, Azov Sea)
Baikal
Ladoga
Onega
31.5
18.1
9.7
Highest elevation, m:
Elbrus 5,642
Largest islands, thousand sq.km Average temperatures:
Archipelago Novaya Zemlya
Sakhalin
Archipelago Novosibirsky
Archipelago Severnaya Zemlya
82.6
76.4
38
37
January from 0°,-5°С (Northern Caucasus) to -40°, -50°C (east of Saha (Yakutia) where the lowest temperatures can reach -65°, -70°C);
July from 1°С (northern Siberian coast) to 24-25°C (Caspian lowlands)
The Russian Federation has the largest area in the world; it is ninth by population globally2
and sixth by GDP denominated in USD at purchase power parity3.
1 Source: Russian Register.
2 According to preliminary data.
3 Source: World Bank 2009.
1st
by total area, 6
th by GDP
3
Map of Russia
MO
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Ura
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Are
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Far
East
Fed
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Are
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So
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Fed
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Sib
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Fed
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No
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Cau
casu
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State Structure
Administrative Entities as of 1 January 2010
Republics 21
Krais 9
Regions 46
Cities of federal importance 2
Autonomous regions 1
Autonomous okrugs 4
Districts 1,868
Cities (incl. cities of federal importance) 1,099
Municipal districts and okrugs 328
Townships 1,295
According to the estimate as of 1 January 2010, the Russian Federation has 11 cities with a population of more than 1 mln people: Moscow (10.6 mln), Saint Petersburg (4.6), Novosibirsk (1.4), Yekaterinburg (1.3), Nizhny Novgorod (1.3), Kazan (1.1), Samara (1.1), Omsk (1.1), Chelyabinsk (1.1), Rostov-on-Don (1.0), and Ufa (1.0).
Russia and ROW Comparison
Russia’s position in the world in production of certain industrial and agricultural products
Crude Oil Production 2009
mbpd
2.5 2.52.63.03.8 3.2
9.77.2
4.2
10.0
0
5
10
15
Russia Saudi
Arabia
USA Iran China Canada Mexico UAE Iraq Kuwait
Source: BP
Gas Production 2009
bcm
72
593
131161
528
89103 85 81 77
0180360540720
USA Russia Canada Iran Norway Qatar China Algeria Saudi
Arabia
Indonesia
Source: BP
Coal Production 2009
mln tons
102
3,050
409558973
252298 250 184 135
0875
1,7502,6253,500
China USA India Australia Russia Indonesia RSA Germany Poland Kazakh-
stan
Source: BP Global Leader in Metal Reserves
% of total global reserves
18%
4%
9% 11%9%
0%6%
13%19%25%
Iron Ore PGM Gold Nickel CopperRussia's
Ranking 1 2 3 3 9
Source: US Geological Survey, 2010
1st
by crude oil production, gas and iron ore reserves
Russia and ROW Comparison (continued)
Wheat 2008
USD bn
2.6 2.4
15.8
6.79.3
11.7
4.44.5 3.0 2.7
0
6
12
18
China India USA Russia Canada France Pakistan Australia Ukraine Turkey
Source: FAO
Sugar Beet 2008
USD bn
0.3 0.20.40.40.7
0.4
1.31.1 1.1
1.4
0.0
0.5
1.0
1.5
France Russia USA Germany Turkey Ukraine Poland China UK Nether-
lands Source: FAO
Milk 2008
USD bn
3.6 3.2
22.8
7.89.511.7
7.37.4 6.4 4.0
05
10152025
USA India China Russia Germany Brazil France New
Zealand
UK Poland
Source: FAO
Meat 2008
USD bn
1.5 1.4
19.0
3.0
11.913.0
1.82.3 1.8 1.6
0
5
10
15
20
25
USA China Brazil Mexico Russia Iran Indonesia Japan UK Argentina
Source: FAO
Key Macroeconomic Indicators
2006 2007 2008 2009
Production Indicators
GDP change (%), year-on-year 1 7.7 8.1 5.6 -7.9
Industrial output, change (%), year-on-year 6.3 6.8 0.6 -9.3
Manufacturing, change (%), year-on-year 8.4 10.5 0.5 -15.2
Extraction of mineral resources, change (%), year-
on-year
2.8 3.3 0.4 -0.6
Fixed capital investment, change (%),year-on-year 16.7 22.7 9.9 -16.2
Fiscal and Monetary Indicators
Deficit (surplus) of the federal budget, (% of GDP) 7.5 5.4 4.1 -5.9
Federal government balane, share of GDP (%) 1 2
8.4 6.0 4.9 -6.3
M2, change (%), year-on-year 3 44.5 48.0 20.2 9.1
Inflation (CPI), change (%),year-on-year 9.0 11.9 13.3 8.8
GDP deflator 15.1 13.9 18.4 2.5
Producer price index (PPI), (%), at year-end 10.4 25.1 -7.0 13.8
Nominal exchange rate, average, RUB/USD 27.19 25.58 24.85 31.75
Real effective exchange rate, 2000 = 100 (IMF) 163.4 172.7 184.4 172.3
Real effective exchange rate, change (%), year-on-year (IMF)
9.4 4.2 5.1 -5.6
Reserve Fund, USD bn, at the end of period 137.1 60.5
National Wealth Fund, USD bn, at the end of the
period
88.0 91.6
Reserves (including gold), USD bn, at the end of the period
303.7 478.8 426.3 439.5
Source RusStat, Central Bank of RF, EEG, IMF, company estimates.
