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North Caucasian Federal District

Seeing the new opportunities is important

Alexander Khloponin, Vice Premier of the Russian Government and President’s Plenipotentiary Envoy to the NCFD (North Caucasian Federal District), believes that the District’s economic development will be given renewed momentum when the regional government authorities and the investing community see the opportunities opening large projects of the NCFD tourist cluster for small and medium-sized businesses

Strategy
The Sochi Investment Forum

Forum number one

The international investment forum in Sochi can be considered as a business card of the Krasnodar Territory for Russian and foreign investors. According to Krasnodar Territory Governor Alexander Tkachev, the forum is an indicator of the Kuban economy: investment projects presented by the area in Sochi demonstrate the most relevant trends of its development

APEC

A place to test ideas

Chairman of APEC organizing committee Ambassador Muhamad Norr talks to “Expert” about past, present and future of this organization

Siberia and Far East
Economic Results 2011

Adult Problems

Russian economy has been maturing more and more, so its growth does not depend on any reverses of market conditions and even oil prices or capital inflow or outflow, but on fundamental factors, in particular, our abilities to accelerate the national labor efficiency increase

Figure 1. GDP growth in 2011 completly drove accelerated domestic demand: both consumption and investments. Contribution of net exports became steadily negative
Figure 2. Oil price decline resulted in import substitution (1998-99; 2009) with the subsequent export-oriented growth (2000-04; 2010). Oil price growth led to the domestically-oriented growth (2005-08; 2011)
Figure 3. Following the 1998 crisis, the mechanism of reserving oil and gas related revenues to the budget made it possible to smooth the impact of changing trade conditions on the real exchange rate
Figure 4. Domestically oriented growth is followed by fast employment growth and labor productivity growth slowdown
Figure 5. Absolute and relative scale of the net oitflow of private capital from Russia grew to a considerable extent in 2011
Investment Overview

It is time to keep efficiency in mind

Thirty-five private investment projects worth USD 7.15 billion were announced, started to implement, or launched over the period from February 2012 to April 2012. Despite anticipations, the country experienced no usual boom of investment construction

Diagram 1. Monthly Dinamics of the Current Private Investment Projects
Diagram 2. Foreign investors have tired not to launch new projects in Russia for the last half of the year
Diagram 3. Last year, the oil refining sector became a leader among the manufacturing industries in terms of capital investments
Diagram 4. Even against the background of other industries, the investment boom in the electric power industry has been quite conspisious for the last few years
Diagram 5. The agrarian and food processing industries hoping to secure the Government support give appearance of investment activity filling the information field with declarations of intent
South Russia

Shoots of new contents

A study of this year’s major investment projects in the Southern Federal District (SFD) shows that the resources securing the growth of government investments in the area has been practically exhausted, while the amount of private investments in the post-crisis period have been growing at quite a decent pace. At the same time, this year has witnessed a sudden increase in the number of small projects: giant projects have been followed by medium ones

Diagram 1. Astrakhan Region moved up - to the second position thanks to LUKOIL
Diagram 2. Concentration of investments for the year slightly increased
Diagram 3. Tourism moved from the first position to the fourth position
Investments in the North-West

Following a beaten path

No conspicuous displacement of established investment projects occurred in the North-Western Federal District: new construction and modernization of facilities in every constituent territory are carried out in sectors where they were historically successful

Таблица 1. NWFD modernization projects started in 2011
Таблица 2. NWFD investment production projects started in 2011
Figure 1. The engeneering and imber industries became leaders in erms of investments in new production facilities in the NWFD
Figure 2. In Saint Petersburg, the ratio of the new to implemented production projects is 68.8% against 31.2%
Figure 3. In the engeneering and food processing industries, the amount of new projects and current projects are practically balanced
Figure 4. Saint Petersburg and Leningrad Region have the largest impact on investment development in the district
Investments in action

Tatar Phenomenon

Preparing and holding events of federal and global importance is a dream for every Russian region. This is a chance to solve many regional problems by profiting from funds of the federal budget and extra-budgetary investments. The Tatarstan government authorities used this method of solving problems in a professional manner

WTO

Adapting to the WTO

Government and businesses should demonstrate their unprecedented ability to agree in order to draw benefits from Russia’s membership in the WTO

Figure 1. Republic of Bashkortostan
Figure 2. Sverdlovsk Region
Figure 3. Chelyabinsk Region
Figure 4. Kurgan Region
Figure 5. Structure of the economy of the Ural-Western Siberian area by economic activities, 2010
Figure 6. South of Tyumen Region (excluding the KhMAD and the YNAD)
Reset Management

“We expect from the market too much”

Svetlana Le Galle, Executive Director for Investments of Managing Company “Fleming Family & Partners”, describes the difference between European investors and Russian investors, strange movements on the market, and the role of intuition

The labor market

About the system and screws

The labor market needs to be seriously reloaded: a complex solution to economic, social, migration, and educational problems is to be found; otherwise, it will be deprived of its key resources

APEC summit
Investment appeal Rating of Russian regions

Growth Rate — Coping with Difficulties

On the whole, investment risks in constituent subjects of the Russian Federation have been reduced. Large-scale government programs remain the fundamental driving force, followed closely by private investors. The main risk for the latter group remains poor governance quality and performance

Таблица 1. Breakdown of Russian regions by the investment climate rating in 2010 – 2011
Таблица 2. Investment risk of Russian regions in 2010–2011
Таблица 3. Investment potential of Russian regions in 2010–2011
Таблица 4. Top-10 regions from the potential and risk perspective
Таблица 5. Leading regions and outsider regions in terms of investment risk development
Таблица 6. Leading regions and outsider regions in terms of investment potential development
Figure. Expert weights of risk and potential components
Diagram 1. Investment rating of Russian Regions during 2010-2011
Diagram 2. Integral investment country risk and all of its components decline, but the highest risks investors in Russia are exposed to are related to state government
Diagram 3. More than 2/3 of regions have decrease their social, financial, and economic risks for the year and management risk reduced only in 40% of cases
Diagram 4. Investment risk declined in most economical heavyweight regions
Diagram 5. In an overhelming number of cases, management risk grew in regions where the manager was replaced
Diagram 6. Investment activities in Krasnodar Territory are progressively growing
Diagram 7. Investments risks are declining in most regions of the Far East
Republic of Sakha (Yakutia)

By leaps and bounds

Yakutia’s time has come. The territory of this republic witnesses intensive implementation of investment projects of global importance. And this enables Russia’s largest area to become one of the most dynamically developing and rich constituent territories of the Russian Federation

Wind of changes

The global economy growth vector has been steadily moving to Asia. This opens new and unknown opportunities for development of Russia’s Far East. The Republic of Sakha (Yakutia) is driving such changes

Map. The largest investments projects Republc of Sakha (Yakutia)
№2 (2)
20 августа 2012 - 27 августа 2012
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