Small businesses fuel strong Russian recovery

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Multinational companies are investing large sums in a Russian economy which is enjoying a boom period thanks to a national emphasis being placed on the power of small businesses.

Russian President Dmitry Medvedev has been keen to emphasise the important role that small outlets and business can have in moving the economy forward in these tough times.

Pepsi, for example, has invested approximately £3.2 billion into Russian markets in 2011. This is largely the result of small shops springing up in several remote locations, driving the need for everyday essentials such as snacks, soft drinks and alcohol.

This follows a statement from the International Monetary Fund (IMF) stating their belief that they expect positive relations to remain in place between themselves and Russia, despite the recent resignation of Alexei Kudrin as Finance Minister.

There had been fears that cracks would start to show in the relationship if foreign investors were scared off by the changes within the country. However, this has not proved to be the case.

Juha Kahkonen, the IMF’s mission chief for Russia, stated; “On the reshuffling in the government, our working relations with the authorities have been good.... and we trust that this will continue going forward.

“But no matter who is in charge, the significant challenges that we have outlined for the economy are there and we would hope that policymakers would work to address these.”

Despite Kudrin being credited with some good recent work within the Russian economy, Kahkonen hinted that there were areas which could be improved.

“We believe Russia can do better. The economy has great potential and could grow significantly faster if the right policies are adopted,” Kahkonen stated.

Transferring money to Russia

If you are looking to invest in Russia, think carefully about how you will be transferring money to Russia. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money now to Russia – which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.

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Small businesses fuel strong Russian recovery

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