Zee Beam News

NEW YORK, April 21. (RIA Novosti's Andrei Loshchilin) - U.S. investor William Browder, who heads the investment fund Hermitage Capital Management, yesterday spoke before the Council on Foreign Relations in New York and tried to dispel "the seven great myths about Russia." The situation is not that bad as Western mass media portray it, said Mr. Browder, whose fund manages assets worth $1.7 billion in Russia. The situation in Russia is far from perfect and even good, but the country moves in the right direction, he believes. Among common errors about Russian realities Mr. Browder named widespread perceptions in the West about growing corruption and sales of state-owned assets at a knockdown price, rollback of the democracy related to abolishment of direct governor elections, stalled reforms and all but the beginning of a new Cold War after the presidential elections in Ukraine. Moreover, the American financier does not agree that the Yukos case has destroyed the prospects of the Russian economy in general. Russia's foreign debt has been reduced from $158.1 billion in 1998 to $103.5 billion in 2004, and in 2005 is projected to go down to $97.5 billion. At the same time, foreign direct investment has increased from $2.7 billion in 2000 to $11.5 billion in 2004. This year it is expected to amount to $13 billion. Yet another indication of the Russian economy's growth is average annual per capita income, which has rised from $1,933 in 2003 to 2,593 in 2004 and this year is to reach $3,307, the investor said. In an interview with RIA Novosti, Mr. Browder said that during his quarterly visits to the USA he always tried to get the real picture of what was happening in Russia across to American investors and academic circles, as Russia's coverage in Western media was often distorted. For example, everyone is talking about capital flight from Russia, but somehow no one remembers that its foreign trade surplus grows steadily, he pointed out. According to the Russian Central Bank's information, last year this crucial indicator reached $60.1 billion, while capital outflow from the country was mere $9.4 billion. Mr. Browder believes that in 2005 Russia's GDP may grow by 6 or 7%, which will make it the world's second fastest growing economy. In his opinion, investment in the Russian oil sector is the most promising, because oil prices will remain close to the current record-high level in the foreseeable future and are unlikely to go down to $30 per barrel again.