MOSCOW, December 19 (RIA Novosti) – Russia’s unfavorable investment climate is a major factor behind huge capital flight from the country in recent years, Central Bank Chairman Sergei Ignatyev said on Wednesday.
The Central Bank has carried out a comparative research of capital outflows in other countries to understand why capital is leaving Russia on such a large scale, the chief banker said.
The comparative study showed stable capital outflows from such developed countries as Germany and Japan while developing countries like Brazil, Turkey, India, China and South Africa registered capital inflows.
Capital outflows in developed countries may be due to high capital saturation and low yields on capital, prompting companies to seek new investment opportunities abroad while developing countries are demonstrating the opposite trend, Ignatyev said.
“Russia falls out of this logic. This requires explanation. Net capital outflow of four percent of GDP over a period of several years is a strange thing and is related to specific Russian circumstances, including the unfavorable investment climate,” he said.
Russia’s capital outflow reached $59 billion in January-November 2012, Ignatyev said, adding the Central Bank maintains its 2012 capital flight forecast at $60-65 billion.
Capital flight from Russia peaked at $133.7 billion in 2008 when the global economic crisis first took hold, but fell to $56.1 billion in 2009. Capital outflow widened to $80.5 billion in 2011 from $34.4 billion in 2010.