About: Russia—Quick Facts

GDP Growth

Over the past five years, Russia has been an economic success story largely unrecognized in the U.S. with over GDP growth rates of 8.3% in 2000, 4.9% in 2001, 4.0% in 2002, 7.3% in 2003, 7.2% 2004, 6.4% in 2005, 7.4% in 2006, and 8.1% in 2007 years.

Balance of Trade

Trade surpluses of $67.0 billion in 2000, $54.7 billion in 2001, $55.0 billion in 2002, $68.9 billion in 2003, $94.4 billion in 2004, $118.26 billion in 2005, $139.2 billion in 2006 and $152.8 billion in 2007. In January-February 2008 trade surpluses reached $33.6 billion (in January-February 2007 this index was $19.4 billion).

Real Disposable Income

Rose 9.1% in 2000, 7.2% in 2001 and 8.8% in 2002, 14.9% in 2003, 7.8% in 2004, 8.9% in 2005, 10.0% in 2006 and 10.4% in 2007.

Foreign Investments

FDI remained around 1% of GDP between 1997 and 2002 and reached 5% in 2002. Capital inflows in 2003 increased up to $9.9 billion (50% increase from 2002)–6.7% of GDP; in 2004 rose up to $10.8 billion (36% from 2003)–7.2% of GDP; in 2005–$13.1 billion (32% from 2004)–7.5% of GDP; in 2006–$13.7 billion (4% from 2005)–6.1% of GDP; in 2007–$27.8 billion (202% from 2006)–9.6% of GDP. In January-February 2008 the foreign investments increased 20.2% in comparison to the same period in 2007 year.

Independent Analytical Evaluations

• Moodys'Ratings March, 2008: " Government of Considerable foreign currency reserves and government oil savings place Russia in a position to withstand even rather severe external shocks. Rating Outlook The government's foreign and local currency ratings and Russia's country ceiling for foreign currency bank deposits are on review for possible upgrade."
• Fitch Ratings August, 2007:"Russia Long Term Issuer Default Rating and Local Currency Long Term Issuer Default Rating remains BBB+. The outlook is stable"
• Standard&Poor’s Credit Rating September, 2006 - BBB+/Positive
• Moody's Issues Annual Report on Russia 2006: "Russia's investment-grade ratings reflect more than six years of strong current account and budget surpluses, rapidly falling government debt levels, and massive increases in official foreign currency reserves and the oil stabilization fund."
• Moody's Ratings 2005: “Russia's liquidity and debt ratios have improved dramatically in a relatively short time period. The outlook for the rating is now “stable”.
• Fitch rated Russia with investor’s rate in November 2004, Standard & Poor’s—in January 2005.
• AT Kearney moved Russia from the 11th to 6th place in its annual foreign direct investment rating of most attractive
  country for investment.  
• According to Ernst & Young, Russia is the second favorite behind Germany among possible investment locations in Europe

Government Support

• November 2004: Concept for the Information Technology Advancement in the Russian Federation till the Year 2010 approved
• December 2004: President Putin visits Bangalore, India
• January 2005: President Putin announces
  IT technology park initiative
• February 16, 2006: State Council Presidium Meeting on Information and Communication Technology in the Russian Federation,
  Nizhniy Novgorod
• March 10, 2006: Technology park projects started: parks to be built in St. Petersburg, Tatarstan, Moscow, Tiumen, N. Novgorod, Novosibirsk regions, $3.6B total,
  20% state investments
• 2006: IT investment fund announced: $100M, 75% state investments
• 2006: Approved: VAT refund, special economic zones law; software exports simplified

Labor Pool

• Russia has one of the highest adult literacy
  rates in the world (98.7%)
• As a result of great emphasis on science and technology in education, Russian mathematical and scientific research is generally of a high order. Russia is widely known for its world-class R&D traditions, supported by the large number of scientists, mathematicians, engineers, and other IT-related specialists available in the labor pool.
• The number of university graduates in IT-related fields amounted to over 244,000 people in 2005-2006 academic year
• Low-cost labor resources with engineering and software talent
• Russian university teams annually take part in ACM International Collegiate Programming Contest and win first places. In ACM ICPC 2006 final 5 teams from RF placed in the top-ten, along with teams from US, China and Poland, Saratov State University
  won Gold medals.