"It is an absolutely negative move. We are paying off today but are certain to go begging tomorrow," said Delovaya Rossia Association head Boris Titov. "If we want to develop we should invest in the economy. How can one get rid of its money when the country lacks fitting airports and roads and its housing construction economy is in ruins," claims Titov.
He believes these funds could be channeled to support infrastructure projects as well as to credit small and medium business.
"Big business has got funds for development and even in emergency it can easily find loans both in Russia and abroad. Small business lacks such an opportunity," said Titov. He also believes that the mortgage system calls for government investment as well.
For his part, Alexander Shokhin, chairman of the Entrepreneurial Unions' coordinating committee, claims that the debt's pre-term repayment to the Paris Club confirms Russia's high investment rating.
"This is certainly a positive fact indicating Russia's capacity for not only servicing its debt but for canceling it ahead of schedule as well. This is evidence of Russia's high investment rating," he told RIA Novosti Friday.
He referred to the successful talks with Paris Club creditors as the Russian finance ministry's double victory.
Firstly, this cuts debt service spending and therefore saves funds for the budget, noted Shokhin. Secondly, this protects the stabilization fund from encroachments by all manner of lobbyists and its exploitation on the basis of pro-inflation methods."
"The use of the stabilization fund for foreign debt repayment is an anti-inflationary method, breeding no intricate inter-ministry conflicts over the division of its money," said Shokhin.
Former Finance Minister Alexander Lifshits, the deputy RusAla director-general, is also positive about the signing of the agreement on the debt's pre-term payment.
"This is a major achievement of Russian fiscal policy, second only to the establishment of the stabilization fund," Lifshits said when interviewed by the Ekho Moskvy radio station.
He also noted that the Paris Club debt is the worst kind of debt. "There are debts embodied in securities-they've got quotations, can be bought out or treated in some other ways, while the Paris Club debt is just a stone on the neck and nothing else."
Finance Minister Alexey Kudrin told reporters earlier this Friday that Russia would pay off the first tranche worth $13 billion early this June.
He also made clear that the pre-term debt deliverance would save Russia $400 million in interest payments in 2005 and almost $800 million in 2006. These funds can be spent on welfare and investment, said the minister.
