Russian economic reforms put in place by Vladimir Putin over the course of his presidency have won praise at the seventh annual Investing in Russia forum hosted by Sachs Associates and Bloomberg in New York last week.
"There is a sense of Russia truly coming of age," former US. Ambassador James Collins explained, according to the Moscow Times, adding: "They've always known how to improve the economy, but the political environment hasn't been conducive. With Putin, this missing ingredient is finally in place."
Given that the world economy is struggling to maintain economic growth at the moment, Russia has triumphed as one of the world's leading emerging market-places. Last year it was one of only two nations with a budget surplus, and since 2000, foreign debt has fallen 20% in relation to GDP. Income per capita has risen 10% and the Central Bank can boast reserves of $50 billion. This has prompted large multinationals such as General Motors, Caterpillar and Frito Lay to open operations in Russia. Firms such as Nike, Dow Chemical and Wal-Mart are also said to be considering large scale investments.
Fears seem to be dispelling over Russia's over -reliance on its abundance of oil. While this sector is still critically important to Russia's economic well being, it is claimed that only one-seventh of total foreign investment in Russia was destined for the oil industry. Considerable growth in consumer goods sales, construction and engineering also pointed to a more diversified economy according to Charles Ryan, CEO of United Financial Group. Another sign of faith in the future stability of the Russian economy is the flow of native money back into the country from offshore and foreign financial centres.
In the tax sphere, recent reforms have been aimed at boosting business activity and encouraging entrepreneurial activity. The recent abolition of the somewhat repressive tax police is one such example. Also, the Cabinet are currently debating a package of tax reform measures which are being aimed at the statute book for 2004.
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