Investment Portrait Of Modern Russia

The Russian magazine «The Capital of the Country» has inquired 35 Russian regions (for inquire there are 83 regions in Russia) and constructed the investment portrait of modern Russia. 


Nowadays direct  investments have reduced all over the word especially it concerns developing countries.  Russia is not an exception.  The questionnaire was filled out by the members of the investment departments of the local government. This research has been carried out together by the Chamber of Commerce and Industry and the Investment department.

The key industries in Russia according to experts are as follows:

Main branches of industry

 

So, we can see that traditional branches create  the center  of region's economy. (For  Tomsk  fuel handling equipment composes almost a quarter of the region's economy. For  Yakutia (the area where diamonds are produced)- 80 percent of all economy are nonferrous-metals industry and fuel-energy complex).

Priorities  - branches need to invest. So we come to the conclusion that main branches of industry coincide with the branches' center. But the  area of the branches ' priorities is more than the center. It includes two directions:  transportation industry and tourism. 

The next slide demonstrates us pain spots and regions' requirements.



Ranked distribution shows us the next picture (in the order of reduction)

So, we can see visible connection between pain spots and regions' priorities. 

It's interesting that pain spots don't agree with regions' requirements (or real market demand).  For example undeveloped tourism is considered as problem area, but there isn't demand for this subject of sale.  Exception is sector of building materials, in this branch there is permanent demand for cement.

We draw a conclusion that pain spots aren't support by demand. So the government to address the concerns of infrastructure and energy problems. Organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of Government of the Country, not local administration. And businessmen have never begun to invest without good foundation. I mean developed infrastructure.  It concerns foreign and Russian businessmen equally. For example in Sochi - the future capital of the winter Olympic game 2014 there aren't small ships which can go off the shore and solve a transportation problem. The first Government decides that businessmen are interested in this subject and they will organize public marine themselves. But nobody has done anything. Now moorages are built by administration.  Only after that private investors will buy some ships for public use.

The second  example.  Kaluga region is not far from Moscow. The minister of economy of this district Maxim Shereikin told us about their strategy.  Five yeas ago  they didn't understand why the investors didn't want consider Kaluga region for business.  But then they had understood - investors don't want to solve the documents problems.  Execution of documents  for land is very bureaucratic process in Russia. In addition power supplies needed for beginning business.  And the local administration decided to create industrial parks equipped by all necessary things - power and water supplies and typical building. In results the cluster of motor industry  exists in this region. A few week ago Lars Himmer - Deputy Managing Director of  the company Volvo Trucks Russia said us that they are very glad to choose Kaluga for business. They produced there Volvo Truck and want to increase output.

Many other districts pattern.  In Karelia  (this region is closed to  Finland) try to create transport infrastructure and build deep-water port. Near Moscow logging and timber processing complex is organizing now.

Most investment projects have been realized produced foreign investments. Companies from more than 25 countries work in Russia.

German companies work in 40 regions.

German	40
USA	36,7
Swedish	30
Chinese	20
British	16,7
French Finnish	13,3 13,3

Belgium Holland Austria Italy Norway take part in investment process in Russia.  It should be added here that foreign investors take over the initiative from Russian businessmen according to real demands.

Foreign investment direct at developing such branch as logging and timber processing complex (46% regions has realized such projects (Austria Sweden Germany Belgium USA Finland China). The market of the building materials divide into parts between different countries. The investment capital works in the market of food industry (production beer,  juice cold tea).

Investment in geological exploration and mineral deposit development is growing up. For example Canadian company work in Yakytia for developing field of silver. Chinese  work out deposit of metal in Tuva,  oil pool in Tomsk is work out by British company.

So there are a lot of foreign companies working in Russia with obvious success.


By materials of "The Capital of the Country"