• 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

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.

Middle

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.

Conclusion

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. "If real world markets can be made to resemble more closely the model of ...

    Many people are afraid of the safety of using the Internet, whether or not their credit card details will be secure, and other, now fairly irrational fears. Many of these problems have now been resolved, with the introduction of security standards and systems with the purpose of keeping details safe, but some people are not prepared to take the risk.

  2. Assessment of the market economy system

    The firm will only think of what it owns-the profit, and it will think nothing of what he does not own-the river and the air, because self-interests determine his action in the market. Hence free market, in this situation, will fail in environmental protection.

  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 economy sets for soft landing in 2005.

    Zhou Yucheng, Chairman of the Board of Directors, China Worldbest Group, People's Republic of China, a Co-Chair of the China Business Summit 2004.These include the diversification of the ownership structure, the establishment of a responsible board and system of accountability, and focus on core competency. For his part, William G.

  1. Free essay

    different sectors of economy

    They build houses, hospitals, schools, colleges and universities. They have developed a reputation for reliability, personal service and innovative solutions and are very proud of the fact that 90% of their business comes from customers for whom they have previously worked.

  2. PEST and competitive analysis facing by confectionery organisations

    * Many people eat chocolate and sweets whilst "on the go". Therefore, it is good to market a new product that can be eaten "on the go". * Master foods employ a lot of skilled workers, with a lot of experience and knowledge.

  1. The structure of the airline industry.

    There is an inverse relationship between these two indices, as you can see from the chart below. During the recession of 2001, consumer confidence fell as unemployment rose. Unemployment is also related to capacity utilization, but inversely. During 2001, unemployment rose as capacity utilization fell.

  2. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    The establishment of the European Monetary System (EMS) in 1979 aimed at reducing exchange rate variability, the Single European Act in 1987 which lead to the creation of a free market in the movement of goods, services and capital by 1992, the Treaty of Rome in 1991 opening the way to an economic and monetary union, and finally

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