Interview - A Tenth of Russia's Foreign Trade Turnover is Serviced through Vnesheconombank - VEB Chairman
Source: RIA "Novosti". Russian Economic News
Date of Issue: 23.05.2005 22:16
Belgrade. May 23 - RIA "Novosti", Nikolay Paskhin. Today, about 10% of Russia's foreign trade turnover is serviced thorough Vnesheconombank's system, Vnesheconombank Chairman Vladimir Dmitriev said on Monday in his interview with RIA "Novosti". He participated in the 14-th annual meeting of the European Bank for Reconstruction and Development Board in Belgrade.
As Mr. Dmitriev put it, Vnesheconombank performs the task of promoting Russian exporters, among other things, with the help of its subsidiary, Roseximbank, with Vnesheconombank's stake in it being 95%.
"Since last year the government system of promoting industrial exports started to operate, - said Dmitriev. Within the framework of this system Roseximbak is the only and main authorized bank. The first large-scale contract to supply two IL-96 aircraft to Cuba is going ahead. The contract is worth more than $100 million". The Russian Government granted a guarantee of more than $90 million against the contract.
In Mr. Dmitriev's opinion, the Bank's cooperation with aircraft manufacturers is sure to yield tangible results in the filed of promoting Russian exports. For example, Vnesheconombank jointly with a number of other Russian state-owned banks signed an agreement with the "Sukhoy" Aviaholding. The agreement provides for extending credits to manufacture a medium-distance passenger aircraft, said Vnesheconombank Chairman. By experts' estimates, the aircraft will be in demand not only on the domestic market but on foreign markets too, stressed Dmitriev. He said that a number of French banks act as Vnesheconombank's partners in carrying out this project.
VEB Forecasts that its Share in Pension Savings would Decline by 3% Annually
Moscow. May 18, 2005. INTERFAX - AFI. Vnesheconombank (VEB) forecasts that its share in the pension savings market would decline by 3% annually. This was announced by VEB's Trust Relations Department Director Alexander Popov at a conference "Russia's Pension System: its Past, Present and Future" held on Wednesday in Moscow.
According to him, restrictions on investing pension funds by the state trust management company and the government's plans to issue government securities show that if the state trust management company reduces its share in pension savings by 3% annually, VEB will be short of investment instruments as earlier as by the year 2008. And with a 5% annual reduction in VEB's share in the pension savings market, the state trust management company won't be short of investment instruments even till 2012. But in A. Popov's opinion, a 5% annual reduction option is unlikely. Most likely, VEB's share will be declining unevenly, and in this case the state trust management company will be short of investment instruments by 2010.
A. Popov said that for a great amount of pension savings to be transferred to private companies we have to overhaul the entire pension savings investment system and private companies have also to prove their efficiency to Russian citizens. He also noted that the new pension system had been in existence for only several years and over this period it had been changed fundamentally several times and that doesn't help to boost private persons confidence in the pension reform.
In VEB's view, Russian citizens confidence in the pension reform will increase if the pension reform is implemented consistently and effectively, A. Popov added.
As he put it, VEB offers to adopt in the shortest possible time standards for disclosing information on the dynamics of pension funds and conduct awareness campaign among citizens.
Furthermore, in A.Popov's view, it is crucially important to get a normative framework for mortgage market operation established. On experts' projections, in Moscow alone, the amount of mortgage securities could reach 1 billion US dollars in 2005, he added.
Moreover, the state trust management company should be allowed to invest pension funds in subfederal bonds. A.Popov believes that these bonds are to be included in stock exchange top-rate quotation lists. In particular, at the moment subfederal bonds worth 170 billion rubles are included in the Moscow Interbank Currency Exchange top-rate quotation list. If VEB was allowed to purchase these bonds in the amount of 10% of its pension savings portfolio, the amount of VEB's pension funds investment in subfederal bonds could reach 17 billion rubles this year, he added.
Besides, it is suggested that VEB should be allowed to invest up to 20% of pension funds in high-grade corporate bonds. But even in the case that the state trust management company is allowed to invest pension funds in subfederal corporate bonds and, given the fact that the market for mortgage bonds, in which VEB is allowed to invest pension funds, develops properly the growth in funds in the funded pension system would be so considerable that in the course of several years it could exceed the volume of the Russian securities market, said VEB's representative.
In this case, there is a good reason to give the state trust management company the chance to invest pension funds in foreign securities on the terms similar to those on which the Russian Federation stabilization fund is invested.
"Thus, there is plenty of opportunity to diversify the range of investment instruments for pension funds managed by the state trust management company. Broader range of investment instruments could result in transforming pension funds into a driving force for the entire Russian market", - summarized A.Popov.