MOSCOW-Cap­i­tal flight from Rus­sia is ex­pect­ed to dou­ble to US$70 bil­lion this year, the Cen­tral Bank said yes­ter­day, high­light­ing in­vestors' con­cerns about po­lit­i­cal and eco­nom­ic un­cer­tain­ty in the coun­try. The new fig­ure is al­most twice the pre­vi­ous es­ti­mate that US$36 bil­lion would leave Rus­sia. In 2010, about US$34 bil­lion was pulled out. The ex­pect­ed cap­i­tal out­flow this year is equiv­a­lent to near­ly five per cent of Rus­sia's GDP, which amount­ed to 44.9 tril­lion rubles (US$1.5 tril­lion) last year. The Cen­tral Bank said for­eign in­vestors' cap­i­tal with­drawals have in­creased sharply due to the glob­al fi­nan­cial tur­moil, as they avoid so-called emerg­ing mar­kets in fa­vor of safe havens, such as Trea­sury bonds of stur­dy coun­tries like the US or Ger­many.

Rus­sians, mean­while, are in­vest­ing mon­ey else­where be­cause of an "un­fa­vor­able in­vest­ment cli­mate" in the coun­try, the Cen­tral Bank said in a re­port to par­lia­ment. A re­port from the High­er School of Eco­nom­ics, Rus­sia's lead­ing eco­nom­ic col­lege, said last week that the cap­i­tal flight can­not be re­versed with­out fun­da­men­tal changes in the Russ­ian econ­o­my. "Cap­i­tal is flee­ing Rus­sia not be­cause things are bet­ter else­where, but be­cause things are bad here and are prob­a­bly go­ing to get worse," the re­port said. "Things that need to be done are not new: Fos­ter­ing com­pe­ti­tion, es­tab­lish­ing the rule of law, fight­ing cor­rup­tion and state rack­et."

AP