SITE’s director Torbjörn Becker made a presentation on Russia’s external economic links—challenges and opportunities at the international conference ”Evolution of International Trading System: Prospects and Challenges”
Russia’s external economic links—challenges and opportunities
1. Russia’s external economic links—
challenges and opportunities
Torbjörn Becker
Director of SITE
Presentation at Saint Petersburg State University’s international conference
“Evolution of International Trading System: Prospects and Challenges” on
October 20-21, 2016
4. Russian trade—EU biggest partner by far
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2013 2014 2015
Imports
EU China CIS USA Japan ROW
0
100,000
200,000
300,000
400,000
500,000
600,000
2013 2014 2015
Exports
EU China CIS USA Japan ROW
• Imports 2013 – 2015: -42%
• Exports 2013 – 2015: -35%
• EU’s share of total trade went from 50 to 45%
• But CIS (13%) & China (12%) still far less important
5. Russian investments—EU again main partner
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2013 2014 2015
FDI in Russia
(stocks in USD mn)
ROW
USA
CIS
Tax havens
EU ex C+N
Netherlands
Cyprus
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2013 2014 2015
USDmillion
FDI from Russia
(stocks in USD mn)
ROW
USA
CIS
Tax havens
EU ex C+N
Netherlands
Cyprus
0
10000
20000
30000
40000
50000
60000
70000
2013 2014 2015
USDmillion
Por olio investments from Russia
(stocks in USD mn)
ROW
United Kingdom
Netherlands
Cyprus
Ireland
Luxembourg
• Investments often through tax havens
• => Hard to know source and destination
• EU (and EU havens) major partner
• Most “real” FDI likely from EU
6. Swedish—Russian ties
FDI going down…
…as is portfolio investments
From T. Becker, “Investment Relations between Sweden and Russia”, forthcoming in Foreign direct
investment to and from Russia: Recent trends and international investment cooperation, Edited by Kari
Liuhto, Sergei Sutyrin and Jean-Marc Blanchard
9. “Putin does not see the end of the era of hydrocarbons”
“…many started saying that
the era of hydro-carbons was
coming to an end…no real
reason for such far-reaching
conclusion yet.”
”…Mankind is moving
towards green energy.”
President Putin at World
Energy Congress in
Istanbul quotes from
pravda.ru
11. Conclusions
• “No man is an island” (John Donne, 1624); development in
isolation is not an option even for super large Russia
• Current external links are too heavily focused on
exchanging natural resources for consumption and
investment goods
• Oil creates too much uncertainty and is not a sustainable
driver of growth for Russia or the world
• Oil (and other natural resources) still an asset that can be
used to transform the economy, but it needs to start sooner
rather than later
• Russia already has the potential to leverage its human
capital, use this!
• The EU, including Sweden, are natural partners for Russia
in this transformation, both for trade and investment, and of
course scientific meetings!
12. 1
Thank you!
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