Foreign Investors See Stormy Clouds over Russia’s Economy: Survey

The number of foreign investors in Russia’s economy who believe that business climate in Russia has worsened has more than doubled last year compared with 2017, from 22% to 50%, a latest survey reveals, according to business newspaper Kommersant.

The survey was carried out jointly by the Russian Union of Industrialists and Entrepreneurs and PR & marketing agency FleishmanHillard Vanguard. The number of foreign investors, who are upbeat on Russia’s entrepreneur climate, declined from 33% to 10%. The share of those, who did not see any changes, is almost the same (40% in 2018 and 45% a year ago).

The poll questioned more than a hundred Fortune 500 companies ahead of the opening of the Russian Business Week organized by the Russian Union of Industrialists and Entrepreneurs.

The survey indicates that international investors views on the business climate in Russia are back at the 2016 benchmark of 53%. Since 2012, when the poll was launched, the worst business climate figures were seen in 2014, when 82% of foreign investors saw a downturn. However, in 2016 and especially in 2017, the outlook nearly rebounded to that of 2013.

“What we are seeing now is most likely an adjustment of these exaggerated expectations of 2017 rather than a new trend. The recent results are still significantly better than in 2014,” Director General of FleishmanHillard Vanguard Elena Fadeyeva told the paper.

Alexander Shokhin, who heads the Russian Union of Industrialists and Entrepreneurs, also notes that the great expectations of 2017 were not delivered on last year.

“In 2018, foreign businesses adopted a wait-and-see attitude despite the lack of any important changes,” Shokhin said.

Among the top problems hindering business in Russia, foreign investors pointed to corruption among the authorities (60%). Meanwhile, the number of investors who complained about the lack of skilled personnel declined from 67% in 2017 to 40% last year.