REUTERS
Investment in Russia last year fell to a historic low, down even on the levels seen during the financial crisis of 2008-2009, according to data from the Bank of Russia.
In 2014, the amount of direct foreign investment in the Russian economy amounted to $20.9 billion, the lowest level in the history of Russia,
The largest decline was recorded in four sectors: finance and insurance (a decline of about 40%), energy production (27.6%), construction (17.8%) and trade (13%). In addition, investment in transport and communications in Russia also decreased by 12%.
Taking into account the direction of capital flight, the amount of investment from abroad decreased mainly due to withdrawal from the Russian market of Russian-owned companies registered in offshore zones. One-quarter of all foreign investment was received from Cyprus. In addition, Russian business received investments from the Bahamas and the Virgin Islands, by means of which it manage to recapitalize 36% of its debt in 2013.
Direct investments in Russia from these regions amounted to $2.8 billion last year. In comparison, in 2008, even when world markets were incredibly feverish due to the crisis, that volume amounted to $25.4 billion.
Last year, Russia also faced the massive freezing of its assets abroad, Ukrainian newspaper ZN.UA reports referring to Polish newspaper Rzeczpospolita. $56.4 billion are reported to have been sent abroad by Russian investors. The capital outflow was beneficial to Cyprus, Bermuda and the Bahamas, as well as Switzerland, the Netherlands and the United Kingdom, as these countries saw an increase in the number of registered Russian companies.
As reported earlier, Ukraine has outstripped Russia in investment attractiveness ranking by 11 positions, with the ranking made up of 174 countries. The most attractive for investors is Switzerland. The top ten include Singapore, Hong Kong, Norway, Denmark, the Netherlands, Canada, the UK, Sweden and New Zealand. The United States was ranked 14th.
Last year, investors avoided investing in Ukraine, expecting a new phase of Russian intervention. However, in early 2015, Japan decided to conclude an investment agreement with Ukraine and the United States stepped up its investment and business connections.