A Russia on the decline is no place for small investors

[Muzh]

Mr. Zeihan argues that it's all downhill from here. "Russia is not a global player economically in any way, with the exception of energy sales to Europe. That's all they've got. I don't mean to say it's small, but it's certainly narrow. And the Europeans, to be perfectly blunt, are pretty sick of the Russians. So any time there's a decrease in demand in Europe, the first importer that gets cut is Russia."

The country, he says, is "in a long, slow twilight. They're going to have a couple of great years while the Europeans are in a mess. And they have relative strength because the Americans are distracted in the Middle East. But they realize that they're on borrowed time."

http://v1.theglobeandmail.com/servlet/story/LAC.20110110.RBTAKINGSTOCK0110ATL/TPStory/?query=Companies

[Shadow]

Too may factual errors to be believable.

As for small investors, Russia is a risky place, but not for the reasons mentioned in the article.

[ECOCKS]

The attraction to business in the FSU is the 130 Million in the Russia and 45 Million in Ukraine. I know a guy who is opening a BBQ joint in Bishkek (although he's probably counting heavily on the airbase there).

The uninviting factors are low disposable incomes, corruption, regulatory environment (or lack thereof), language hurdles, government instability, lack of familiarity with certain products, supply chain and employee issues.

[Gator]

The uninviting factors are low disposable incomes, corruption, regulatory environment (or lack thereof), language hurdles, government instability, lack of familiarity with certain products, supply chain and employee issues.

Don't forget the rule of law, or lack thereof.  Perhaps that is what you meant by the regulatory environment.

[ECOCKS]

Don't forget the rule of law, or lack thereof.  Perhaps that is what you meant by the regulatory environment.

* Regulatory Environment

* Corruption

* Governmental Instability

[tim 360]

* Regulatory Environment

* Corruption

* Governmental Instability

Russia scores really poor marks for business investment.  World Bank  ranked Russia 123 out of 183 countries , Heritage about the same.  Not as bad as Somalia or Sudan but easily the worst in Europe.

http://www.modernrussia.com/content/doing-business-russia-russia-ranks-123-world-bank-doing-business-report-2011

[55North]

....but easily the worst in Europe.

I would be surprised if Ukraine and Belarus were not as bad now.
 
Russia's also fighting hard to be one of the worst in Asia as well.

[Shostakovich]

Not to go too far off topic but I wonder if anything has come of Medvedev's pitch in California awhile back to create a high tech sector outside of Moscow.  Any special effort by the Russian authorities to create a 'safe-zone' to offset for some of the afore-mentioned problems?

[acctBill]

As someone who, in my initial years in Russia, spent time studying the value of resource companies I would say that the article is fairly accurate.  Russia at the moment is a one trick pony with regard to its economy, the energy sector is its biggest source of revenue.  Don't get me wrong Russia has vast resources of minerals, timber and other products wanted by the west.  The problem is that Russia doesn't have the technological or human expertise in the quantity and quality needed to exploit this wealth. 

Also western countries and companies don't trust the Russian government to honour agreements after what has happened to Shell and other energy companies.  Ikea has put any plans for expansion in Russia on hold citing corruption problems with various levels of the Russian government.  I seriously doubt that there is any major western company in Russia that hasn't paid bribes to some level of the Russian government at some time in their business life in Russia.  It's simply the price of doing business in Russia.   

[55North]

Any special effort by the Russian authorities to create a 'safe-zone' to offset for some of the afore-mentioned problems?

Of course.  Some occasional bollards.  Enjoy.
 
http://www.themoscowtimes.com/opinion/article/the-potyomkin-village-of-skolkovo/427977.html

[ECOCKS]

Souns like what I have come to expect from FSU "development" and "innovation" projects over the years. All glitter and flash without substance or form.

Potemkin would be proud at how well his lessons and techniques were mastered over the years.

[Eduard]

Yes, Russia's been talking about attracting "brains" to come work in Russia. But here is a little anecdote from my own personal experience. A couple of years ago I reconnected with one of my classmates since 1st grade (7yo) on odnoklassniki. He's been living in the US for about 7 years now with his family. How did they wind up here? Well, he is a scientist and invented a new heat shield technology which could be used for space shuttles during reentry. Well he told me that he knocked on every door in Russia and got nowhere. Then he happened to be at a trade show where there were NASA reps and showed them what he had. Guess what, he was offered a contract immediately and has been working for NASA since then, living here in the US.
This trend has been going on for years, let's see if Russia can reverse it. They might actually be able to pull it off if they allocate an appropriate budget and make moving there an attractive proposition to their target market. Cities like Moscow and St. Petersburg have a lot to offer - they are beautiful, plenty of great restaurants, museums, art galleries, theaters, concert halls, great night life, places to go and things to do. And off course if a guy is single... I haven't seen this many beautiful, single, available and hungry for male attention women anywhere in the world. If I was 10 or 15 years younger and single right now, I'm pretty sure that I'd be living in Moscow