Financial and technical procedures to convert the Russian debt to Spain into investments will be developed within one or two months, Russian Prime Minister Mikhail Kasyanov stated at the meeting with representatives of Spanish business circled held in Madrid. Kasyanov explained that currently there is a framework agreement between Russia and Spain on prospects of converting the Russian debt to Spain into investments. Moreover, an agreement has been reached to implement two projects for a total amount of USD 100 million to redeem the Russian debt. One of the projects will be implemented along the scheme of Russian goods deliveries to Spain, while the other - in investments in production on the Russian territory. According to Kasyanov, issues related to participation of Spanish companies in privatisation of state property in Russia to offset debt payments should be settled soon. The premier noted that the normative acts applicable in Russia should be amended accordingly to introduce such mechanisms. Telling the Spanish entrepreneurs about the current economic situation in Russia Kasyanov stressed that it changed dramatically over the past 18 months. However, despite the fact that much has been already done, issues of fair competition, elimination of bureaucratic obstacles, ensuring stability and fair taxation, as well as availability of energy resources continue to remain the key problems. Almost all the programmes being currently implemented by the Russian government concern the settlement of precisely these problems. Thus, the premier noted, over the past two years the situation changed cardinally in the Russian tax system. The total tax burden on enterprises was lowered by 2.5 percent of GDP. Starting from January 1, 2002 profit tax of enterprises will be lowered to 24 percent from the current 35 percent. At the same time, all tax privileges will be abolished. Kasyanov paid special attention to the fact that the current economic growth in Russia is provided, first of all, by the growth in domestic demand and investment activity, while only 18 months ago it was ensured by devaluation and export receipts. At the same time, the premier noted that the rate of growth of foreign investments in the Russian economy is significantly lower than the growth of domestic investments. To stimulate foreign investors' interest in the Russian economy, a corporate behaviour code is being developed in Russia, which will soon be recommended to Russian enterprises. Besides, the Russian Cabinet pays a lot of attention to introducing international accounting and reporting standards. Kasyanov said that the banking sector will transfer to these standards already from January 1, 2004. Kasyanov promised Spanish entrepreneurs support of the Russian Cabinet in implementing projects in Russia.
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