RUBLE TURNED TO FACE INDUSTRY

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ANTI-CRISIS MEASURES: EVERY ATTEMPT TO WITHDRAW FROM RUSSIA THE FUNDS APPROPRIATED FOR SUPPORT OF ECONOMY WILL BE PROSECUTED

Premier Vladimir Putin: Money for real economy must stay in Russia.


Banks taken care of, the government is out to assist real economy. Premier Vladimir Putin aired the plan of measures designed to support auto industry, agriculture, trade, and building industry. General public was promised their details before long. Putin merely said yesterday that any attempt to withdraw the funds abroad would be prosecuted. The Central Bank was instructed to keep an eye on things.

Putin met with economic ministers and officials in Novo-Ogarevo. Anti-crisis measures were discussed. (It had been a fortnight ago that the premier ordered the government to compose a plan of what was needed to support real economy.) “We do not mind meeting businesses halfway,” Putin said, “but neither should businesses abandon civilized rules, quality of corporate management, or responsibility to consumers, society, and state.”

The action plan the Cabinet put together includes three parts. One of them aims to prevent insolvencies. The government intends to make their reorganization better transparent and improve charging lien.

The second part deals with amendment of state order placement procedures (price advantages are to be set for domestic businesses) and with “activization of particularly efficient forms of support of enterprises in different sectors of economy.” Construction firms may count on state support now. (Senior Deputy Premier Igor Shuvalov had said once that the state would try to keep up the decreasing demand in the real estate market with state funds.)

Along with everything else, the government will use the customs and tariff legislation to support national auto industry and agriculture. GAZ Group for one counts on higher import duties. Fixed electric power prices and railroad tariffs will help too.

Interests of oil companies are to be taken into account. They expected Putin to proclaim lower export duties yesterday but Putin never did. Observers suspect that state officials had failed to reach a consensus on the new export duty. Reuters suggested that export duties might go down 23-48% as of November 1.

Part three of the plan composed by the government deals with “more substantial support of small and medium businesses.”

The premier stressed the necessity to make the drain of capitals from Russia impossible. “Russian money must work in Russia,” Putin said. He complimented the Central Bank on tighter control over banks.

Experts meanwhile point out that all these measures are long overdue. “Now that the crisis has knocked at the door, all of that will have to be done in a rush,” Development Center economist Valery Mironov said. Yevgeny Gavrilenkov of Troika Dialog said he was not sure at all that all of the declared measures would be carried out. Also importantly, not all of the measures will actually play into the national economy’s hands. “As applied to the state order, preferences for domestic manufacturers are fine only whenever Russian industry itself is capable of producing equipment of proper quality,” Mironov added. “I suspect that the Cabinet cleanly forgot all about importers who bring equipment for production into the Russian market.”

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