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What sanctions? Foreign investment breaks record in Russia

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What sanctions? Foreign investment breaks record in Russia

In 2019, foreign investment in Russia increased by 70%, a significant number, especially for the country facing economic sanctions, says expert.

Report from the Russian Foreign Direct Investment Fund (RFPI) reveals a 70% increase in productive investments in Russia by foreign entrepreneurs in 2019.

For journalist Aleksandr Lesniy, the increase is a result of the positive relationship between profitability and risk that Russia offers to foreigners. Among RFPI-supervised projects alone, annual profitability for investors increased by 13%.

Interestingly, investments were not concentrated in the Russian capital, Moscow, as was the case in previous years.

"More than 90% of the investments were made outside Moscow and covered more than 80 regions of Russia," said Kirill Dmitriev, director of RFPI.

The origin of the investments is varied, with emphasis on the countries of the Middle East and Asia. Even so, European companies, which had stopped investing in Russia for political reasons, are gradually returning.

Investment Areas

The projects that attracted the most investments in 2019 are infrastructure, technology, health care and the environment.

Dutch technology giant Phillips has signed a contract with the government of the Tatarstan region to provide advanced medical diagnostic technologies.

"We are ready to make our contribution to the centralization of radiation diagnostics in Tatarstan and to the development of its medical infrastructure," said Phillips Russia director Maxim Kuznetsov.

Another example is the Russian surgical robot company AST, which in 2019 received the first tranche of foreign investment to develop high-tech surgical equipment.

Turkey's Presence

Following Turkish President Recep Tayyip Erdogan's visit to Russia in April 2019, a cooperation agreement was signed between the Turkish Ronesans Holding to build 15 medical complexes in Russian universities.

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                    Sputnik / Aleksei Filippov

Russian President Vladimir Putin receives his Turkish counterpart Recep Tayyip Erdogan in Moscow in April 2019

Turkish companies are among the largest investors in the Russian market. In February, the subsidiary of Turkish holding Renaissance Construction invested in the construction of four recycling and power generation plants on the outskirts of Moscow.

The facility is expected to receive about 2.8 million tons of waste per year, generating about 280 MW of electricity, enough energy to supply about 1 million Russian homes. The plants are expected to be operational between 2021 and 2022.

Expectations for 2020

For experts, Russian criminal law remains an obstacle to increased foreign investment in Russia.

Expectations for 2020 are high as Russian President Vladimir Putin must authorize amendments to liberalize foreign investment legislation in the country.

. (tagsToTranslate) foreign direct investment (t) Russian economy (t) economic sanctions against Russia

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