3 YoY change is calculated for annual average money mass of M2
Key Macroeconomic Indicators (continued)
Key Indicators
2006 2007 2008 2009
Balance of Payment Indicators
Trade balance, USD bn (monthly) 139.3 130.9 179.7 111.6
Share of energy resources in export of goods, % 63.3 61.5 65.9 62.8
Current account, USD bn 94.7 77.8 103.6 49.4
Export of goods, USD bn 303.6 354.4 471.6 303.4
Import of goods, USD bn 164.3 223.5 291.9 191.8
Gross foreign direct investments, US bn 29.7 55.1 75.0 36.8
Average export price of Russian crude oil, USD/bbl 61.1 69.3 94.4 61.1
Financial Markets Indicators
Weighted average corporate loan rate, % 1 10.4 10.0 12.2 15.3
CBR refinancing rate, %, at the end of the period 11.0 10.0 13.0 8.75
Real average rate on RUB loans, % (deflated py PPI) 1.6 0.9 -1.7 3.2
Stock market index (RTS, in RUR, at the end of the period)
1.922 2.291 632 1.445
Corporate Financial Condition
Share of loss-making companies 1 29.7 23.4 25.2 30.1
Share of loans in capital investments 1 14.3 15.5 17.6 20.1
Profitability (net profit/paid sales), % 1 25.6 36.8 21.5 28.7
Income, Poverty, and Labor Market
Real disposable income, (1999 = 100%) 219.0 245.6 251.3 257.1
Average wages in USD 390.9 532.2 695.8 587.0
Unemployment 2 (%, according to ILO definition) 6.7 5.7 7.0 8.2
Source RusStat, Central Bank of RF, EEG, EIU, IMF, company estimates.
1 Average weighted rate for RUR loans to non-financial institutions up to 1 year.
2 According to a random poll of population on employment issues as of the end of November.
Employment and Education
DISTRIBUTION OF EMPLOYED POPULATION BY AGE AND EDUCATION IN 2009
1
(as of the end of November; percentage of total)
Total Men Women
Employed – total 100 100 100
Including people aged, years:
Less than 20 1.1 1.4 0.8
20 - 24 9.5 10.3 8.6
25 - 29 13.6 14.5 12.8
30 - 34 12.7 13.0 12.4
35 - 39 12.1 12.0 12.2
40 - 44 11.7 11.2 12.2
45 - 49 14.4 13.4 15.4
50 - 54 12.9 11.9 13.9
55 - 59 8.0 8.4 7.7
60 - 72 3.9 3.8 4.0
Average age of employed population, years 40.0 39.4 40.5
Employed – total 100 100 100
Including those with:
Higher professional education2 29.0 25.8 32.2
Secondary professional education 27.5 22.5 32.8
Primary professional education 18.7 23.0 14.1
Secondary education 20.1 23.0 17.1
Primary education 4.5 5.4 3.6
No education 0.3 0.3 0.2
1 According to a random poll of population on employment issues.
2 Including post-university education.
Economically Active Population
As percent of the total1
1992 1995 2000 2004 2005 2006 2007 2008 2009 2010
Economically Active Population – total
100 100 100 100 100 100 100 100 100 100
Including:
Employed 94.8 90.5 90.2 92.1 92.9 93.3 94.3 93.0 91.8 93.2
Unemployed 5.2 9.5 9.8 7.9 7.1 6.7 5.7 7.0 8.2 6.8
Men 100 100 100 100 100 100 100 100 100 100
Including:
Employed 94.8 90.3 89.8 92.2 92.5 93.0 94.0 92.5 91.6 92.9
Unemployed 5.2 9.7 .10.2 7.8 7.5 7.0 6.0 7.5 8.4 7.1
Women 100 100 100 100 100 100 100 100 100 100
Including:
Employed 94.8 90.8 90.5 92.0 93.4 93.5 94.7 93.6 92.1 94.6
Unemployed 5.2 9.2 9.5 8.0 6.6 6.5 5.3 6.4 7.9 6.4
1 According to the data obtained from a random poll of population on employment issues: 1992, 1995, 2010 – as of the end of October; 2000-
2009 – as of the end of November. Starting from 2006 data includes Chechen Republic.
Unique Geographical Location
Unique location and transport access
The longest border in the world: ca. 60,000 km
Border with 18 countries in Europe, Asia, and America
Direct access to 12 seas and 3 out of 4 oceans
Proximity of the largest developing countries, i.e. China and India
Vast land resources
Largest country in the world
Total area of land – over 17 mln sq.km (6.5 mln sq. miles)
Different climatic and natural environmental zones (zone of arctic desert, tundra zone, forest tundra zone, zone of mixed and hardwood forests, forest steppe zone, steppe zone, zone of semi-deserts and zone of deserts)
Unique opportunities in the renewable energy industry
Availability of resources for cheap hydro power in European part of Russia and in Siberia
Around 120,000 rivers of more than 10km each, total length of waterways over 2.3 mln km
Substantial potential to generate alternative power based on wind, geothermal, sun power, and energy of biomass
Economic Ties and Integration with CIS Countries
Opportunities for further economic growth through economic and institutional integration with CIS countries
Recently-formed Customs Union between the Russian Federation, Kazakhstan and Belarus increases the total market by ca. 20%
Current initiatives on Common Economic Space and Free Trading Zone target further integration
Common trading zone, common unified customs tariffs and other regulatory requirements for Russia, Kazakhstan and Belarus
Kyrgyzstan and Tajikistan have requested to join the Union
Comes into effect from January 1, 2010
2010-2011 Initiatives
Cancellation of customs control within the Customs Union
Elimination of Customs Posts
Customs Union
Common Economic Space
Consists of Russia, Kazakhstan, and Belarus
Kyrgyzstan and Tajikistan have requested to join Free movement of goods, services, capital and labour
Common tariff for natural monopolies
Expected for completion in 2012
Free Trade Zone
Substitution of existing bilateral agreements between CIS countries with a common agreement aimed at creating favorable conditions for exchange of resources, establishment of a common market and partnership in financial policy and activities of companies
Draft agreement was prepared in 1Q2010 Negotiations on establishing Free Trading Trade Zone with
New Zealand, European Association on Free Trading, Vietnam
Enormous internal market potential of Common
Economic Space (CES)
Human Capital
Highly educated labour force.
One of the 7 leading countries by the number of Nobel Prize winners, most of prizes awarded for achievements in the field of physics.
High level of basic education.
Significant scientific research and technical resources base.
Substantial human capital supporting favorable opportunities for innovative growth.
Level of Education – BRIC Countries
%
94%92%
96%91%94%
87%
52%
78%
26%26%
74%
15%
0%
30%
60%
90%
120%
Russia Brazil India China
Primary Secondary Higher
Source: report of UNESCO, 2006
Share of Literate Education – BRIC Countries
%
99% 98%99%
66%
90%93%99%
82%
0%
30%
60%
90%
120%
Russia China Brazil India
Adults Children
Source: report of UNESCO, 2006
Highest level of educated population among BRIC
countries
Russia – Investment Priorities
Diversification of Economy –Development Priority
Share of mineral resources sector in GDP and in export is still fairly high; however, specific measures are taken in order to diversify Russian economy, this should have a positive effect on competitiveness of Russia in the world market
Key areas of diversification identified by the Russian President:
Energy efficiency;
Nuclear technologies;
IT and software;
Space technologies and telecommunications;
Medical technologies and pharmaceuticals.
