Russia's new economic record

In 2003, the Russian economy received 29.7 billion dollars in foreign investment, or 50% more than in 2002, reports the State Statistics Committee, or Goskomstat.

How should this figure be understood? In absolute terms, it is not a lot. It is well below the foreign investment level in the Chinese economy in the crisis year of 2001 ($47 billion) when investments were few and far between and is barely comparable to the investments made abroad by China itself in 2003 - $35 billion. Moreover, it is below what has been invested in China or the US (they are the world's leaders in foreign inward investments) now. But the 50% leap is worth most serious consideration, including in Russia, where the dominant mood is one of pessimism. Now, in response to the good statistical news, one should expect many Russians to say, "yes, but ..." and remind us all of the country's continued emphasis on raw materials, the numerous remaining legal and other obstacles to the foreign investor in Russia, and other quite reasonable arguments. But the fact that nearly 40% of the 2003 investment went to industry is significant enough. This is a new stage of development, the first begins with the services sector and infrastructure. Growth of investment in the Russian economy allows one to make very optimistic forecasts.

In 10, or 20, or 40 years we will see a new class of world powers rising, which are now more conspicuous at the regional level, but have been world powers in the past. This is the assessment given in Davos by David Rotkopf, a Carnegie Foundation expert. And the record growth of foreign investment in Russia should be perceived in this context.

It is certainly food for thought. Will the new "driving forces of growth" undermine the economic domination of the present two world giants - the US and China - or help them? Will the new leaders compete or co-operate with each other? What needs to be done to prevent the leadership from aggravating the challenges of the new century and above all poverty in most of the world's countries? What philosophy will the new world powers bring to international relations?

Dmitry Kosyrev, RIAN

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