Eager for outsourcing, Russia battles image problem

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They ARE thinking long-term

Instability and uncertainty about the future are big factors in making investment decisions. Russia is not only viewed (correctly, IMHO) as somewhat politically unstable, but it is an unstable environment for business what with the government siezing industries, official corruption, and organized crime not only running rampant, but being protected by state officials.

No matter how great your ROI is projected to be, that means nothing if all your off-shore assets or partners suddenly get siezed by the government overnight. Additionally, the brains behind your outsourced firms may decide to leave the country on short notice, leaving you out in the cold.

When the rule of law is not upheld firmly and consistently, and when private property is not secure from government siezure or manipulation, investment and business in general are greatly discouraged. If Russia wants to have a bit of the success other countries are having, they need to get their government's act together.

Of course, if you ask me, some of this applies to China as well, but not all of it and not as much, which is why China is receiving more investment and business than Russia.

Posted by: Punchey   Posted on: 02/16/07 You are currently: a Guest | Members login | Terms of Use

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