Historical Structure of Russian Export
0.0
20.0
40.0
60.0
80.0
100.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
MachineryMinerals
Wood
Metals
Food and agricultural goods
Chemicals
Other Source: Federal State Statistics Service
The goal is to modernize and to diversify the economy
Priorities in Modernization of RF Economy
Main Objectives
Launched Projects
Count, Save & Pay: forming and promoting prudent energy consumption, coordination of manufacture and installation of meters
New Light: gradual replacement of incandescent lamps by energy-efficient light sources, including development of domestic production of energy-saving replacements
Energy-Efficient Homes: overall improvement of energy efficiency in residential blocks in selected cities
Energy-Efficient Social Sector: implementation of power saving programmes in public schools and clinics
Small-Scale Complex Power Generation: improving heat and electric power supply in Russian regions through manufacture and use of energy-efficient equipment for local power generation
Innovative Energy: encouraging innovative solutions in power generation through a national energy efficiency competition
Reduce Russia’s energy intensity to GDP ratio by 40%
through energy saving, improving energy efficiency and
eliminating regulatory gaps by 2020
Energy Efficiency
Main Objectives
Launched Projects
Count, Save & Pay: forming and promoting prudent energy consumption, coordination of manufacture and installation of meters
New Light: gradual replacement of incandescent lamps by energy-efficient light sources, including development of domestic production of energy-saving replacements
Energy-Efficient Homes: overall improvement of energy efficiency in residential blocks in selected cities
Energy-Efficient Social Sector: implementation of power saving programmes in public schools and clinics
Small-Scale Complex Power Generation: improving heat and electric power supply in Russian regions through manufacture and use of energy-efficient equipment for local power generation
Innovative Energy: encouraging innovative solutions in power generation through a national energy efficiency competition
Reduce Russia’s energy intensity to GDP ratio by 40%
through energy saving, improving energy efficiency and
eliminating regulatory gaps by 2020
Energy Efficiency
Priorities in Modernization of RF Economy (continued)
Launched Projects
Increase the efficiency and quality of information services
Develop a modern information infrastructure in all sectors
of the national economy
Space Navigation, GLONASS: enabling the provision of
navigation services to broad range of users: emergency
services, transportation, construction, oil and gas, logistical,
power companies, individual users
Space-Based Monitoring and Tracking: remote sensing of
the Earth atmosphere and surface; search for minerals,
monitor the environmental situation, weather forecast,
rescue operations in remote regions
Space-Based Targeting Systems: military and emergency
assistance, monitoring of global atmospheric processes and
other applications
Space Telecommunications as Part of Broadband
System: switching to broadband systems, especially to
digital broadcasting
Main Objectives
Space Technologies and Telecommunications
Priorities in Modernization of RF Economy (continued)
Projects related to development and manufacture of
pharmaceuticals, medical equipment and health products
aimed to promote the growth of innovative biotechnology,
cell, nuclear, and nanotechnologies in healthcare
Launched Projects
Production of the most actual medications and medical
equipment in Russia
Development and production of innovative medical
products, expansion of Russian manufacturers into new
markets
Main Objectives
Medical Technologies and Pharmaceuticals
Priorities in Modernization of RF Economy (continued)
Development of Supercomputers and Grids: building a high-performance, application-oriented computing environment based on multiple supercomputers; development of the grid infrastructures
E-Government: acceleration of the introduction of electronic public services and remote paper-free interaction between government bodies and individuals and companies
ICT Services in Education and Social Development: new educational Internet resources, focused on improving the accessibility, efficiency and quality of general and professional education
ICT Services in Healthcare and Social Services: computerisation and quality improvement for social services, personal health monitoring; medical reference systems aimed to unify the medical decision-making process in diagnosis, treatment selection, and drug prescription; automation of information flows
ICT Services for Life Safety: speech recognition, processing and enhancement, voice synthesis and biometry systems, real-time video surveillance, target recognition and emergency detection systems aimed to increase efficiency of emergency activities
Develop a high-performance, application-oriented computing systems
Improve the efficiency and quality of information services Develop a modern social and industrial information
