MOSCOW (AP) -- President Boris Yeltsin has ordered his government to draft a bill to protect investors against sudden, unfavorable changes in the Russian laws, an official said Wednesday.
Russia's legal system is notoriously chaotic and prone to sudden changes. As new elections approach, investors -- both foreigners and wealthy Russians -- are getting particularly wary of putting money into Russia for fears of losing it if hard-liners come to power after the parliamentary vote set for December or the presidential election next summer.The new bill would offer Russian investors "guarantees against unfavorable changes in Russian laws" among other things, presidential economic adviser Anton Danilov-Danilian was quoted as saying by the Interfax news agency.
Earlier this month, Yeltsin signed into law another, similar bill to protect foreign investors from harmful changes to their taxation regime if they meet key conditions, such as investing at least $41 million into projects included on a government list of investment priorities.
Russia is going through one of the worst depressions ever suffered by an industrialized nation, and badly needs investment to improve its economy. Investors have fled the country in droves since the onset of an economic crisis last August.
Foreign investment in Russia fell 40 percent to $1.5 billion in the first quarter of 1999, compared to the same quarter of the previous year.
The country's gross domestic product in the first quarter of this year shrank 2.9 percent from the same period in 1998, and stood at just over $22 million, the State Statistics Committee said Wednesday, according to Interfax.
Government officials hope that Russia's economy will finally reverse its fall and the gross domestic product will grow 1.5 percent to 3 percent next year. But many experts doubt the optimistic forecast.
Meanwhile, Prime Minister Sergei Stepashin conceded that his government still has no comprehensive economic program, and said he won't take any radical steps in the economy.
"We need ... precise, well-thought-out moves, a search for optimal ways of economic development," Stepashin told the weekly Argumenty i Fakty published Wednesday. "I am reproached for not having formulated an economic program. That is true. But I am against hurry for the sake of populist goals."
In order to pay its debts, the Russian government printed more than $2 billion in the first half of this year, an analyst at the Russian European Center for Economic Policy, Peter Westin, said Wednesday, according to Interfax.