Russia

The net FDI (value) position for UK investment into Russia was more than £6 billion at the end of 2006. This represents a significant increase over previous years which reflects a number of large recent UK investments in Russia. (View UK FDI analysis by sector for 2006)

Key points:

• The ONS data shows a steady increase in UK investment in Russia between 2002 and 2005 before a threefold increase between 2005 and 2006. In Russia, FDI as a proportion of GDP is already higher than India and is set to overtake China.
• There are over 400 UK companies involved in Russia and the UK is consistently among the top five foreign investors in Russia. The UKTI reports that the UK was the largest overall investor in Russia in the first half of 2007.
• The ONS data suggest that the vast majority of UK investment is into primary and extractive sectors and service sectors, rather than manufacturing, which accounts for just 7% of total UK investment into Russia. However the ONS FDI data for Russia has a particularly high proportion of UK investment data excluded for confidentiality, which is consistently high over time. This makes any sectoral analysis impossible, using ONS FDI data for Russia.
• The Russia State Federal Statistics Service does provide detailed sector information for total foreign investment in Russia. An adjusted data set has been created by GHK for JNCC using the original 2006 ONS FDI total for UK investment in Russia and this Russian analysis based on an assumption that UK investment in Russia is representative of all foreign investment in Russia. This may not be correct.
• The adjusted total suggests that mining and quarrying, and retail and wholesale are the most significant sectors, accounting for some 42% of the total invested. The significance of mining and quarrying in this analysis is likely to be correct given the significant recent activities of BP and Shell in Russia.