Corruption halts approx 14% of businesses in Russia – RUIE

Cropped File Photo of Two Men in Business Suits Shaking Hands and Passing Cash

(Interfax -YEKATERINBURG, July 12, 2013) A third of Russian and foreign investors believe that corruption is an impediment, President of the Russian Union of Industrialists and Entrepreneurs (RUIE) Alexander Shokhin said.

“Corruption halts approximately 14% of businesses in Russia,” he said at a roundtable, “Investment Climate in Russian Regions through Foreign Investors’ Eyes”, held at the Innoprom 2013 show in Yekaterinburg on Friday.

He cited the estimates of RUIE and KPMG.

“Considering the investment scope, billions of dollars go past Russia because of the corruption factor,” KPMG Managing Partner Oleg Goshchansky told the roundtable.

Polled foreign investors claimed to have seen an improvement in the investment climate in Russia but said the changes were not swift enough. Support from regional authorities is the primary factor in the selection of investment targets, they said.

“Seventy percent of companies are seeking important information from regional authorities,” Goshchansky said.

Regions may be divided into categories by the level of their investment appeal, he noted. In his words, 35% of Russian regions belong to the “yesterday” group and draw no more than $10 million investments per annum, 60% are in the “today” group with over $100 million annual investments, and 5% are in the “tomorrow” group and have a large investment appeal, he said.

Comment