Today in Russian Business – May 17, 2011

Russia’s economy has reportedly underperformed in the first quarter, with GDP rising by 4.1% from a year earlier after increasing 4.5% in the previous three months.  The reasons for the sluggish pace apparently include the stagnation of corporate investment and $21.3 billion of capital outflows.  ‘While Russia clearly benefits from higher oil prices, there is no mechanistic pass-through to higher rates of real GDP growth’, says CNBC.   Kremlin-defying investment fund Hermitage Capital claims that in an attempt to provide a pretext for his arrest, its head William Browder was called, at short notice, to Moscow for questioning, even though he has been banned from Russia.  Russian authorities apparently intend to charge him with tax evasion as a move towards demanding his extradition from the UK.  After Deputy Prime Minister Sergei Ivanov lamented the state of its infrastructure, the federal government has announced it intends to allot $570 million in additional funds for the development of the Kuril Islands.  The Ananyev brothers have overtaken the Gutseriyev family to stand in first place in the rating by Finans magazine of the wealthiest business families in the country, with a combined net worth of $6.5 billion.  Why the EU’s plan to remove Russia from a list of emerging economies that enjoy preferential trade tariffs is a mixed blessing.