Business barometer 2013 - SIVA International Management AS

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Business barometer 2013
• SIVA International Management (www.sivaim.no) has carried out
a temperature measurement for future foreign investment in N-W
Russia in 2012 and 2013.
• The questionnaire consists of 8 questions.
• SIVA IM got 32 responses in 2012 and 29 responses in 2013.
Business barometer 2013
The company's country of origin:
35
Other
30
Iceland
25
Switzerland
20
Germany
15
UK
Finland
10
Sweden
5
Norway
0
2012
2013
Business barometer 2013
Was the company's business in Northwest Russia better in current year comparing to the
previous year?
100%
90%
Other/Not sure
80%
70%
Just as good
60%
50%
No
40%
30%
Yes
20%
10%
0%
2012
2013
Business barometer 2013
Do you think the business in the next year will be better than in the last year?
100%
90%
80%
Don't know
70%
60%
Better
50%
Worse
40%
Just as good
30%
20%
10%
0%
2012
2013
Business barometer 2013
Are you planning new investments in Northwest Russia in the upcoming year?
100%
90%
Don't know
80%
70%
No
60%
Yes
50%
40%
30%
20%
10%
0%
2012
2013
Business barometer 2013
Are you planning to hire more staff in the upcoming year?
100%
90%
80%
Don't know
70%
60%
No
50%
Yes
40%
30%
20%
10%
0%
2012
2013
Business barometer 2013
Has the business climate improved in Northwest Russia in comparison with previous
years?
100%
90%
80%
Other
70%
60%
No
50%
Yes
40%
30%
20%
10%
0%
2012
2013
Business barometer 2013
What is the biggest problem with conducting business in Northwest Russia (2012)?
• Authorities ignore business’s needs;
• Business cultural differences. Frequent changes in the legislation;
• Totally corrupted public sector. No real commitment from the federation to infrastructure
investments/guarantees. This prevents all P-P-P activities/investments aiming for infrastructure improvements;
• Unclear situation with the Stockman;
• Customs rules, federal bureaucratic procedures;
• Lack of development in this region, relevant for businesses;
• To loan money to invest;
• Complexity of official procedures, the way routine inspections are done, underdevelopment of infrastructure;
• Lack of understanding from the Authorities in the Murmansk region how to resolve the situation related to
electric power in the city of Murmansk.
• The government must modernize the bureaucracy, not half-heartedly as a Russian tradition, but wholeheartedly;
• Russian bureaucracy is not large but are terribly inefficient and lack of expertise;
• Often Russian companies do not have business culture, I mean, transparency in cooperation, ability to keep
promises;
• In the future we see that the Customs system can be the time-killing and the biggest challenge;
• Bureaucracy and corruption;
• Lack of basic approach for creation of a competitive investment climate in the region;
• Recruitment of the correct competence and stable staff;
• Short-term planning and absence of clear strategy of the country development from the Russian authorities;
• Corruption and differences in culture and mentality.
Business barometer 2013
What is the biggest problem with conducting business in Northwest Russia (2013)?
• Negative impression/reputation among foreign investors
• Political system, not stable in a long term. Also change of rules and system is a problem for a foreign
company.
• Land question. We solved our main challenge after 3 years and 7 courts, we experienced that first top
officials try to "steel" our property and when this was not possible they put a lots of obstacles for us. But at
the end they gave up.
• Much of "Black - Grey" business in building Industry, both for selling and for labor, last very much.
• To understand that you are in Russia not the homeland, differences in tax rules, business culture, etc.
• Trade procedures; Gap in culture; Bureaucracy
• Unstable political situation. We as a consultant company has experienced that a lot of projects has stopped
due to the political changes in Russia.
• Inefficiency of governmental management, high corruption risks, misbalanced legal
regulations/discrepancies between codes, the control/fiscal system which is aimed at punishment, not at
development
• Customs/unreliable time and cost to pass/get equipment passed.
• Unpredictable development of the business sphere
• The registration process takes long time.
• The signals from the president give impression that it might be more difficult to cooperate over the
borders.
• Lack of transparency. You can never trust a law. You can never trust governmental institutions, there is
always new problems when business gets profitable.
• Lack of clear information about the possibilities for western investors: what terms and guarantees the local
and regional authorities can provide to western investors to support their investments.
• Complicated procurement and tendering procedures.
Business barometer 2013
Conclusions:
Though the negative assessment of business climate and business prospects is not much
higher comparing to previous year, the results demonstrate increased uncertainty in the
future development of business in Russia.
In the open question “What is the biggest problem with making business in Russia” most
of answers demonstrate the same problems as in the previous questionnaire, but we get
more statements showing that business need more certainty about the situation
irrespective to political changes and trends.
Major problems indicated by foreign business are:
• corruption and complicated procedures in public sector,
• inspections routines seem to be aimed for punishment and penalty collections,
• frequent changes in regulations.
Electricity access and legal issues with land are mentioned as specific problems in
Murmansk.
Business barometer 2013
THANK YOU FOR ATTENTION
TAKK FOR OPPMERKSOMHET
www.barentsnova.com
www.sivaim.no

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