Foreign direct investment in Russia is the money or resources invested into the economy of the Russian Federation by foreign companies or individuals with the prospects of a positive monetary return. Foreign direct investment (FDI) substantially increased after the collapse of the Soviet Union in 1991 after Russia began increasingly liberalizing its economy and expanding its capacity in the international marketplace. Previously tight state controls inhibited foreign investors however a series of wide-ranging fiscal and economic reforms initiated by Boris Yeltsin opened the economy to the world and began Russia's transition to a market-based economy. Foreign capital makes up a substantial portion of Russia's economic capital. In 2007, Russia was one of the largest recipients of FDI in the world, with an inflow of $52.5 billion.[1] However in recent years, sanctions by the United States and the European Union have had a noted impact on FDI.[2]
FDI in the aftermath of the USSR's collapse has played a pivotal role in shaping modern Russian politics and the view many Russians have of the international community and capitalism in general. In the 1990s, the windfall of foreign capital into Russia, formerly a centrally planned economy, had a profound effect on the country. Wage inequality nearly doubled in Russia from 1991-1994, underemployment became rampant during the decade, and foreign investment is seen as a key contributor to the rise of the oligarchs.[3][4]
History
editBy the time of the culmination of the Soviet Union's dissolution in 1991, Russia had seen some meager foreign investment into its economy. In 1989, Russia had been the source of $453.8 million of FDI, a number that declined to $233.5 million in 1991.[5] However by 1992, under the administration of Boris Yeltsin, Russia began to economically liberalize
References
edit- ^ OECD (20 August 2008). OECD Investment Policy Reviews OECD Investment Policy Reviews: Russian Federation 2008 Strengthening the Policy Framework for Investment: Strengthening the Policy Framework for Investment. OECD Publishing. pp. 14–. ISBN 978-92-64-04598-9.
- ^ Petroff, Alanna (2018-01-22). "Russia faces 6 more years of stagnation under Putin". CNNMoney. Retrieved 2018-03-06.
- ^ Brainerd, Elizabeth (2010-01-01). "Winners and Losers in Russia's Economic Transition". Search eLibrary. Retrieved 2018-03-06.
- ^ Meltdown: Money, Debt and the Wealth of Nations, Volume 5. COMER Publications. pp. 276–. ISBN 978-0-9680681-6-8.
- ^ Keith Crane (1 January 1992). Foreign Direct Investment in the States of the Former USSR. World Bank Publications. pp. 107–. ISBN 978-0-8213-2269-7.