Dollars bring jobs in foreign cash bonanza

Russia rose through the ranks of European countries where foreign direct investment produced the most jobs and facilities last year, edging up two rungs 
to fifth place.

“Russia is climbing the league table,” Ernst & Young’s annual European Attractiveness Survey. “Investors appear to favour Russia’s industrial sector, which creates products for the rapidly expanding Russian middle class.” Britain preserved its top spot, followed by France, Germany and Spain.

The survey appeared to count investment projects capitalising on Russia’s swelling oil wealth that continued despite the economic slowdown that struck in the second half of 2008.

Ernst & Young tracked 170 foreign investment projects in Russia resulting in new jobs and facilities last year, up from 143 the year before, the report said. In an effort to present an accurate picture, the figure excludes portfolio investments, mergers and acquisitions.

Despite leading the way, Britain attracted slightly fewer investment projects last year than it did in 2008, with the number falling to 678 from 686, the survey said. Spain also suffered a decline.

Of the 20 countries surveyed, Germany showed the biggest increase, boasting 418 cases of foreign expansion, 28 more than the previous year, slightly edging out Russia.

Most attractive regions for FDI (pc)

Total respondents: 814. Respondents selected three possible answers

Mikhail An, in charge of investment climate at the Economic Development Ministry, told the Moscow Times Russia offered a stable economic outlook, “Plants continue to open,” he said, referring to the unveiling of Kimberly-Clark’s $113m personal care products unit. “Giant plants are beginning to draw their suppliers into the country.”

Japanese truck maker Komatsu recently held a ceremony to inaugurate a plant in Yaroslavl, while, earlier this year, PSA Peugeot Citro ë n and Mitsubishi launched a $419m car assembly plant in Kaluga,

The latest survey mentioned an “automotive manufacturing facility that created 3,000 new jobs”, in an apparent reference to the Kaluga plant. Work on the facility began in June 2008, and it was officially opened in April of this year.

However, although having increased in number, foreign projects did not improve the perception of Russia by the foreign business community, the survey showed. Of 814 executives polled, 14pc named Russia as one of the world’s three strongest investment magnets, against 16pc the year before.

Russia remained the sixth most attractive target globally for investors; China bagged the first prize, with 39pc of the vote. North America and India also ranked higher than Russia, which outdid only Brazil in the list of the top seven regions in terms of image, investor confidence and most competitive benefits for foreign direct investment.

Previously published in The Moscow Times

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