Russia: Trying to Move Its Economy through Foreign Investment.
While other economies around the world have been slowing, Russia has experienced 3 years of vigorous growth. Starting with the devaluation of the ruble, which followed the IMF default in 1998, companies inside Russia were forced to adapt to a more competitive landscape and providing alternative products to higher priced imports. In addition to its shift in manufacturing, the recent increase in oil prices has provided a windfall of cash and given Russia a surplus budget. Now, with its improved manufacturing models and oil as its cash cow, Russia has watched its economy make the move upward, but has reached a point where it needs foreign investment to continue it ascent.
It was only four years ago when Russia had defaulted on its loans from the International Monetary Fund and looked like it was heading for an economic train wreck. Today, while the rest of the world is experiencing an economic headache, Russia has been growing and on the move towards economic stability. Mikhail Kasyanov, the Russian Prime Minister, just signed a new declaration in the beginning of November to restructure Russia's old Soviet era debt. The debt is estimated around $6 billion and Moscow has currently put together $1.1 billion in financial instruments to finance the restructuring of its obligations. In addition to meeting these old Soviet era payments, Russia is also meeting its current obligations.
Foreigners are now looking at Russia, which has always been considered an unknown for investors in the past, as an opportunity that is looking less risky. Its president, Vladmir Putin, has allied with western countries on their war against terrorism and he has gone to great lengths to mend old wounds carried over from the Cold War era. Russia has been rewarded with a larger role in NATO's decision-making, the recognition of a market economy both by the U.