| Headline: One step forward, two back in the regions Source: Euromoney Date: September 2001 Author: James Schofield It is over a year since president Vladimir Putin moved to bring unruly Russian regional governors to heel, but it is still unclear whether the system of federal districts he introduced will help or hinder foreign investors intrepid enough to venture into Russia. The harmonization of laws between local and federal level is all but complete and the intention was that the main role of the appointees to the new system, dubbed the president’s representatives, would be to produce a Russia-wide seamless legal and tax space. It was hoped this would reinforce Moscow’s control and indirectly create a level playing field for business. Commentators argue that, with the exception of the Volga federal district, plenipotentiaries have had little positive influence on attracting investments and may have made things worse. “There is no evidence that it has improved the situation overall,” says Sergei Tsakunov, chief executive of the state investment agency. “There has been no basic impact of the creation of the super regions on investment flows.” On the surface, laws and tax regulations in one region should look the same as in another: a clear improvement over the old patchwork of conflicting and restrictive systems that sprang up during the Yeltsin years, making regional investment such a minefield for foreigners. |