01 February 2010

The investment climate in the Russian regions

The investment map of Russia shows the business potential of each region and the risk connected with possible investment. The fourteen investment rankings of the Russian regions for 2008/2009 has been prepared by Expert RA Rating Agency. You can also compare the results with a previous ranking.

The investment map and preferences of investors has radically changed. The economic crisis has forced investors to rethink priorities from both sides; potential and risk. Nowadays the most competitive are those regions with the lowest “human” risks; criminal, administrative and social. The potential of the consumer, that held the leading position in previous rankings, is less important for investors that in the past. The importance of infrastructure potential remains stable.

From one hand risk

For the first time in the top ten of regions with the lowest investment risk there are several regions with diversified economies and agro industrial functions as a result the leading group renewed by 70%. For the first time in the top ten appeared Penza, Voronezh and Tambov Oblast. Together with the Lipetsk Oblast these regions formed the new type of Russian region attractive for investments; relatively small, economically balanced with non natural resources. Their secret is the steady economy, based on agriculture and processing industries, social stability, calm criminal situation and good strategy.

Voronezh Oblast demonstrates an impressive reduction in the investment risk. In the past three years it has jumped from 68th position to the 7th in the rating of integral investment risk due to an improvement in all forms of risk. Tambov Oblast moved from the 57th position in 2004 to 8th place.

The Omsk Oblast is new in the group and it is the only Siberian region that entered the top ten of the smallest risk in all years of ratings. Recently the region has considerably improved in the areas of social, financial and also economic risk.

The capital regions, the  Republic of Bashkortostan together with Krasnodar Krai and Rostov Oblast mark the standards of investment attractiveness.

For the first time the Republic of Tatarstan and Belgorod Oblast do not appear in the top ten. The leading group has left Vologda, Nizhny Novgorod, Ryazan, Kaliningrad Oblasts, and also the Republic of Chuvash behind.

From other hand potential

The process of deconcentration investment potential has accelerated and the shares of capital regions (Moscow, St Petersburg) and large regions have decreased. Small and average regions are getting more competitive. The largest Eastern regions decreased their shares in the total investment potential: Krasnoyarsk Krai, Jamalo-Neneck Autonomous Okrug and Republic of Sakha.

In the top ten Russian regions with the highest investments there has only been one change: Perm Krai has jumped into the place of Samara Oblast. Samara Oblast has reduced its potential and is rated 12th place; the lowest in fourteen years of rankings. The problems in Samara were  caused by the crisis of AvtoVAZ; the biggest enterprise in the region. The greatest decrease in investment potential was noted in the Tomsk and Astrakhan Oblasts. Tomsk Oblast decreased human and consumer potentials. Astrakhan Oblast reduction was mainly in human and innovation.

Geography of investment potential

In recent years  the essential shift of investment potential from the Eastern regions, that are wealthy in natural resources, into the European part of Russia occurred. This creates the serious threat to the promising development of the Eastern regions. In the period between the crises (1998-2009) the investment potential moved to the West and into the regions of developed agriculture and processing industries.

Map of investment climate in Russian regions


No comments:

Post a Comment