Rating Figures

In recent years, investment climate was dominated by centripetal trends; there was considerable growth in numbers of "middling" entities characterized by low potential and moderate risk

We consider every Russian region in the risk - potential coordinates, to which investors are accustomed. Chart 2 is a vivid demonstration of the diversity of Russian conditions: regions' parameters may differ several times or even orders of magnitude. Perhaps practically any investor will have no difficulty in selecting a region with an acceptable risk and ready to receive a business of a suitable scale. During the last year, the investment ratings of regions stabilized. There were far fewer shifts than in the past.

Main changes occurred in the sphere of investment risk (see Graph 2).

Nine areas improved their ratings thanks to a decrease in risk. Belgorod region reestablished its status of a minimum risk region, shifting from category 2B to 2A. Other areas improved their ratings:

• Smolensk, Orenburg, Omsk, and Chita regions (a shift from category 3C1 to 3B1);
• Republic of North Ossetia - Alania and Sakhalin region (a shift from category 3C2 to 3B2);
• Chukot autonomous district (a shift from category 3D to 3C2).

Only three regions worsened their ratings because of higher risks: Khabarovsk territory (a shift from category 3B1 to 3C1), the Ust-Orda Buryat autonomous district (a shift from 3B2 to 3C2) and the Taimyr autonomous district (a shift from 3C2 to 3D).

Among 89 Russian regions, only Astrakhan region moved up, from 3B2 to 3B1, thanks to its investment potential.

Krasnodar territory is, as usual, "shaking with fever": it changes its investment rating almost annually and sharply "cornerwise." This time, the region once again decreased its risk but simultaneously also its potential, shifting from 1C to 2B.

The absence of regions to markedly increase their investment potential is a reflection of a certain stagnation in the development of potential growth points. The bulk (over 70%) of growth in the nation's potential was accounted for by economic core regions: Moscow city and Moscow region (27%, and if their immediate surroundings, Kaluga, Ryazan, Smolensk, and Tver regions, are added in, nearly 34% of the total increment in potential), the Khanty-Mansi and Yamalo-Nenets autonomous districts (17%), St. Petersburg with Leningrad region (8.5%), Nizhni Novgorod (8%) and Tatarstan (5%).

Unfortunately, neither Bashkortostan nor Samara nor Sverdlovsk nor Perm regions nor other potentially leading regions, which were supposed to "pull out" our economy (group 2B in Graph 2 and Table 1) were unable to scale up their investment potential.

The most significant outcome of the changed rating of separate regions during the last year was growth in numbers (from 24 to 30) of regions in the most populous category, 3B1, and simultaneous contraction (from 15 to 10) of regional representation in 3C2 (see Graph 3).

Map 1. Investment risk and potential of Russian regions 2000-2001