It is a coincidence that Russia’s long-awaited accession to the World Trade Organisation last August was followed by mounting concerns about a slowdown in economic growth.
The news out of Russia tends to paint a dark picture of a country and its leader. Away from the headlines, however, changes of another sort are taking place – less talked about in the press but no less real for the businesses that have ridden Russia’s boom, bust and recovery under president Vladimir Putin.
“Since the economic downturn of 2009 there has been a new openness to foreign business, says Philippe Pegorier, country president and general director of French engineering giant Alstom, who has experienced the changes in Russia for 30 years. “There is a real will at the top to modernise infrastructure and industry, and to fight corruption,” says Mr Pegorier”
Frank Schauff, head of the Association of European Businesses, which represents more than 600 big companies in Russia, believes the crisis taught the Kremlin that it could only get ahead in co-operation with foreigners. “
Joerg Schreiber, president and managing director of Mazda Motor Russia, concurs: “We have seen a shift in the attitude to foreign business. It’s one thing to say on paper it’s a good thing, another to embrace it and let it merge and mingle with local business.”
Japanese carmaker Nissan now employs just eight Japanese and nine British staff. The factory, which opened in 2009, won the company’s global quality award last year.
See original article: Foreign trade: now Russia is in the WTO, will it obey the rules? on www.ft.com
Related resource: Ernst & Young attractiveness report 2013, Russia is shaping its future
Extracts from the report:
Shaping Russia’s future, finds that, although it still faces some challenges, Russia remains an attractive destination for FDI. There is a substantial gap between the perceptions of current and prospective investors. Those who are already working in Russia are more aware of the country’s real investment climate and the efforts being made to improve it.
Jobs created by FDI projects increased by 60%, indicating a large increase in average project size. Russia ranked second in Europe in 2012 in terms of employment generated through FDI, up from its
sixth position in 2011, and accounted for 8% of the total jobs created in the region, resulting from a rise in labor-intensive industrial activities. Manufacturing generated by far the most FDI projects and jobs.
Projects in strategic functions and other functions also increased. The automotive sector received the most FDI projects, and also accounted for the largest share of jobs created by FDI. The business
services sector has also increased its appeal, accounting for the second largest number of projects in 2012.
A large and expanding consumer market, solid telecommunications infrastructure and abundant natural resources are central to Russia’s competitiveness. Respondents had a mixed view of the human
resource potential and research, innovation and entrepreneurial environment in Russia. High levels of corruption, deficiencies in the legislative environment and inter-regional disparities limit Russia’s
North America and Europe continue to provide the bulk of Russian FDI investment. Companies from the US, Germany and France were the top investors in Russia in 2012. The number of FDI projects from
Germany more than doubled, mainly because of increased investment from automotive companies. While Moscow and St. Petersburg attracted the largest number of FDI projects, Kaluga and Nizhny Novgorod are also emerging as major investment sites.