Cicle "La internacionalització de l'empresa“ 9a sessió: Europa II, el cas de Rússia

A quick overview on the Russian Federationand the main Eastern European countries

Prof. Alex Makarevich,People Management and Organization department, ESADE

Russia has a large population and GDP but its GDP per capita has a lot of catching up to do

Russian Federation Hungary Poland Czech

Republic Spain

GDP nominal(bilions US$) 1,850.4 140.3 513.8 215.3 1,493.5

GDP per capita (in US$) 12,993 14,050 13,540 20,444 32,360

Population (milion inhabitants) 147.1 10.4 39.7 10.9 48.8

Source: World Economic Forum. Global Competitiveness Report, 2012-2013. 2011 figures.

2

Source: IMF. World Economic Outlook, Update Jan. 23, 2013

Russia keeps a positive momentum with respect to large Eastern EU members, for which the Euro zone crisis its taking a heavier toll

3

GDP, year over year percent change

Source: IMF. World Economic Outlook . October 2012

Retail price inflation in Russia is higher than in Eastern EU states but has declined significantly from the mid-200s

4

Retail prices, year over year percent change

Poland and Russia are the two largest export markets for Spanish companies in Eastern Europe, while exports to Russia are growing

faster…

Source: DataComex accesed Feb. 27, 2013

Value of Spanish exports (in milion euros)

5

RUSSIAN FEDERATION HUNGARY POLAND CZECK REPUBLIC0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2008 2009 2010 2011 2012

CZECH REPUBLIC

… however the number of Spanish firms exporting to Russia regularly has not increased much compared to the other major Eastern European countries

RUSSIAN FEDERATION HUNGARY POLAND CZECK REPUBLIC0

500

1,000

1,500

2,000

2,500

3,000

3,500

1,776

1,503

2,361

1,8791,839

1,541

2,552

1,9821,854

1,566

2,722

2,097

1,848

1,590

2,893

2,179

2007 2008 2009 2010Source: ICEX (2011): La empresa exportadora española 2007-2010

Number of regularly exporting Spanish firms

6

CZECH REPUBLIC

Russian Federation Hungary Poland Czeck

Republic

Outward FDI Stock (% over total)(Posición Inversión Española en el Exterior a 31/12/2010)

0.28% 1.43% 0.66% 0.80%

# of Spanish firms with affiliates and subsidiaries (OEME database) 68 66 188 83

# of foreign affiliates and subsidiaries of Spanish companies (OEME database)

103 116 321 153

Source: Ministerio de Economía y Competitividad, 2011; OEME database, 2012

At the beginning of 2011, the presence of Spanishcompanies in Russia as direct investors was very modest

7

According to Doing Business Report, since 2005 the EasternEU-members have made significant progress in improving the business

environment while Russia is making progress at a slower pace

Source: IFC; Doing Business Report 2013; WEF,The Global Competitiveness Report 2012-2013

112

Ease of doing business(2012 rank)

(185 countries, rank #1 refers to the country with more pro-business regulations

The most problematic factorsfor doing business (GCR)

Russian Federation

Corruption Inefficient government bureaucracy Access to financing

54Hungary Policy instability Access to financing Tax rates

55Poland Tax regulations Restrictive labor laws Inefficient government bureaucracy

65Czech Republic Corruption Inefficient government bureaucracy Tax regulations

44Spain Access to financing Restrictive labor laws Inefficient government bureaucracy

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Cicle "La internacionalització de l'empresa“ 9a sessió: Europa II, el cas de Rússia

Una rápida visión comparativa de Rusiaen relación con otros países de Europa del Este

Prof. Alex Makarevich,People Management and Organization department, ESADE