the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
SWOT Analysis
Russia Business Environment SWOT
Strengths • The post-1998-crisis economic rebound, combined with significant reductions in
personal and corporate income tax rates, has made Russia a much more attractive
place to do business.
Weaknesses • The operating environment remains hazardous on a number of fronts, with many
foreign investors put off by poor legal safeguards, high levels of bureaucracy and
corruption, and the Kremlin's apparently politically motivated campaign against
foreign oil firms.
Opportunities • Despite Russia's poor investment image in the West, the benefits of its immense
natural resources wealth and large and rapidly growing domestic market are
significant incentives for potential foreign direct investors.
• The government has made fighting corruption a key priority and we expect sweeping
legislative changes to significantly enhance the capacity of corruption fighting
institutions in the medium term.
Threats • State influence over business is on the rise. Most recently, foreign operators in the
energy sector have come under pressure to allow state-owned firms greater
involvement in their projects. Nevertheless, the worst-case scenario of a reversal of
the 1990s privatisations appears unlikely.
• Given very low confidence in the domestic banking industry, the central bank's
efforts to restructure the sector could destabilise it further.
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