09 June 2004 03:12
Yukos affair increases investment uncertainty - Fitch (part 2)
He said that this is an important factor as it increases
uncertainty about stimuli for investment in Russia on the part of
MOSCOW. June 9 (Interfax) - The situation surrounding the Russian oil company Yukos is increasing uncertainty about
investment in Russia, Ed Parker, director of the Fitch country rating department and the agency's leading analyst
on Russia, said.
However, the analyst noted that the Russian economy has
demonstrated confident growth in recent years. He said that the
macroeconomic indicators are impressive, especially growth in
private business. He said that from the point of view of Fitch, this is a negative factor.
investment last year, as this is of vital importance for maintaining high growth rates and diversifying the economy
in the mid-term future.
Nevertheless, Parker also said that there is still uncertainty about how the Russian economy will develop in the
mid-term, as a lot depends on the speed and scope of the structural reforms spoken of by Russian President Vladimir
Putin.
He said that there are still a number of areas were reforms are particularly urgent. He said that these include the
banking sector, whose contribution to current economic growth is quite high.
Other areas include the reform of the state sector, reducing corruption and business expenditure and also the reform
of the natural monopolies, which is necessary for the country to change over to having a fully-fledged market economy,
based on world prices. Russia's entry into the World Trade Organization will also help to increase competitiveness
and the openness of the economy, the analyst said.
He said that another important area is to create a system for protecting property rights and to further develop
market institutions. He said that it is also important to understand how the Russian economy will feel in less favorable
conditions, for example - if oil prices fall significantly.
Parker refused to speculate about Fitch increasing its rating for Russia, which is currently one step below
investment level.
He said that he has nothing to announce on this issue and that the agency is continuing to monitor the situation in
Russia. He said that if the agency sees that there are changes in the economy, in policy and in possibilities, it would
change the rating. However, he said that this would not happen automatically.
Parker said that the rating continues to reflect the overall positive macroeconomic station in Russia, and the
ongoing structural risks and vulnerability. [RU EUROPE ASIA EEU EMRG ENR CRU OIL AAA] rd <>
[Interfax] |
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