Direct Investment from Russia Abroad: Changes since 2018

Abstract

The article considers the specifics of Russian foreign direct investment outflows in 2018–the first half of 2020. Three main reasons for the new stagnation of Russian foreign investment expansion are identified: 1) the strengthening of “sanctions war” with the West after the election of Vladimir Putin for the 4th presidential term; 2) the slowdown in the global economy in 2018–2019 against the background of relatively low prices for hydrocarbons and other raw materials exported from Russia; and 3) the crisis caused by the coronavirus pandemic in 2020. These factors resulted in a reduction of both outward foreign direct investment stocks by Russian MNEs (partially due to revaluation of their assets after the collapse of the ruble rate), and a decrease in investments of wealthy Russians in foreign real estate as well as pseudo-foreign investment because of the regular attempts to conduct de-offshorization. Based on a study conducted at INION within the framework of the international program for studying MNEs from emerging markets, a list of leading Russian non-financial MNEs by the end of 2019 is presented. Further prospects of Russian direct investment are shown at the end of the article.

FDI in the Post-Soviet Space Three Decades after the Disintegration of the Soviet Union

“…In the Russian Federation, a large network of researchers has also produced major studies on inward and outward FDI in the country -and also some other post-Soviet economies In the monitoring work, a leading role was played by Alexey Kuznetsov In these studies, in the majority co-authored by various researchers, the focus was on mutual investment among the countries of the Commonwealth of Independent States [Kuznetsov, 2013;Kuznetsov et al, 2012;Kuznetsov et al, 2013;Kuznetsov, (1) 2014;Kuznetsov, (2) 2014] and in the EAEU This monitoring prompted studies on the role of FDI in Eurasian integration [Kuznetsov, 2016] and relations with the European Union [Kuznetsov,(2) 2010] Studies dealt with both inward FDI (cf [Kuznetsov, (1) 2010;Kuznetsov, 2012]) but more often with outward FDI [Bulatov, 1998;Bulatov, 2017;Kuznetsov, 2009;Kuznetsov, 2011;Kuznetsov, 2021] In addition, multi-authored monographies analysed various aspects of capital exports form the Russian Federation [Bulatov et al, 2015;Bulatov et al, 2019] In St Petersburg, research focused on Russian outward FDI, corporate strategies and policy issues Andrei Panibratov played a leading role in preparing monographies (eg, [Panibratov, 2012]), articles on home country and State influences [Panibratov, 2016;Panibratov et al, 2015;Panibratov, Michailova, 2019] and the internationalization strategies of Russian multinationals [Kalotay, Panibratov, 2013;Dikova et al, 2019] From a global perspective, the Division on Investment and Enterprise of the United Nations Conference on Trade and Development (UNCTAD) and its predecessors 7 have been the focal points for the analysis of FDI in the whole UN system and for more than four decades It started its in-depth research on economies in transition in the early 1990s (see [United Nations, 1992]) It has been in close cooperation with the other centres, catalysing their research, and also providing the global context to the analysis of those centres It has provided its analysis in the World Investment Report series since 1991, and its staff also participated in the international debate on post-Soviet FDI 8 Its academic journal, Transnational Corporations, published articles by researchers from the international centres…”

Russian Direct Investment in Countries of Latin America

“…At the same time, Russian direct investments abroad, despite the difficulties of the Western sanctions pressure that has been growing since 2014, have not disappeared anywhere. Of course, one can speak of a certain stagnation in the dynamics of Russian FDI, especially in the years 2018-2020 [Kuznetsov, 2021]. At the same time, some leading Russian MNEs began to gradually turn to the global South in search of new opportunities for economically profitable foreign expansion.…”