FDI has the effect of introducing
markets to new technologies and improved management systems.[1] This
will allow Russia’s inefficient and outdated sectors to become productive and
compete on the international market, allowing the country to profit from
increased export revenue.[2] The
Government has recognized the need for diversification and modernization but
change and reforms have been slow to develop.[3] In
addition to export revenues, increased output will provide the government with more
tax receipts, which in theory they will direct into social projects, designed
to benefit the public.[4]
Russia has begun to realize the advantages of increased in encouraging FDI and
has seen a positive impact from investment in its automotive and aerospace
industries.[5]
This has provided those industries with the skills, managerial experience and
technology to begin to compete on the international level.[6]
Dispiute the level of China’s investment other income will be necessary to
further propel growth.
Many
consider corruption to be Russia’s preeminent issue and while the government
has made efforts to combat the issue progress has been limited. According to Transparency International’s Corruption
Perception Index (CPI), Russia ranks 133 out of 182 in the 2012 CPI
ranking, placing the nation as the most corrupt of all the BRIC’S,[7]
and reports suggest that the average bribe is about $7,866.[8]
This has led to discouragement among those who attempt to battle the plague,
fifty-two percent of individuals’ surveyed feel that the government’s efforts
to combat corruption are largely ineffective.[9] Moreover,
the WEF has ranked given Russia a poor ranking for judicial independence (116)
protection of property rights (121) and efficiency and settling disputes (109).[10]. Although Russia is a member of the Council of
Europe Group of States against Corruption (GRECO), the country has only
fulfilled one-third of its anti-corruption obligations.[11]
Perhaps
unsurprisingly, Ukraine has also begun to receive significant investment from
China. Just as Russia fuels the Asian giant, Ukraine feeds it.[12]
In recent years, Ukraine has been attracting investment from Chinese companies seeking
to meet their growing demands for grains and meat. This recent development is
particularly relevant in light of Ukraine’s decision to reject an EU
partnership agreement. Viktor Yanukovich cited Russian pressure as the basis
for his decision. While his decision has met vehement protests in Kiev, it may
simply be too soon for the Ukraine to move away from its Russian connection.[13]
What would allow Ukraine to move away from its eastern partner will be the
development of its own economy and creating alternative trading routes. China’s
interest in the region would satisfy both of those needs.
[1]. John W. Head, Global Business Law, 450 (North Carolina
Academic Press, 3rd ed. 2012).
[2]. European Bank
for Reconstruction & Dev., Strategy
For the Russian Federation, 2 (2012), available
at http://www.ebrd.com/downloads/country/strategy/russia.pdf [hereinafter
EBRD].
[3]. Id., at 7.
[4]. See Head, supra note 1, at 450.
[5]. Industry in Russia: Lurching Into the Fast Lane, Economist,
Jul. 14, 2012 [herein after Industry in Russia].
[6]. Id.
[7]. See Transparency International, Corruption Perceptions Index 2012 Results,
(2012), available at
http://cpi.transparency.org/cpi2011/results/#CountryResults.
[8]. Average Bribe Amount in Russia more than
Tripled Last Year, Rus Legal Info. Agency,
January 27, 2012, available at
http://rapsinews.com/anticorruption_news /20120127/259820426.html.
[9]. Transparency
International, Global Corruption
Barometer 2012, Appendix C,Table 1, (2012), available at http://www.transparency.org/policy_research/surveys_indic
es/gcb/2010/results.
[10]. Id.
[11]. Council of
Europe - Group of States Against Corruption(GRECO), Compliance Report on the Russian Federation, Dec. 3, 2010.
[12]. Roman
Olearchyk, China Looks to Ukraine as Demand for Food Rises, Fin. Times, (Nov.
5, 2013), available at http://www.ft.com/intl/cms/s/0/a9c0db18-4554-11e3-b98b-00144feabdc0.html#axzz2mHetckLt.
[13]. Mary Dejevsky,
The Setback with Ukraine Will Teach Brussels to be Patient, Fin. Times (Dec. 1,
2013) available at http://www.ft.com/intl/cms/s/0/383da05a-5aaf-11e3-942a-00144feabdc0.html#axzz2mHetckLt.
No comments:
Post a Comment