| Russia: PEST Analysis for Foreign Direct Investment | Principal of Finance |

Russia: PEST Analysis for Foreign Direct Investment
Overview
Russia is a large country with a long history extending back to the 12th century AD when it first freed itself from Mongol domination (Russia). Russia’s most relevant historical past is its emergence from Communist rule and the breakup of the Soviet Union under Mikhail Gorbachev in 1991 due to his policies of glasnost and perestroika, or opening and restructuring. Since that period Russia has been defined by a kind of political turmoil that has seen every sort of leader from a, it is said, Vodka imbibing progressive in Boris Yeltsin to a former intelligence officer in the KGB with a black belt in Judo, in Vladimir Putin (Russia).
While the political turmoil has unfolded publicly, the business and professional climate has deteriorated from the heady days of the Soviet breakup when foreign enterprises believed the region was ripe for investment and, to some degree, exploitation. The level of corruption has largely dissuaded the full development of foreign investment and is an international concern, not just local to Russia: “the prevalence of corruption and crime in business affairs has been generally recognized as a major cause of concern...”(Taylor, Kazakhov & Thompson par.1). Until Russia is able to solve this unregulated chaos, business in Russia will remain an exercise in risk rather than revenue.

Political Many researchers relate Russia’s economic and commercial enterprise concerns to its political problems that arose following the breakup of the Soviet Union. The period that followed, although romanticized in the West, was essentially a political vacuum that fostered an anything goes mentality with the political establishment awarding itself flush perks and being given perks by the freewheeling