After a decade of dithering, foreign investment has started pouring in the Russian economy now. In the recent years, Foreign Direct Investment (FDI) has continuously been rising. Although some terrorist attack on Russian oil company Yukos and some other economic decisions of the Russian Government pushed Russia back to 11th place in AT Kerney's top 10 most attractive destinations for investment in the world, FDI inflow continued. Being one of the fastest growing economies in the world, investors find it difficult to ignore Russia as an investment destination particularly with its large and booming internal market with 145 million people, vast exploitable natural resources like oil coupled with technology, and skilled workforce. In the last five years, Russia has seen a continuous growth rate of around 6-7%, which is another factor to attract foreign investors.
Looking back, FDI inflow started during the period of Gorbachev after the law on joint ventures from capitalist countries was allowed in 1990. But this law could only provide the background for the opening up of the Russian economy. Just before the collapse of USSR in 1991, a new law was passed which was intact even after the collapse of USSR. This new law allowed the foreign companies to establish their fully owned subsidiaries in Russia. In the new millennium Russia has had immense opportunities for investors, both for domestic and foreign, but the actual inflow of FDI is quite low. |
