Question

Discuss the pros and cons of investing in Russia. As a CEO of a company in the oil industry would you invest in Russia? How does a stable government affect a country’s ability to attract investment?

Answer 1

Russia is the largest nation in the world. It’s captive market of over nearly 140 million people incomes are increasing steadily. Moreover a strong educational system has a good image in production of a workforce with high skills and discerning consumers. The cons are that the business procedures and policies of country often change, thus the company need to stay up to date to ensure that it is not violating any laws. Moreover the corruption is very high with overcharged registrations, licenses, and inspections; unavoidable bribery; payoffs to organized crime; and questionable environmental, safety, and customs violations which can be claimed. Oil and gas play a broad part in the country's economy in regard to production for internal usages and exports. However if am CEO of a company in the oil industry, I would not be prefer for making investments in Russia because of corruption and the potential of losing the business all together due to the government total control of the nation. Also the two largest oil companies in the country are owned by the government. The government of Russia has a record of making pressure on foreign energy companies for consolidating the control over the Russia's largest and most vital hydrocarbon deposits.