Russia and foreign investment
Despite a downturn in the global economy, Russia remains among the top
ten economies in the world. And Russia has recently been the focus of a
lot of foreign investment. In 2008, foreign investment totaled $103.8
billion. In fact, Russia received the fourth largest amount of FDI
(foreign direct investment) in 2007. China received the most, then
India, and after that the United States. And when you do the math based
on per capita investment, Russia beat out every other country. Russia
attracted $369 for each of its 141 million people, more than twice the
amount that Brazil attracted per person, and six times the amount that
China attracted per person.
Russia has an undeniable appeal for global investors, despite the fact that many investors perceive the Russian goverment as being both unpredictable and corrupt. As of 2008, there are close to 110 billionaires in Russia. Russia has the second highest number of billionaires of any country in the world, with just a handful less than there are in the United States.
With so much wealth being funneled into Russia, many of these millionaires and billionaries are now investing in foreign companies. For instance, Russian energy and mining companies have begun to buy out foreign refineries and processing plants. The Russian owner of the company Rusal, the world’s leading producer of aluminum, recently purchased majority stakes in companies such as General Motors, Magna International, and the Canadian auto parts group.
Russian President Dmitry Medvedev has encouraged Russian businessmen to invest in foreign companies, which is sure to boost Russia’s standing overseas. Many wealthy Russians who have already acquired a taste for luxury cars, branded clothing and race horses are now also delving into the U.S. real estate market. For instance, the billionaire Dmitry Rybolovlev, owner of a Russian fertilizer company, recently purchased Donald Trump’s beachfront mansion in Palm Beach, Florida for $95 million. This purchase was the most expensive residential sale recorded in U.S. real estate history.
So, we can expect Russia to continue to become a major player on the world scene in the coming years as investments going both ways continue to develop both the U.S. and Russian economies.