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Most foreign investors didn't freeze their plans for Russia last year, the Economic Development Ministry's Mikhail An said. “Plants continue to open,” he said.
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, a survey said Wednesday.
At the same time, fewer executives polled in January and February said they saw the country as an investment haven, according to the global survey by consultants Ernst & Young.
“Russia is climbing the league table,” the annual European Attractiveness Survey said. “Investors appear to favor Russia’s industrial sector, which creates products for the rapidly expanding Russian middle class.”
Britain preserved its top spot in the ranking, followed by France, Germany and Spain.
The survey appeared to count investment projects that got under way to capitalize on Russia's swelling oil wealth and that continued despite the economic slowdown that hit the country in the second half of 2008 and much of last year. Ernst & Young tracked 170 foreign investment projects in Russia resulting in new jobs and facilities last year, up from 143 in the year before, the report said.
In an effort to present an accurate picture, the figure excludes portfolio investments, mergers and acquisitions, it said.
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, or 28 more than the previous year, slightly edging out Russia.
Most foreign investors didn't freeze their plans for Russia, because it offered a stable economic outlook, Mikhail An, who is in charge of investment climate at the Economic Development Ministry, told The Moscow Times.
“Plants continue to open,” he said, referring, among other things, to Wednesday's opening of a $170 million Kimberly-Clark unit to produce personal care products. “Giant plants are beginning to draw their suppliers into the country.”
Also on Wednesday, Japan's truck maker Komatsu held a ceremony to inaugurate a plant in Yaroslavl.
Earlier this year, PSA Peugeot Citroen and Mitsubishi launched a $630 million car assembly plant in Kaluga, which will employ 3,000 people when it reaches full capacity in 2012, officials said.
Ernst & Young said the latest survey, which counted 2009 investments, included 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, but it was officially opened in April of this year.
Ernst & Young spokesman Pyotr Yudin referred questions to two company executives, who were not available to comment Wednesday.
The survey did not give an absolute measure of foreign direct investment.
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, 14 percent named Russia as one of the world's three strongest investment magnets, it said. Last year's survey showed that 16 percent of executives made the choice.
Still, Russia remained the sixth-best target globally for investors, according to the latest survey. The executives, who represented various parts of the world and economic sectors, were also polled in January and February.
China bagged the first prize, with 39 percent of the vote. Western Europe came in second, lagging by one percentage point, while Central and Eastern Europe took the next spot, winning the hearts of 22 percent of corporate decision makers.
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.
Respondents selected three possible answers from the list. Over the next three years, Russia may slip to last place among the regions in the poll, the survey found.