infrastructure
Information Technologies and Software
Main Objectives
Launched Projects
Development of Supercomputers and Grids: building a high-performance, application-oriented computing environment based on multiple supercomputers; development of the grid infrastructures
E-Government: acceleration of the introduction of electronic public services and remote paper-free interaction between government bodies and individuals and companies
ICT Services in Education and Social Development: new educational Internet resources, focused on improving the accessibility, efficiency and quality of general and professional education
ICT Services in Healthcare and Social Services: computerisation and quality improvement for social services, personal health monitoring; medical reference systems aimed to unify the medical decision-making process in diagnosis, treatment selection, and drug prescription; automation of information flows
ICT Services for Life Safety: speech recognition, processing and enhancement, voice synthesis and biometry systems, real-time video surveillance, target recognition and emergency detection systems aimed to increase efficiency of emergency activities
Develop a high-performance, application-oriented computing systems
Improve the efficiency and quality of information services Develop a modern social and industrial information
infrastructure
Information Technologies and Software
Main Objectives
Launched Projects
Priorities in Modernization of RF Economy (continued)
VVER-1000 Standard Optimised Computerised Power
Generating Unit: creation in 2012 of a modern nuclear
power plant utilising a water-moderated reactor, adapted for
the Russian, European, and US markets
New Technology Platform: closed nuclear fuel cycle and
Fast-Neutron reactor - forming a brand new platform for
the nuclear power industry based on fast-neutron reactor
plants
Controlled Thermonuclear Fusion: implementation of
power generation technologies based on controlled
thermonuclear fusion, allowing for power generation
independent from fossil fuel
Fundamental Research: development of fundamental
science for nuclear energy
Overall and consistent development of the national nuclear
power potential
Guarantee long-term supply of cheap energy
Maintain Russia’s leadership on the global nuclear market
Substantially reduce uranium consumption
Mitigate environmental impact and nuclear proliferation risk
Nuclear Technologies
Launched Projects
Main Objectives
VVER-1000 Standard Optimised Computerised Power
Generating Unit: creation in 2012 of a modern nuclear
power plant utilising a water-moderated reactor, adapted for
the Russian, European, and US markets
New Technology Platform: closed nuclear fuel cycle and
Fast-Neutron reactor - forming a brand new platform for
the nuclear power industry based on fast-neutron reactor
plants
Controlled Thermonuclear Fusion: implementation of
power generation technologies based on controlled
thermonuclear fusion, allowing for power generation
independent from fossil fuel
Fundamental Research: development of fundamental
science for nuclear energy
Overall and consistent development of the national nuclear
power potential
Guarantee long-term supply of cheap energy
Maintain Russia’s leadership on the global nuclear market
Substantially reduce uranium consumption
Mitigate environmental impact and nuclear proliferation risk
Nuclear Technologies
Launched Projects
Main Objectives
Capital Inflow into Russia
In Russia there are no restrictions on free movement of capital both in case of
investments by foreign investors into Russia and in case of export of capital out of
Russia
The only limitation is investment in strategic companies which have special
importance for national security and economic stability
At the same time, there are restrictions on direct foreign investments in China and
India, and Brazil is planning to limit free movement of capital
Unlike China and India, in Russia there are no foreign currency limitations
The only limitation is the regime of managed floating RUR exchange rate, when
the conventional floor and cap values for ruble are set with respect to the dual
currency basket
At the same time, there are foreign currency limitations in China and India
Structure of Foreign Investments in Russia1
2006 2007 2008 20092 2010 (9 months)
2
Direct 29.8 55.1 75.0 36.7 25.1
Portfolio 8.1 13.1 -38.1 -4.9 0.6
Other 30.3 139.8 63.2 -25.2 4.4
Total 68.2 207.9 100.1 6.6 30.1
1 Source: Bank of Russia, according to balance of payments 2 Foreign investments in private sector; «-» means net reduction of liabilities to non-residents
Virtually no restrictions on free movement of capital
Goals of the Programme on Improvement of the Investment Climate in Russia
New liberalized procedure for issuance of work permits to foreign citizens
Simplification of the registration procedures, possible extension of the visa term
for up to 3 years
Abolishment of quotas for issuance of work permits and their unification
Optimization of procedures for access of business entities to the infrastructure
Development of a standard agreement and material provisions for connection to
