TIMELINE

800-900 BC Scandinavian vikings establish forts in Ukraine and Novgrood 1547 - Ivan IV is crowned the first czar of Russia 1689-1725 Czar Peter the Great lays the foundation for the Russian Empire 1855-1881 Dusing his reign, Czar Alexander II frees the peasant farmers 1898 - The Russian Social Democratic Labor Party was established by the Marxists 1903 Lenin becomes the leader of the Russian communist party 1917- Russian Revolution- Vlamir Lenin and Leon Trotsky take control of the government. Czar Nicholas II and his family are executed 1922 Russia becomes a part of the USSR 1924-1953 Joseph Stalin turns the USSR into an industrial and military power (industrialization and collectivization) 1948 The Cold was between the US and the USSR 1961 - Cosmonaut Yuri.A.Gagarin becomes the first man in space 1985-1991 Mikhail Gorbachev resurrects the government. The USSR collapsed 1991 Boris Yeltsin is elected the President 1999 Yeltsin resigns and Vlamdimir Putin becomes his successor 2010 US President Barack Obama and Russian President Dimitry Medvedev agree to reduce nuclear weapons

GEOGRAPHY

Area : 17,075,200 km Border Countries : Azerbaijan, Belarus, China, Estonia, Finland, Georgia, Kazakhastan, Latvia, Mangolia, North Korea, Norway, Ukraine, Lithuania, Poland

DEMOGRAPHICS
Population: 143,400,000 Population growth rate: .23% Life Expectancy: Total : 70.3 years Male : 64.3 years Female : 76.1 years Birth rate : 13.3births / 1000 population Death rate : 13.3 deaths / 1000 population Gender ratio : 0.86 male / female Net migration ratio : 2.24 migrants / 1000 population

CULTURE
160 ethnic groups speak 100 languages- Russian, Tatar and Ukrainian Russian is one of the 6 official languages of the United Nations Folk music and Russian ballet Wedding toast and broken glass Architecture Religion- Russian Orthodox Rozhdestvo- January 7 & Victory day- May 9 Media: One of the first countries to introduce radio and television Highest number of TV broadcast stations and repeaters Sports: Ice hockey, Basketball, Tennis, Gymnastics Vodka

BUSINESS CULTURE
Collectivism Egalitarianism Russians are transactional Persistence & Patience Russians do not trust people who are all business Svyasi Attitude to time Attention to dress code

INNOVATION
Dmitry Mendelev- Periodic table Nikolay Benardos- Arc welding Pave Yablochkov and Alexander Lodygin- Electric lamps Alexander Popov- Radio Nikolai Basov and Alexander Prokhorov- Laser Andrei Sakharov and Lev Artsimovich - controlled nuclear fusion SPACE TECHNOLOGY: Soviet space program Nuclear technology Aircraft production Arms industry

TRANSPORT
4800 miles of transportation web Export of transportation services- $80 Billion Worlds second largest railway network. 2.5% of National GDP High speed trains connecting St. Petersburg, Moscow, Nizhny Novgorood and Finland 250 Kmph Trans-siberian railway 9300 Km Under developed road system: Highest number of road accident deaths per million population among G8 and BRIC countries Lowest road density among G8 and BRIC countries 271 motor vehicles per 1000 people compared to 797 of USA Airlines are responsible for one fifth of all passenger movement

EXPORTS & IMPORTS

Exports Fuels Energy Metals Gold and Diamond Chemicals Oil Wheat,corn,oat,rice,apples,cherries Fish Export markets: Ukraine, Germany, Holland, China, Belarus

Imports Machinery and equipments Food and agricultural raw materials

Import markets: Ukraine, Germany, Belarus, USA

ECONOMY
Russia has a market economy with enormous natural resources, particularly oil and natural gas and 2nd Largest Coal Reserve It is the 8th largest economy in the world by nominal GDP and the 6th largest by purchasing power parity (PPP). GDP growth rate of 3.4%. It is the 2nd largest Arms Exporter in the world.

ECONOMIC HISTORY
Soviet economy was in decline since 1970s

Had to import grain & meat for the first time

up to 1/3 of the USSRs farm output spoiled

Low standard of living

Though some communist countries (like Czechoslovakia) had a decent standard of living

TODAYS SCENARIO
GDP: 2.015 trillion(2012) (PPP = $2.513 trillion) GDP growth rate:3.9%(2011) Gini coefficient measure of inequality: 42.2 (US = 45) Inflation of about 6% in 2012 GDP per capita (PPP) is only $ 17698 and GDP per capita(Nominal) $ 14,247.

