Navigation Feedback September, 25 (Sun) 2005 Business start-up Import/export Customs duties Labour market ... Statistics Investments Russia as a whole is clearly under-performing in terms of both gross domestic private investment and foreign direct investment (FDI). Gross Domestic investment in the Russian Federation contracted during most of the 1990s, and has only recently started expanding again. For FDI, the Russian Federation received under 1 % percent of GDP from 1992 - 1998, compared with 3 - 4% or more in Poland and Romania, and even higher rates in many other countries in Central and Eastern Europe. Data on FDI inflows in each region are available from the State Statistics Committee. Among other regions, St. Petersburg has many natural attractions for foreign investment, so should be expected to attract a large amount. Novgorod, by contrast, has relatively few natural attractions, yet has managed to attract significant amounts of foreign investment by making the investment climate as business-friendly as possible. Leningrad has clearly benefited from "spillover" investment from businesses who want to enjoy the good features of St. Petersburg but to avoid the bureaucratic difficulties and higher taxes. Among domestic investors, the statistics show a greater number of "large and medium" firms than "small" firms in the statistical base in each of the regions participating in the study. In most countries, including most Transition countries, there is a distinct pyramid structure of firms: a few large firms, more medium-sized firms, and a much larger number of small firms, many of whom are new start-ups. These data indicate that Russia is under-performing in terms of encouragement of small business, which is a critical source of dynamism, growth and employment opportunities for a healthy, market economy. | |
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