Russia’s rich move money out
Published: 27 July, 2009, 10:12
In 2008 Russia’s rich almost doubled their transfers abroad compared to the previous year with overall investment into foreign economies totaling $25.6 billion.
Hi Max Papas, I could not agree with you more. I love Russia very much, but it will end up like England in the end the way it is going, with people from other places buying up Russia, if they don't encourage people of Russia to invest in their own country.
NO - absolutely this should not be stopped by tax and legislation, other than where the money has been clearly obtained through crime, which is quite a proportion of this outflow anyway.Tax and legislation, this is the EU and US approach, we want none of it. Yes, where the money is the profits of crime it should be gone after, but where it isn't we should only try to keep it in Russia by business means, which means creating opportunities to invest and safe storage of wealth. To go down the tax and legislate route will just hamper Russia. We need drive ourselves to create a business expansion environment, not a command and control contraction environment. Yes we need protection on some markets and always property, but that's it, after that let the capital follow the opportunity. It is the only way to operate efficient business without central control. Then tax the expanding revenue base at flat rate. These are the policies that win, not find a rich person and rob them, like in the EU and the West. I say it again, where the wealth is ill gotten, go after it, not in terms of tax but 100% to get it all back. However, don't invent laws to do it. Apply the rule of law and go after legitimate targets. Russia should aim to be a tax haven to put money into, not a tax prison to take money out of.
It's not just the super-rich Russians who are buying property abroad. Middle class Russians are taking advantage of lower property prices in places from Australia to Thailand. If these purchases are being made advantageously then either they will reduce the recurring expenses of hotels on foreign holidays or provide Russian with income from rental property.
John Bonar - absolutely correct, as you say, there are plenty of middle class taking advantage of good property opportunities abroad. There are also criminals laundering money in large amounts, and this is the reality of the situation. We shouldn't go into protective mode, let the ones who can make money, make it, and let the criminals be hunted down. Fair deal if you ask me!
Most Russians do not have money to send abroad. If those feew who skim the wealth created by the rest of the russians do not find places to invest in russia then the state should step in tax them and keep some of that money in Russia. There are all sorts of places to invest: Every seventh hospital has no hot water, a lot of food is purchased abroad intead of processing local grain etc nto higher level products. The list is endless. Abramovich is spending 360million dollars for his 4th yaught while russian needs are not met. This is scandalous and must be stopped.