Exporting to Russia
Resurgent Russia ripe for exports
By area Russia is by far the largest country in the world. With 142 million people and eleven time zones it is the UK’s fastest-growing export market and the third largest after Europe and North America, according to UK Trade & Investment. In 2011 British exports to Russia increased by 39 per cent over 2010, representing trade worth £4.8 billion.
It is the eighth largest retail market in the world and the fourth largest in Europe, having recently overtaken Brazil, Italy, Spain and Mexico. Spectacular growth from earlier years has now slowed with public and private investment programmes trimmed. Nevertheless, Russia is still seen as having long term potential for UK exporters.
With Russia finally a member of the World Trade Organisation, the Russian economy has been through something of a roller-coaster since the collapse of Communism in 1989.
In the decade that followed, the economy underwent an acute crisis, contracting by a staggering 40 per cent with industrial output down by 55 per cent, a situation normally unprecedented in peace time. The financial crisis of 1998 prompted widespread political change. Since then Russia has enjoyed the boom years. The economy has grown by 185 per cent, an average of 7.3 per cent a year. Russians suddenly began to save less and spend more.
The first five years after the crisis saw rapid growth with far closer co-operation between the state authorities and business. In 2003 conflict erupted between politicians and members of the super-rich. Billionaires were jailed and election regulations were tightened prompting a distinctly less liberal atmosphere. The years 2004 to 2008 saw much more state intervention than previously.
Now a member of the BRICS economies with Brazil, India, China and South Africa, the country has massive natural resources and an educated work force. Analysts believe Russia has the capacity for further substantial growth over the coming years. With energy prices sky high, it is enjoying an oil and gas boom. It also has rich reserves of coal, common and rare metals, gems and phosphates. The Siberian forests hold around a fifth of all the world’s timber.