the grid and networks
Identification of the list of users entitled to mandatory
receipt of services
Simplification of conditions and procedures for allocation and receipt of land plots and
construction activities, shorter period for issuance of construction permits
Simplification of customs formalities in case of export of high-technology goods and
machinery
Coordination of assistance to investors and protection of investor’s rights
Creation of a “one-stop shop” principle for requests review at the level of the
Ministry of Economic Development; complaints may be submitted directly to
I.I.Shuvalov, First Deputy Prime-Minister of the RF
Liberalization of the Russian tax policy
Separate tax regime for companies working in high-technology industries
Profit tax exemption:
In case of sale of securities if over 5 years and over 10% in ownership
For companies providing services in education and health care sectors
Large-scale measures to improve investment climate
Russian Banking System
At the beginning of 2010, total assets of the Russian banking system
amounted to approximately $973 Bn
Relatively low deposit activity in retail banking among BRIC countries – 12%
in Russia vs. 30% in China
State-owned banks account for over 40% of the total banking assets,
around 33% of all corporate deposits and 59% of all retail deposits
In India around 75% of all banking assets are controlled by the state,
in China – up to 80%
101 Russian banks are controlled by non-resident entities, representing
around 19% of all banking assets
In Russia there are over 800 medium and small regional banks,
representing around 5.4% of all assets
Russian banking system is characterized by high share of own funds –
around 15% in 2009
In Brazil – around 15%, in China – around 4%, in India – 6%
At European banks, the share of own funds in liabilities is around 6%
on average
Relatively low competition in domestic banking sector: on average one
Russian bank (except SberBank) has 3 branches (75 in Brazil, and 163 in
India)
The scope of anti-crisis measures taken by the Bank of Russia in 2008-
2009 has been estimated at 14% of the total banking assets
The highest share of own funds in the banking system among BRIC countries
Taxes in Russia vs. Other BRIC Countries
Country
Income Tax
VAT Corporate Income Tax
Personal Income Tax
China 25% 5-45% 23%
Brazil 34% 7.5-27.5% 17-25%
India 30-40% 10-30% 12.5%
Russia 20% 13% 18%
Taxes in Different Countries in 2009, as % of GDP1
Belarus 27.5% Italy 43.3%
Brazil 35.3% Japan 27.9%
Canada 33.3% Kazakhstan 26.7%
China 18.3% South Korea 28.7%
France 45.0% Great Britain 37.9%
Germany 40.8% USA 28.3%
India 18.8% Italy 43.3%
In 2009 the total taxes in Russia as % of GDP (39,064 trln RUR) amounted to 30.8 %
Russia has the most liberal and favorable tax regime among all other BRIC
countries:
Lowest corporate income tax - 20%
Personal income tax of 13%, regardless of income size
Opportunity to have a one-time write-off of 30%
of depreciation costs for tax purposes
From January 2011 – zero profit tax for educational and health care
institutions
From 2011 there will be no capital gain tax in case of long-term direct
investments
1 Source: The Heritage Foundation – index of economic freedom for 2010.
Low corporate and
personal taxes
Privatization Plans
The main objectives of the government policy in the area of federal property
privatization during 2010-2012 are
Structural reforms in the respective sectors of the national economy
Privatization of the federal property that does not support government
functions and federal powers of the Russian Federation
Creating favorable conditions in order to attract off-budget
investments for the development of companies
Income formation for the federal budget
The list of investment banks to be involved in organization of the federal
property privatization and/or to perform other functions of a seller on behalf
of the Russian Federation includes Credit Suisse, VTB Capital, Deutsche
Bank, VEB Capital, JPMorgan, Merrill Lynch, Morgan Stanley, Goldman
Sachs, Renaissance Broker and the Russian Auction House
In 2010 it is planned to complete privatization of about 250 federal state
unitary enterprises, privatization procedures for which started in 2009
Privatization Plans (continued)
The following privatization programme has been developed for 2011-2015:
Company Government stake
Stake / comments
VTB 85.5% In 2010: 10% of shares, in 2011: 10%, in 2012:
15.5%-1 share
SovComFlot 100%
In 2011: 25% of shares, in 2012-2013: 25%-1 share
with the possibility of reducing the RF interest in 2014
- 2015 below controlling stake
United Grain
Company 100% By 2012: 100% of shares
RusHydro 57.97% During 2011-2013: 7.97%-1 share
FGC UES 79.11% During 2011-2013: 4.11%-1 share
SberBank 57.58% During 2011-2013: 7.58%-1 share owned by the
Bank of Russia
Rosneft 75.1% By 2015: 25%-1 share
RosAgro-
Leasing 99.9%
During 2013 – 2015, with RF retaining the controlling
stake (50%+1 share)
RAB 100% By 2015: 25% of shares
RZD 100% Starting in 2013 up to 25%-1 share
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