At the 9th Gaidar Forum, in the framework of the discussion: “Capital Movement New Trends: the OECD Code” the topic of limitation of foreign capital on the Russian market was discussed. There are two main factors behind the idea of limiting the foreign capital movement: maintenance of the financial stability and the government’s unwillingness to let foreign investors in some sectors of the economy.


As regards introduction of limitations for the sake of financial stability, it is necessary either to limit the access for investors or ensure a free capital flow. It is imprudent to take decisions based on the current situation: they open borders when they are interested in investments and block capital movement amid the crisis to fence off from financial problems by means of foreign capital.

As regards access to strategic sectors, the Russia’s position is at least open and straightforward. There is a list of industries in which foreign investments are not allowed. However there are some sectors in which foreign capital can participate without restrictions. Take, for example, the automotive industry which is actually monopolized by foreign companies. One may remember in this context the situation when the Sberbank sought to buy an equity stake in Opel, but was turned down because western partners did not want Russia to get an access to new technologies.

Undoubtedly, direct foreign investments are a source of Russian economic growth. They are important in terms of privatization: in Russia the share of the state participation in large companies is too high and it can be reduced through foreign investments. Also, it is to be remembered that the influx of foreign investments is normally accompanied by the inflow of new technologies which promote the efficiency both of individual enterprises and the economy in general.

As regards direct foreign investments in the banking sector, their share is insignificant despite the fact that there are no explicit limitations. Generally, taking into account numerous bankruptcies and financial restructurings of Russian banks, a large-scale presence of foreign banks is highly undesirable. It is important to sort out the situation with Russian banks first and then return to the discussion whether it is worthwhile to let foreigners in the banking sector.

Speaking about foreign investments out of Russia, it is to be noted that they should be aimed at promotion of Russian exports, starting from of oil refinery building to support of non-primary sector industries, such as insurance and financial services.

Alexei Vedev, Leading Researcher, Gaidar Institute