Russia, a New Market Economy

1
Russia, a New Market Economy?
Presentation at the 12th Annual
Conference on International Trade October 10,
2002 Four Seasons Hotel, Chicago Helen
Teplitskaia President American-Russian Chamber of
Commerce Industry
2
Russian Market Advantages

• Market size - 143.5 million people
• Growing economy (6.5 average annual growth
  during last three years)
• Abundance of natural resources
• Educated and inexpensive workforce
• Competition from local manufacturers and service
  providers is increasing, but in such sectors as
  consumer goods, automotive, industrial and
  telecom equipment, US and European firms still
  enjoy competitive advantage.

3
Russian Market Challenges

• Bureaucracy
• Rule of law
• Financial infrastructure
• Transparency
• Corruption
• Intellectual Property Rights
• Customs
• Certification
• Currency regulations
• Corporate Governance

4
Russias Accession to WTO Key Benefits for
International Investors and Traders

• WTO membership stimulates economic growth and
  inflow of investments (for example, in first half
  of 2002, 44 billion in new foreign investment
  entered China)
• Better market access
  (major impact on Agribusiness, Banking,
  Insurance,Telecom and IT sectors)
• Liberalization of trade
• Trade system based on rule of law
• Predictability and transparency

5
Russias Accession to WTO Benefits for
International Investors and Traders

• Simplification and unification of customs and
  tariffs
• Trade disputes handled constructively
• Need to comply with the WTO rules lessens impact
  of narrow interests lobbying groups, encourages
  good government.
• All of the above-mentioned benefits will result
  in dramatic improvement of the Russian market
  conditions and evolve into new business
  opportunities for global firms accustomed to
  Russian business culture.

6
Emerging Business Opportunities in Russia

• Financial Services
• Retail banking, Credit cards, Consumer Credit,
  Mortgages, Leasing
• Russian companies have begun to seek full foreign
  listings in New York, London and Frankfurt.
  Sharp rise in issue of corporate and municipal
  bonds. (Check out new OPIC instrument -
  expropriation coverage for the capital markets)
• Insurance
• Pension Funds

7
Export Opportunities

• Key areas for equipment exports
  Oil/gas, power, medical, agribusiness,
  construction, telecommunications equipment.
• Export-Import Bank provides financing to support
  exports of US capital equipment and services.
• Leasing is evolving as one of the most popular
  instruments for trade finance in Russia.

8
Contact Information

• Helen Teplitskaia, President
• American-Russian Chamber
• of Commerce Industry
• 1101 Pennsylvania Ave, NW, 6th Floor
• Washington, DC 20004
• Website arcci.org ht_at_arcci.org
• Tel [phone], Fax [phone]