GDP Growth

UNEMPLOYMENT RATE

COLLAPSE OF USSR
Independence of the USSR's republics on 26 December 1991 In 1991 the USSR stopped existence. The Yeltsin government dissolved the USSR. Yeltsin made many economic reforms: privatization macroeconomic stabilization

POLITICAL STRUCTURE
President
Vladimir Putin

Prime Minister
Dmitry Medvedev
Legislative

Federal Government

Executive

Judiciary

BANKING AND FINANCIAL MARKET

Central Bank Of Russia Federal Financial Markets Service (Russia)

FINANCIAL CRISIS
1998 Financial Crisis
1. Declining productivity 2. An artificially high fixed exchange rate 3. The economic cost of the first war in Chechnya, estimated at $5.5 billion Asian financial crisis (1997) Inflation in 1998 reached 84 percent Prices for almost all Russian food items had gone up by almost 100%

GREAT RECESSION IN RUSSIA

2008 Financial Crisis
Stock Market, Money Market and Bank Failures.

Government Intervention
Refinancing foreign capital Tax and state budget policy Corporate governance International cooperation

Russia & India

Political Relation Military Relation Economic Relation Co-Operation in Energy Sector Space & Science&Technology Cultural Terrorism Nuclear Deals

Russia & China

Border Economic Relation Energy Relation Trade in International Currency Military Relation

Russia & The UN

Security Council Permanent member since 1991 UN General Assembly Group of 8 Group of 20 UN Food and Agricultural Organization United Nations Conference on Trade and Development United Nations Economic Commission for Europe World Trade Organization International Atomic Energy Agency International Monetary Fund

Russia & US
Signed bilateral market access deal in 2004. US Russia Agreement on trade relations

Business Facilitation Financial Provisions Intellectual Property Market Disruption Safeguards Dispute Settlement Lend Lease

Russia & Brazil

Brazil-Russia Cooperation Treaty Brazil-Russia Military Technology and Transfer Pact Brazil and Russia Strategic Alliance

Russia & EU
Trade Partnership and Co-operation Agreement

PESTEL ANALYSIS
POLITICS :
Strong political presence in Eurasia. Good diplomatic relations with China Economic Change in attitude towards US. In July 2009, President Medvedev and Barack Obama reached an agreement to cut back their countries' stockpiles of nuclear weapons. Russia also supported the US decision to shelve controversial missile defense bases in Poland and the Czech Republic. Bilateral agreements with a large number of countries in the last 4 years.

SOCIAL :
Income inequality. Against austerity. Affluent population growing at 30-40%. Frequent social unrests. Highly skilled workforce. Low life expectancy-59 yrs. Ethnic issues-10 mn illegal immigrants.

TECHNOLOGY:
Space technology-11 bn $ in the next 6 yrs. IT- fastest growing sector in Central & East European region. Strong industrial sector- energy/nuclear super power Scientific think-tank : powerful research. Skolkovo-Russian silicon valley-innovation hub.

ECONOMICS :
Investment on strategic sectors. Rich in natural resource- petroleum , natural gas & gold. Heavily dependent on export of oil & gas. Highly dependent on food imports-unfavourable climatic conditions. Large GDP. High inflation. Volatile Currency.

LEGAL :
Reforms in judicial system. Poor anti corruption laws.

ENVIRONMENT :
High pollution levels. Harsh climatic conditions. Lack of awareness on issues like global warming. Nuclear waste deposits in Siberia. Longest coast line;largest surface water resource

BUSINESS CLIMATE
Property Licensing SEZ SME support Legal system People Language Education Modernization Innovation

STARTING A BUSINESS

STARTING A BUSINESS

INVESTMENT POLICIES
Foreign Direct Investment in Russia is increasing However, Russian legislation limits the activities of non-Russian investors in companies that are of strategic value to Russia

SPENDING
Russia
India

USA

ANNUAL GROWTH RATE

CONSUMER BEHAVIOR Consumer Behavior

OPERATION CHALLENGES

DOING BUSINESS IN RUSSIA

Pros
Dynamic Economic Growth
Since 2000 to 2010, Russias GDP growth has averaged 5.3% per year, including the 7.8% fall in 2009

Cons
One of the Largest Consumer Markets
4th largest market in Europe Over 140 million consumers with increasing incomes

High Barriers to Entry

Difficult to obtain real estate Administrative processes can be lengthy Expenses run high Import taxes are fairly high

Regional Segmentation
Local legal and tax regulations Duties exist between regional borders Maintain local brand bias Cultures are vastly different between regions

World-Renowned Human Capital

One of the most highly skilled workforces in the world Strong education

Unique Geographic Position

Excellent access to sea, road, and rail routes as well as home to several major airports

Commonly Relied upon Business Tactics are Unenforceable

Negotiations often occur in place of contracts Protective noncompetition covenants cannot be imposed

Few Suppliers
Quality may suffer due to lack of competition, and who you know may be the deciding factor to your success

THANK YOU!!