Investment Rating for Russia`s Regions, 2002-2003

By Grigory Marchenko and Olga Machulskaya

Adding up Regional Strategies
Russia will never accomplish the national task of doubling the GDP unless similar ambitious goals are also set at the regional level. Today, less than a forth of Russia’s regions are ready for such a task.

Data and methods

The Investment Rating Results
The investment climate in Russia is stabilizing. The number of marginalized regions is declining and the number of “middle-class” regions is growing. The difference between Moscow and St. Petersburg and outlying suburbs is shrinking Only smaller regions, the autonomous ethnic federation subjects, are exceptions to these general positive trends.

Investors, Politicians, and Bureaucrats
Officials make all the difference, especially when it comes to investment climate. However, the opposite is also true: the electorate’s mood depends heavily on the conditions the region has created for investors.

The Wave Effect
Investment climate is not only defined by local authorities. It is also defined by neighboring regions. The Russian investment climate gets increasingly worse as one moves east and south. The waves of economic development expand in concentric rings from Russia’s investment core.

Investment Climate, Strategy, and Regional Administrative Efficiency
Here are some of the views of several participants in the conference held in October 2003 in Moscow, Russia’s Regions: from Survival to Prosperity. New approaches to improving investment climate and increasing economic growth.

Map 1Investment Rating of the Regions of Russia, 2002-2003
Map 2Changes in the Potential and Risk Indices in 1997/98 - 2002/03
Map 3 The Effectiveness of the Governing Bodies in Attracting Investments into regions

Table 1.Basic Parameters of Investment Development in Russia
Table 2.Russian Regions Divided by Investment Climate Rating, 2002-2003
Table 3.Investment Risk in Russian Regions, 2002-2003
Table 4.The Most Dynamic Regions in Terms of Change in Investment Risk
Table 5.Regions with the Least Total Investment Risk
Table 6.Investment Potential of Russian Regions, 2002-2003
Table 7.The Most Dynamic Regions in Terms of Change in Investment Potential
Table 8.Regions with the most and least efficient administrations
Table 9.Federal districts: changes in regions' economic climates, 1997-2002