THE Kremlin is leaning on Russia’s oligarchs to spend US$120 billion on new investments by the end of Vladimir Putin’s term after shelving plans to hike taxes on big business.
That’s an increase of 15-20 per cent and part of the Russian leader’s plan to take overall investment to a quarter of gross domestic product – the highest level since the Soviet era. If the Kremlin succeeds, it could also leave less money for shareholders because the bulk of capital spending in companies is funded from profits.
But with the economy stuck in a rut as Western sanctions cut off foreign capital and technology, the Kremlin is running out of alternatives to jump-start growth and meet Mr Putin’s pledges to boost living standards. (Read more….)