By: Phil Butler
Abstract: pravdareport.com: How Russia wins economically
Foreign Investment Re-Direct
The energy sector is only one facet of positive momentum for Russia developing better and faster due to this strange economic situation. Sanctions imposed by the West were partly intended to reduce the amount of outside investment Russian projects needed. But investments are flowing into Russia from the China sponsored AIIB financial institution, and dozens of other outside sources, and even American conglomerates. General Electric, for one, just voiced a commitment, signing a series of agreements with its Russian strategic partners. The list of multi-nationals still pouring money into Russia is as long as the proverbial arm. Moving from energy into high-tech, a Russian-Indian high technology private equity fund announced in January illustrates what I mean by Russia/Putin filling in the void. In news from last month, RUSNANO and the National Investment and Infrastructure Fund (NIIF) will invest $2 billion in equal shares in dual-use technologies and defense industry products. So as any observer can easily see, sanctions warfare has created a void, and a stimulus for new business with Russia.
In other trade news, earlier this month it was announced Iran and Russia having signed mutual trade agreements worth $40 billion. Announced back in January, a memorandum of understanding in between the Ministry for Development of Far East of the Russian Federation and National Development and Reform Commission of the People’s Republic of China tells of $10 billion earmarked for agricultural development and cooperation. Also, Russia infrastructure and logistics has always been hampered by the sheer size of the country, but there is a hidden silver lining to this as well. I was just reading about an upcoming E-Commerce conference jointly set up by East-West Digital and E-Commerce Solutions coming in March. The key meetup brought to mind a recent study, “Russia B2C E-Commerce Market 2015” by yStats that tells of the huge potential for growth in Russian E-Commerce. The gist of this report is shows Russia as one of the largest B2C E-Commerce markets in the world, and with nowhere near 100% Internet penetration. Now, factoring in the scope of transportation logistics alone, any potential “Amazon-like” entrepreneur can see the distribution bonanza sitting in Russia waiting. Furthermore, imagine the manufacturing potential localized, for supplying products locally and regionally. Efficiency wise, Russia does not have to go through the metamorphosis the United States did, in order to ramp up to drop shipping etc. The need for superhighways to support container cargoes nation wise in Russia, it will be non-existent. The bottom line is, Russia in the new century can easily innovate like America did after the industrial revolution, only more sustainably. Of course this is theory, but the initiatives are underway.
For a full publication, please visit: http://www.pravdareport.com/opinion/columnists/16-02-2016/133345-russia_wins_economically-0/