Putin Backs Foreign Capital Repatriation

Vladimir Putin, the Russian President has decided to lend his support for the lawmakers who are trying to repatriate around $1 trillion worth capital. This huge capital is being held by high ranked officials and companies outside Russia. Putin stated that it’s high time that the country proceeds with an anti-corruption legislation to put limits on the politicians and bureaucrats who own foreign bank deposits and securities. Incidentally, this statement was made in the first state-of-the-nation address made by Putin since his reelection in last May. Putin added that this legislation should include the top leaders of the country such as Prime Minister and President too. According to Putin, the families of them should also be included.

Incidentally, Russia has set the growth forecast of the country to be 3.6% in 2013. This is less than the minimum of 5% – 6% which Russia may need over the next decade. According to Putin, to diversify and reignite the sagging Russian economy, a tough foreign jurisdiction is very important.

Russia is one of the most corrupt major economies in the world and Putin, since his reelection has taken stern decisions to combat the same. Putin ousted Anatoly Serdyukov, the Defense Minister from his post as graft allegations were made against Anatoly’s subordinates. An index to measure corruption was published by Transparency International on 5th December and it placed Russia alongside Honduras.

The State Duma deputy and a renowned member of the People’s Front Movement, Vyacheslav Lysakov stated that it is possible for the country to win back as much as $1 trillion in cash if an amnesty is offered. He added that the returning funds should be taxable as well. Incidentally, People’s Front Movement support Putin’s anti-corruption policies. Lysakov commented that the money is used to support Western economy and that’s a wrong thing.

Russia’s benchmark index known as The Micex has advanced a total of 3.3% this year. The MSCI Emerging Markets Index, however, has seen a growth of 12.9% this year. The Micex Index surged by 1.4% today and is currently at 1468.52.

According to recent statistics published by Sergei Ignatiev, the Russian Central Bank chairman, around $12 billion was spent on foreign properties in 2011. The investment was around $5.5 billion in both 2007 and 2008. It is assumed that the net capital outflows will increase to $75 billion in 2012.