Russia Presentation

Submitted by Sun Jin

Russian billionaire to invest $1 bn in development projects

MOSCOW: Open Investment (OPIN) development group, owned by billionaire presidential candidate Mikhail Prokhorov, will invest about $1 billion in several development projects in Russia in the next few years. 

According to an OPIN statement, the group intends to build three multi-apartment residential compounds of elite, business and economy categories with a total floorspace of over 600,000 square metres. 

It also has plans to build three cottage communities in an area of over 500 hectares and two large shopping malls with over 40,000 square metres.

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Russia: Inflation at only 0.5 percent in January

The trend to a lower inflation continues in Russia. Inflation was only 0.5 percent in January 2012. In the same month last year, the average was at 2.4 percent. The federal statistics service Rosstat informed about that in a statement on Monday.  

Food prices increased by 0.8 percent on average, while prices for non-food products rose by 0.4 percent. Services cost 0.2 percent more than in December. 

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PayPal to team up with Russian Post

Global electronic payment system PayPal plans to extend its services in Russia by teaming up with the county’s state-run postal operator to provide prepaid cards for the system’s electronic accounts. 

PayPal views Russian Post as a “strategic partner” thanks to its extensive network of branches across the country and its ability to identify clients, PayPal Vice President Lauren Le Mole told the Kommersant daily in an article published Monday.

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Russia raises $7 billion in eurobonds

Russia raised $7 billion in eurobond offering Wednesday that drew strong demand from investors due to increased market confidence and a strong oil price.

The placement, Russia’s first international offering in two years, was the largest emerging market sovereign offering since 2000.

The government placed $3 billion in 30-year bonds, $2 billion 10-year bonds and $2 billion in five-year bonds, fully covering its foreign borrowing plan for 2012.

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Sources Say McDonald's Russia Will Now Franchise

McDonald's is looking for Russian business partners for the first time in its 20-year presence in the country, as it hopes to expand into Siberia, RBK reported Tuesday. 

The fast-food giant intends to open restaurants in Novosibirsk, Tomsk and Barnaul, using the franchise business model that is the basis for 80 percent of its restaurants worldwide but has not been used in Russia yet, according to RBK. 

The move was taken in part due to the expansion of Burger King and Wendy's, who work with franchisees, two unidentified Moscow restaurateurs told RBK.

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World Bank Finds Economic Comeback Weak

Russia's recovery from the 2008 crisis is weak relative to its international peers and slower than after the financial crash of 1998, the World Bank said Wednesday as it lowered its 2012 growth forecast. 

There are 20 percentage points between projections on the eve of the 2008 crisis for Russia's gross domestic product in 2012 and today's reality — compared to 7 percentage points for high-income OSCE countries and 15 points for developing European Union economies, according to the World Bank's latest Russian Economic Report. 

After the 1998 financial shock, the country's GDP took seven quarters to recover to its former levels, the World Bank said. After 2008's contraction, it took 14 quarters. And although growth was 4.3 percent last year, it has not come close to pre-2008 highs of above 7 percent.

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Is it Time for Investors to Show Russia Some Love?

Politics dominate now, but long-term draws include middle-class and infrastructure growth 

Russia's rising middle class is a great investing story. But does that mean U.S. investors can safely play a role in this plot anytime soon? 

Reports of widespread corruption and political infighting have long been good reasons for U.S. investors to tread carefully when it comes to throwing money Russia's way. Volatility is also tied to a strong reliance on commodity revenues -- as gas and oil go, so goes Russia.

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Russian LDP leader urges greater cooperation with Taiwan

Moscow, March 21 (CNA) Vladimir Zhirinovsky, leader of the opposition Liberal Democratic Party of Russia (LDPR), called Wednesday for closer cooperation and exchanges between Taiwan and Russia.  

During an interview in Moscow with CNA, Zhirinovsky said he looks forward to long-term bilateral collaboration on various fronts such as sports, politics, and economics, through the establishment of bilateral associations in a variety of fields.  

Turning to U.S. influence in the region, Zhirinovsky also warned that although the U.S. might seem on the surface to support Taiwan, its real motive is to maximize its own economic interests.

Link (submitted by Anna)

Agricultural Levies to Be Harmonized

After joining the World Trade Organization, Russia will have to start taxing some agricultural products that are now exempt, a top government official said Thursday. 

The government encourages cultivation of several types of produce by waiving value-added tax. Maxim Medvedkov, chief of trade negotiations at the Economic Development Ministry, said the tax will have to be levied on these products so Russia doesn't discriminate against imports. 

For example, "if VAT for our carrots is zero, it should be zero for the imports," he said.

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Russia to make it into Top 5 of world economies

Russia will soon become one of the world’s top five economies, Prime Minister Vladimir Putin said at the Russia 2012 Forum. 

Russia finished off 2011 with a good economic outcome, showing off a 4% GDP growth and a record low inflation rate (6.1%), compared to the past two decades. 

Most independent experts have placed Russia into top five of economies with a high potential for direct foreign investments.

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Q&A: Following Instinct From Amsterdam to Moscow

"'By the time I get a chance to think about my decisions, I've already made them in my gut,' Jan-Wilm Rovers said, crossing under the inflatable Father Frost that sits above the door to his office — one of 25,000 products sold by Koopman International RUS, the trading company where Rovers is chief executive. 

Rovers' willingness to rely on instinct, rather than conventional wisdom — which says Russia is too dangerous and unpredictable for foreign investors — has allowed him to identify and seize opportunities in the former Soviet Union since shortly after the Berlin Wall fell."

Link (submitted by Sun Jin)