Wednesday, December 13, 2006

Russia in the spotlight

If you are interested in doing busienss in/with Russia you should have a look at the recent Business Week magazine (December 18, 2006) There are 2 full articles about Russia, which in a way complement each other.

On the bright side it shows that Russian middle class is growing, hence the consumption is growing too including the demand for foreign made goods. In addition Russia is also popular with foreign investors and the stock market is up.

However on the dark side there is a question raised about the sustainability of such a growth since the most of the money inflow is oil money and only a very tiny percentage of population really benefit from it. And in addition all the recent political scandals and a growing controling role of the government are called "troubling signs" by foreign experts.

Both articles make a great reading (one is an essay style and the other is an interview with a famous Russian chess player, Garry Kasparov) and I just wanted to add my personal views on the topic. It is true that sometimes doing business in Russia is like walking on the mine field unless you have a map of dangerous areas. But even with the "map" you have to be very careful because there might be a dozen of addendums to it which you, as an outsider, might not know about. Or in the middle of your walk the government can intervene and change the rules of the game...

Why are people still coming then, you may ask? Well, I guess it's because the prize on the other side of the field is really attractive. Just look at the automotive industry: in the recent years a number of foreign car manufactures (Ford, Toyota, VW, etc.) started to open their huge manufacturing plants in Russia despite the fact that the Russian governemt is very protective of the Russian automotive industry and potentially it can interefere with the foreign manufactures' plans if they see a real threat. But Ford and the likes are still going for it because there is demand and hence, there is future. It might not be the bright and easy one but the potential is there.

1 comment:

James said...

Is there a link you can share to the site