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It just got easier to do business in Russia

It just got easier to do business in Russia

In a further sign of Russia’s steadily improving business climate, Russia’s Economics Minister Maxim Oreshkin has announced that Russia has moved up the World Bank’s Ease of Doing Business rankings from 40th to 35th in the world.

That puts Russia behind only the advanced economies of the West and some (though not all) of the top economies of the Far East.  Russia now has by a substantial distance the best ranking economy for ease of doing business amongst the BRICS.

By way of comparison, Russia’s ranking for ease of doing business was 120th in the world in 2010.  The radical improvement in the business climate is therefore a relatively recent phenomenon and is the direct consequence of sustained and concerted action by the Russian government.

Oreshkin has discussed all this in detail.  Here are his comments as reported by TASS

Indeed, there is a number of reforms that are not reflected in the statistics and in the rating, and we hope that, by the time of publication of this rating next year, these reforms will be taken into account and allow us to significantly move up the rating. The goal of entering the top-20 remains and we will work hard in the next 6-9 months to carry out additional reforms that will help us achieve this goal.

It is important to understand that now we have entered the zone where competition between the countries is higher. It was much easier to move from 100th to 50th positions in this respect. Now our neighbours and direct rivals are such countries as France, the Netherlands, Switzerland, Japan. It is clear that these countries are also trying to improve the quality of business conditions and are trying to move forward. That is why to move forward we need to be better than they are. Roughly speaking, with the current indicators, if all countries had remained at the level they were 5-6 years ago, then we would have already been somewhere around 20 place.

There are two indicators that remain extremely weak and, in fact, unacceptably weak. This is the situation with permits for construction, where we are on the 115th place, and international trade, where we occupy the 100th position

Here I will express my view that whilst it should be possible for Russia to improve the situation for obtaining building permits fairly rapidly, improving Russia’s ranking for international trade given that Russia’s economy is a self-sufficient continental economy which can be expected to trade mainly with itself will prove extremely difficult.

Putting that aside, the drastic improvement in Russia’s ease of doing business rankings since 2010 must reflect drastic improvements in the country’s business climate.  That however is something that the Western media has chosen largely to ignore.

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