Proposed new FTA between New Zealand and Russia

I hope that our negotiators are aware of the following information in their work to get this FTA developed and signed:

Russia’s Doing Business Rating Falls Seven Points

Nov. 9 – Russia ranked only 123rd this year in an international rating of improving entrepreneurial conditions by country. The report was compiled by the World Bank and the International Finance Corporation under the title, “Doing Business 2011: Making a Difference for Entrepreneurs.” The research involved 183 countries.

Compared to last year, Russia’s rating has fallen seven points. From the CIS, Russia is topped by Kazakhstan ranked 59th, which took top honors for the most-improved business environment in 2009-10, Belarus ranked 68th.

The top 10 leading reformers were Singapore, Hong Kong, New Zealand, the United Kingdom, the United States, Canada, Denmark, Norway, Ireland and Australia.

During the investigation period from June 2009 to June 2010, only two reforms were settled in Russia. The regulator eased construction permitting by implementing a one-stop shop for all procedures related to land use and introduced a series of legislative measures to improve creditor rights and the insolvency system.

At the same time, the construction permitting procedure is still one of the weakest points of doing business in Russia. The country ranks 182nd in that category.

Russian businessmen are spending 41.4 percent of their income on getting electricity, while in other countries businessmen spend an average of 6.8 percent of their income.

“To come to a building site in Moscow, a developer has to collect about 50 different signatures,” Anton Danilov-Danilyan from Delovaya Rosiiya criticizes.

It takes 30 days and demands nine different conciliatory procedures to start a business in Russia. By comparison, it takes just six procedures and 16 days to set up a business in Eastern Europe and Central Asia.

Russia did however receive appreciation for judicial maintenance of contracts execution and occupied 18th place in the annual survey. The cases are considered in 281 days (1.8 times faster than in OECD member-countries), and costs 13.4 percent from the claim price (19.2 percent).

“Probably, doing business in Russia is easier that is appears from the World Bank report, but on such ratings foreign investors size up the country, ” Igor Nikolays from FBK said, but “it does not matter what we think of our achievements. The matter is how we are estimated by others.”

This entry was posted on Tuesday, November 9th, 2010 at 6:23 am   Russia Briefing