Russia Attractiveness Report
Overview
Russia is a country located in northern Eurasia bordering the Arctic Ocean between Europe and North Pacific Ocean. Neighboring countries include Azerbaijan, Belarus, China, Estonia, Finland, Georgia, Kazakhstan, North Korea, Latvia, Lithuania, Mongolia, Norway, Poland, and Ukraine. The geography is diverse and includes vast forests and tundra in Siberia and mountains along the southern borders. The government system is a federation. The chief of state is the President and the head of government is the Premier. Russia has transitioned from a centrally planned economy to a more market-based economy in which many state-controlled firms have been privatized and sectors of the economy are liberalized. Russia is a member of the Eurasian Economic Community (EAEC), Asian Pacific Economic Cooperation (APEC), and Black Sea Economic Cooperation (BSEC).
With a population of 142 million people and a place within the top 10 economies of the world, Russia is, without a doubt, an emerging economic powerhouse. Since late 1999 and the beginning of high oil prices and the arrival of President Putin, the economic situation in Russia has stabilized and in many cases even flourished. On the back of revenues from oil and gas the economy has been given the chance to consolidate and diversify and Russia has climbed to become the EU’s third trading partner, with growth rates of around 6-7% over the last 10 years and Foreign Direct Investment per capita exceeding 3% of GDP, which is comparable to China. It is easy to see that Russia has transitioned into a promising and profitable market. The Gross Domestic Product in Russia was worth 2014.80 billion US dollars in 2012. The GDP value of Russia represents 3.25 percent of the world economy (reported by the World Bank.)
Infrastructure
The Russian rail network is around 85,000km long, making it the second longest in the world and it is this network which handles the bulk of freight transports within the country. Major investment is occurring in Russian ports, yet they remain inefficient. Road density is very low and the majority of roads are of low quality with asphalt used in many cases as an alternative to the more expensive concrete. As a result average speeds achieved on the country’s roads remain low and the frequency of accidents remains high. Moreover, there is a lack of roads throughout the country with many more remote areas being served by nothing more than dirt roads. There is also a lack of competition and know-how within the Russian logistics sector, which can worsen the problems with infrastructure. All in all, across rail, roads, seaports and airports there is a lack of efficiency and a lack of modern facilities and practices.
Key Industries
One of the main key industries in Russia is agriculture. Some of Russia’s key crops are grains, sugar beets, vegetables, beef, and milk. One of the other huge industries in Russia is mining. Mines in Russia produce oil, chemicals, metals, and gas. A few other industries are shipbuilding, aircraft and space vehicles, missiles, medical and science instruments, and textiles, among many others.
Trade
Russia imports and exports with many other countries. In 1993, Russia went into a bilateral free trade agreement with Ukraine. It is still in force today. (http://wits.worldbank.org/GPTAD/PDF/archive/russia-ukraine.pdf). Russia exports an estimated $529 billion each year, and imports approximately $334 billion. Key exports are petroleum and petroleum products. Imports include machinery, plastics, meat, iron, and steel. Ukraine is among one of the top countries Russia imports goods from.
Cultural Aspects
Russia’s population in 2013 was 142,500,482, which is 9th in the world. The country is made up of at least five ethnic groups; Russian, Tatar, Ukrainian, Bashkir, Chuvash, and other or unspecified groups. The National holiday in Russia is Russia Day, which is June 12. The main spoken language in Russia is Russian, but that is not the only language spoke in the country. The majority religion in Russia is Orthodox, but there are also small percentages of Muslims and Christians. The literacy rate in Russia, those over 15 who can read and write, is 99.7% on average. The urbanization of Russia is about 73.8% of the total population. The annual rate of urbanization is approximately 0.13%, which is estimated for the years 2010-2015. Major urban areas in Russia are Moscow, with a population of 10.523 million, followed by Saint Petersburg, Novosibirsk, Yekaterinburg, and Nizhniy Novgorod.
Political/ Economic Systems
Russia is a Federation and became independent of the Soviet Union in August 1991. The major political parties in Russia are A Just Russia, Communist Party of the Russian Federation (CPRF), Liberal Democratic Party of Russia, Right Cause, Rodina, United Russia, and Yabloko Party. Russia operates under the civil law legal system. They have a judicial review of legislative acts. Russia has an executive, legislative, and judicial branch. Their president, Vladmir Vladmirovich PUTIN has been in office since May 2012. Presidential elections are held by popular vote, and presidents are elected for six-year terms.