Slide1: Briefing on Business opportunities in Russia 22 November, 2007 Danske Ark


Since the Financial crisis in 1998the Russian Economy Has Been Growing Strongly: Since the Financial crisis in 1998 the Russian Economy Has Been Growing Strongly Source: ISI Emerging Markets, Federal Statistics Service


Foreign Currency Reserves Continue To Pile Up: Foreign Currency Reserves Continue To Pile Up Source: ISI Emerging Markets, Central Bank of Russia


Stabilization Fund: Stabilization Fund Source: The Government of Russia (based on current RUR/$US exchange rate), World Bank


Structure of Danish Exports to Russia, 2006Denmark’s 12th largest export country: Structure of Danish Exports to Russia, 2006 Denmark’s 12th largest export country


The Russian Market: The Russian Market Strengths Strong Economic Development supported by rising energy prices Political Stability; President Putin likely to become PM after the elections WTO-Membership negotiations continue Well-Educated Population FDI Constitute $23 bn in 2006 Russians now feel confident investing domestically


The Russian Market : Threats Economic growth primarily relying on energy prices A need for diversification of the economy Growing State Control Within Key Sectors of the Economy High Inflation rates Demographics The Russian Market


Myths and Facts About Business in Russia: Myths and Facts About Business in Russia How Expats in Russia Perceive the Russian Market Best Kept Business Secret In The World Continued high Growth Rates Separate Politics & Business How Danes perceive the Russian market Dangerous & Corrupt Similar To Poland or Baltic States Focus On Politics – Less On Business


Slide9: Bureaucracy Is Cumbersome True, But This Is An Emerging Market Preparations for WTO and Winter Olympics 2014 eventually streamline various Procedures Russia Is Not Safe Western Business People Are Rarely Threatened Crime Is High In Most Metropoles Of The World


Construction Activities in Russia Key Figures : Construction Activities in Russia Key Figures


Ancient and Modern Russian Architecture: Ancient and Modern Russian Architecture


Leading Russian Regions in terms of Construction Volume1. Moscow2. St. Petersburg3. Krasnodar region4. Moscow region 5. Sverdlovsk region6. Leningrad region7. Sakhalin region8. Tyumen region9. Tatarstan10. Bashkortostan: Leading Russian Regions in terms of Construction Volume 1. Moscow 2. St. Petersburg 3. Krasnodar region 4. Moscow region 5. Sverdlovsk region 6. Leningrad region 7. Sakhalin region 8. Tyumen region 9. Tatarstan 10. Bashkortostan


Southern federal district: Southern federal district Source: Goskomstat 2006, AmCham News (Volume 12, Number 67) and wikipedia.org Population: 22.8 million Regional capital: Rostov-on-Don (1.058 million inhabitants) Gross region product: 40 bln. USD Average income per capita: 290 USD monthly (September 2006) Key industrial sectors: Energy, agriculture, machine construction, metallurgy, chemical and petrochemical, food, tourism


Winter Olympics 2014 in Sochi: Winter Olympics 2014 in Sochi First ever Winter Olympics to be held in the sub tropics Olympic Park and Krasnaya Polyana Commercial visit to Krasnodar February 2008


Legal Framework: Legal Framework Foreign architects may operate in Russia only if they have a representative office or subsidiary Foreign architects may particpate in Joint Ventures with local architects Architectural competitions and the market of tenders lack transparency


Financing: Financing Interest rates at 13-16% in RUR terms considered an impediment to residential construction sector growth Russian mortgage scheme so far available only for wealthy citizens However, more options now offered by banks and construction companies


National Project: “Affordable and comfortable housing for Russian citizens”: National Project: “Affordable and comfortable housing for Russian citizens” Aims: Increasing mortgage loan activities Increasing the availability of housing Fulfilling government obligations regarding providing certain categories of citizens with housing Increasing the volume of residential construction and modernisation of infrastructure


National Project: “Affordable and comfortable housing for Russian citizens”: National Project: “Affordable and comfortable housing for Russian citizens” Challenges Large gap between supply and demand of housing Inefficient scheme of land sale and assignation for residential construction Complicated procedure of building documentation approval Building industry is growing faster than production of building materials


National Project: “Affordable and comfortable housing for Russian citizens”: National Project: “Affordable and comfortable housing for Russian citizens” Financing Federal Budget National Project Budget on the first stage (2006-2007) – 134.3 billion RUR, including 84.7 billion RUR of direct expenses and 49.6 billion RUR of state guarantees Extra-budgetary funds (main source of financing) Source: http://www.rost.ru


Energy Efficient Housing: Energy Efficient Housing Subsidized domestic energy prices Kyoto Protocol obligations and CO2 quota trading Health care synergy; improved indoor climate Future market; Germans already active


Public Diplomacy: Public Diplomacy Promoting Danish values and views among foreign media, decision makers, business community and NGOs in order to strengthen Danish influence internationally Press Tour to Denmark for 12 Russian journalists from national media and specialized magazines 12-16 November, 2007 “Arkitekturnation Danmark” to be promoted in Russia 2008


TCD-Russia : TCD-Russia Market analyses Partner search Company establishment PR Activities Lobbyism Export start package for SME co-financed by MFA Joint export promotions co-financed by MFA Building & Construction Forum