Russia’s Ambitious Plans Hold Promise

Russia is committed to attaining the same level of wealth as leading Western countries and especially the US by 2030.

The major investments in the reorganization that underlies this ambitious program will also stimulate Italian businesses with their widely acclaimed technological leadership in glass processing machinery.          The year 2013 may mark a turning point in the Russian economy, namely the start of a new phase of growth for a country that has the potential to become a star in the global economy over the coming years.Forecasts put the 2013 GDP increase at between 5 and 6%, and growing progressively to reach a more ambitious goal by 2030 when Russia will rank among the top world powers. The Russian government has recently announced an economic policy that is designed, among other things, to lay the foundations for promoting business and building capital for investments, progressively downsizing the public sector, selling state-run companies and embarking on the most radical and credible privatization program ever implemented to date.

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According to a recent document by the Department of Economic Development, the goal is to help Russia attain a level of economic development by 2030 that befits a leading world power in the 21st century, guaranteeing its citizens a quality of life that will be higher than or at least equal to that of the most developed countries, such as the European Union or the United States. Russian Prime Minister Dimitri Medvedev has decided to shoulder this challenging task which requires his government to relieve the country of major obstacles such as its oppressive red tape, increasingly rampant corruption, capital drain, and heavy dependence on raw materials, first and foremost oil. If all pledges are honored, the benefits of this radical therapy may be seen as early as 2015: for instance, labor productivity may grow by 50% with a yearly average increase in wages and salaries of at least 4%.

 

Is this just a pie in the sky or a downright economic revolution with short-term positive effects? The answer will come in the next two years because what is happening in the ailing European Union may substantially influence Russia's reform plans. However, all the conditions are in place to further promote exports by Italian companies to Russia. As Carlo Strappa, Marketing Manager at Intermac-Biesse and an expert on Russia, explained: "Russia is a vital market for my company, and we have been working with this country for several years now, achieving good results in 2012. Today, Russia and its former USSR satellite countries such as Ukraine, Kazakhstan, and others, account for 18% of our overall exports. Our core business was once the furniture industry, but the building sector has now become a very interesting niche. The increase in major construction projects offers interesting margins and the opportunity to cooperate with leading companies and create a network of invaluable business-building relations." This dynamic performance is closely related to oil and gas prices which are among the main items in the Russian economy that account for a lot of the money that flows into the country. Today things are looking up and companies are investing heavily. This is therefore a market with a huge potential but that needs to be followed up closely: "A very experienced local agent helped us set up a local office - continues Carlo Strappa – because it is quite complicated to find your way in a maze of unusual bureaucratic and market mechanisms. And, as is well known, after sales and customer support are just as important as sales, both for stand-alone machines and especially for production lines with strong flow automation."

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