In 2011, Russia made a step forward in the global competition to attract FDI, according to our second Russia attractiveness survey. A boost in consumption, a strong labor market and an increase in investments are the prime drivers of this growth.
Russia’s attractiveness as an investment destination increased by 8 percentage points over 2011, the largest growth of any region.
In 2011 particularly, there was a boost in investors’ confidence in the country, positively affected by its accession to the WTO from mid-2012.
Strengths that make Russia a magnet for investors
- National resources. Of the survey respondents, 43% named an abundance of natural resources as Russia’s most globally competitive feature. Over half of respondents (56%) expect Russia to still be an energy sector leader in 2020.
- Market opportunities. Three-quarters of all respondents, and 85% of those already present in Russia, continue to be impressed with Russia’s domestic market. According to industry estimates, the country is poised to become Europe’s largest consumer market by 2018.
- Higher education advantage. Two-thirds of the respondents cited education as one of Russia’s competitive advantages.
- Balanced labor costs and skills. Nearly 56% of respondents described the availability of skilled labor as a positive factor for investing in Russia. Low labor costs were mentioned by 61% of investors.
- Solid telecommunications infrastructure. 64% of respondents list Russia’s telecommunications infrastructure as an attractive feature. Russia has the fourth-largest number of operational land lines and cellular phones in the world. In 2011, Russia also surpassed Germany to become the largest internet user in Europe.
Russia’s areas for improvement
- Political, legislative and administrative environment
- Transport and logistics infrastructure
- Innovation and a culture of entrepreneurship