Zee Beam News

MOSCOW, October 4 (RIA Novosti) - Russia's "shadow" economy accounts for more than 40% of the GDP, a senior Russian Interior Ministry official told an international seminar on fighting economic crime Tuesday. Andrei Gorodetstky, deputy head of the ministry's economic security academy, said, "At the present time, the shadow economy has exceeded 40% of the GDP." Criminal capital leads to numerous crimes and law violations linked with money laundering, which undermine economic law and order and hamper economic growth, he said. Vladimir Zaitsev, director of the academy, said Russian authorities were seriously considering tax amnesty. "This process is complicated and difficult," Zaitsev said. "However, it has not yet resulted in the return of criminal capital to Russia, regardless of the benefits provided by the [Russian] authorities." In August, the Economic Development and Trade Ministry forecasted net capital flight from Russia would reach $8-$9 billion in 2005, compared with $9.4 billion in 2004. In a recent study, Fitch international rating agency said despite increasing macroeconomic stability, the high level of capital flight from Russia reflected a complex business climate and a lack of confidence in state institutions and observance of property rights.