• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Russia has made great progress in achieving macro-economic stabilisation and is currently pursuing a successful transition to a market economy.

Extracts from this document...


Introduction Over the past year the subject of WTO accession has become one of the hottest foreign policy issues in Russia. It is clear from Russia's long history, the size of its internal market, and its importance in the shaping of world politics that the process of Russian economic reform will have wide-ranging political and social implications. Now Russia is going to become one of the members of the World Trade Organization (WTO). It not only gives lots of advantages to the Russian company, but also some negative problem. After joining the WTO, there will be lots of foreign investment in Russia. Whether it's environment suitable for foreign investors? In this article, I will analyse the economic, political and culture environment in Russia. Economic environment Russia has made great progress in achieving macro-economic stabilisation and is currently pursuing a successful transition to a market economy. * Income Through out twenty years of development, the Russian income level has increased constantly. We can conclude this by the GDP and GNP. .Over the last few years, the annual Gross Domestic Product (GDP) growth 6% in Russia.Moreover, we can see at the figure of Gross National Product (GNP), which was 8,660 US dollars, rank 79 in the world. Here, we should notice that in 2001 the GDP went up 5.1 percent, which is one of the best figures in the world. Furthermore, Russia's GDP grew 4.2% 2002 and GNP grew by approximately 4% in the first half of 2002. Rapid Russian real GDP and GNP growth both has benefited from rapid rise of net exports and domestic demand. On the other hand, according to a forecast released by the Russian Economic Development and Trade Ministry, growth of real incomes reduced the share of the population below the subsistence level to 33% in 2002, and this figure is extremely high by international standards. In 2002, the number of citizens with income below the subsistence level was registered at 27 percent, and this figures expected to go down to 26 percent in 2003, 25 percent in 2004 and 24percent in 2005. ...read more.


While portfolio investment declined to 2.4 %, and other foreign investment grew up to 75.2 %. The excess of other investment as compared to the amount of direct and portfolio investment is a negative factor. The sectored structure of foreign investment is characterized by a growth in investment in industry at the background of declining investment in other aspects of economy. In the first six months of this year, the rates of growth in foreign investment in industry (+ 30.5 %) exceeded the similar indicators of growth of aggregate amounts of foreign investment in the Russia's economy. At the same time, the direct investment in industry increased by 6.7 % as compared with the figures registered in the first six months of 2001 and made US $ 887 million (47.4 % of the aggregate foreign direct investment in the RF economy). Other investment in industry made in this period increased by 48.1 % and reached US $ 2.26 billion (36 % of the aggregate foreign direct investment in the RF economy). The decline in the amount of portfolio investment made 26 %.Therefore, boosting FDI is a key priority of the Russian Government. On this part, the EU has been stressing the need for Russia to provide a stable and reliable legal and institutional framework, which would encourage foreign investor confidence in the Russian market. in perspective Russia's ratification of the WTO accession, Energy Charter Treaty, would also contribute prominently to boost FDI inflows. Foreign companies` opportunities and threats When a foreign company consider invest in Russia, both the economic growth and the reform policies about the country are thought by the investor. Nikola (2002) stated that while the prospects for Russia's oil industry look bright in the medium term, should be warn that Russia's precarious legal system -- its lack of transparency and widespread corruption -- are keeping away many potential long-term foreign investors. ...read more.


Russian does not like the number of thirteen, just like the western people, because they think that number means danger and death. * Business amenity In Russia most of businessmen will prefer dressing in grey or cyan colour. They would avoid black cloth. Dressing good or not is very important for Russian, because it not only presents your standing, but also represent that you have been concerned of this business or not. Some recommendations to the companies for the HRM strategy According to the cultural differences, foreign companies want to enter the Russia's market that they must pay more attention on human resource activities, such as equal opportunities, health and safety, training and development. Firstly, consider different language. I suggest that when organisations recruit people, the language should be considered. Because the Russian language is the most people language, so, recruit the people speak this language is better for the business communication. Secondly, because the colour preference, I recommend the companies can choose the lucky number to promote their products. For example, use number 7. Thirdly, if the foreign companies want to cue the Russia's customer into positioning their brand in a certain way, the colours and the logos used in the design, packaging and advertising of a product can send very powerful message about the personality of their brand. Fourthly, be aware the dress. Concerning the business amenity in Russia, the investors should avoid dressing black suit when the business men take part in the business occasions. Conclusion On the whole, Russia economy future is positively despite some aspects insufficiency. For example, a lot depends on the bureaucrats. As far as WTO accession is concerned, it could boost restructuring by Russian firms. With increased international competition and better access to imported components and foreign consumer markets, Russian firms will become more productive and efficient. For foreign investors to come, Russian needs to have a normally functioning legal system and legislate understandable taxation system to foreign investors. Besides, a normal banking system is needed. Pt-Russia 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Retailing In India - A Government Policy Perspective

    2.4 Industry Dynamics Competitive behavior in Indian retail is characterized by lack of exposure to best practice skills as well as an implicit subsidy for counter stores through differential enforcement of laws. In addition, despite a large number of players, we see an absence of price-based competition (particularly in food).

  2. An Empirical Investigation into the Causes and Effects of Liquidity in Emerging

    Finally, Ferrucci et al (2004) also find that higher long-term (10 year) US interest rates have a strong negative impact on EME bond yield spreads. This result suggests that the effect of a steeper yield curve on leveraged investors' incentives was greater than the long-term cost of borrowing to EMEs.

  1. Case Study: The Home Depot

    The part of the market where Home Depot or others like are situated, is hard to enter. Starting up a company in an industry like this is real expensive. Start up cost together with the costs to become and maintain ''green'' add heavily to the cost of a newcomer.

  2. Assess the relative merits and demerits of a market economy. Why have each East ...

    The government is also responsible for the issue of money and for the maintenance of its value. They also have to ensure a adequate legal framework for the enforcement of property rights. But in a free market there is strong emphasis on the government playing as much of a minimum role as possible.

  1. Causes of the Great Depression

    Coolidge on February 26, 1926, which reduced federal income and inheritance taxes dramatically. Andrew Mellon, Coolidge's Secretary of the Treasury, was the main force behind these and other tax cuts throughout the 1920's. In effect, he was able to lower federal taxes such that a man with a million-dollar annual income had his federal taxes reduced from $600,000 to $200,000.

  2. Chinese car market overview. Citroen case study

    Yao also explains that the price of the cars is not going to decrease yet, and that the competition is therefore going to calm down. As the custom taxes are also being reduced, the price of cars brought in to the country will also be reduced; national companies will then

  1. Use game theory to analyze an oligopoly competition of two great rivals, Wal-Mart and ...

    Consequently, it boosts 2.5% of profitability by the cost reduction and time saving. In 1980s Wal-Mart started using EDI to contact suppliers in the US. This method operated smoothly in the rest of the world too, but at the moment China's business environment restricted Wal-Mart's effective information advantages.

  2. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    This could be because of the terrorist attacks in the USA in 2001 and the five interest rate rises between November 2003 to August 2004. While PBIT decreased in rate on 2004 it increased by 7.8% rate from 2001. This happened because of the huge increase in the net cash

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work