Russian Elections
The recent elections in Russia have brought new attention to Vladimir Putin and his political goals. As Chris noted in his post a few weeks ago, Putin “has managed to bring Russia back into the pantheon of important powers while running roughshod over its budding democratic process and otherwise acting like a mean-spirited bully.”
The international press has been quick to point out deficits in the Russian election process and inherent conflicts between the West and Russia on the global political stage, but personally I have been missing coverage of Russia from a business aspect and the influence that a growing market economy will have on the future direction of Russia.
Russia, like China, is a rapidly growing economy with many characteristics of a market economy and few characteristics of a democracy. Russia’s GDP has grown 600 percent in the last 8 years and is now at USD 1.3 trillion. (Herald Tribune, March 4, 2008) Sure, rising energy prices account for some of this growth, but oil and gas make up only 20 percent of Russia’s GDP.
Markets for many products have been rapidly growing in Russia. Household incomes have been steadily rising in the past years, contributing to increased consumer demand for all kinds of goods. The market potential, similar to China and India, is immense. Already, Russia is the largest European market for 8 Asian car brands, including Toyota, Nissan, Kia and Subaru and experts anticipate that Russia will account for 30-35% of the total European automotive market in 2 or 3 years. (Automotive News)
Where does your company do more business today? In Russia, China or India? Which country do you see gaining more importance to your business in the next few years?
Image from www.state.gov.
Tags: automotive market, consumer demand, GDP, Putin, russiaRelated Stories
POSTED IN: News
2 opinions for Russian Elections
A.T.
Mar 12, 2008 at 7:05 am
I don’t know whether you followed BBC’s podcasting on topic, but… recently one of their external experts on Russia topic said very true thing - what you see in Russia is only looks like democracy, but deep in shell it is very far from any democracy at all. Same thing can be said about their market-only-on-surface economy - they mix very well aggressive foreign policy with big business pressuring out foreigners on any significant market. I am not in position to teach you or gather market/business information, but I recommend to look around - you will see how they kick Finns out of their timber/wood-processing segment, steaming out oil industry (numerous examples), and examples are so numerous and widespread that it is difficult to stop. But without knowledge of Russian you might have some troubles to find those yourself…
Jean Mercedes
Mar 15, 2008 at 6:27 am
Yes, Russian business practices have been well documented. Doing business there is certainly not for the weak of heart. Nonetheless, it is a rapidly growing market and sales of many consumer goods are skyrocketing.
Have an opinion? Leave a comment: