By Anna Semenova
The Eurasian Development Bank, created in 2006 to promote the development of its members (Russia, Kazakhstan, Belarus, Armenia, Tajikistan and Kyrgyzstan) has conducted a major study of the investment market across the CIS and Georgia, helped by the Institute of World Economy and International Relations of the Russian Academy of Sciences.
Their study of 600 mutual bargains, starting from $3m (from the Internet, newspapers, business magazines and corporate reports) differs greatly from official statistics, which say that a third of Russian Roubles are invested in Cyprus, 15 percent in the Netherlands and 12 percent in the Virgin Islands. According to such statistics, in 2011, Ukrainian businessmen also placed 90 percent of funds in Cyprus, while 80 percent of Kazakhstan’s money went to the Netherlands and UK. In fact, the truth is that offshore companies have been used. According to Yevgeny Vinokurov, Director of the EDB Centre for Integration Studies, central banks do not take into account reinvested funds earned and invested in business development abroad.
According to the EDB, investment transactions across the CIS and Georgia over the past 20 years have amounted to $56bn. Every sixth project is worth over $100m, with Russia the undisputed major donor, responsible for 391 investment projects (87 percent). In all, 42 have been implemented in Kazakhstan, and 41 in Belarus.
An investment boom in the CIS and Georgia took place in the 2000s, reaching its peak between 2006 and 2008. Funding has fallen recently but, even in times of crisis, companies have sought niches in which to expand, promoting cross-border transactions. In the 1990s, as we might guess, investment was drawn mainly to oil and gas. In the 2000s, telecommunications gained force and, now, the food and light industries, real estate, hotel businesses and engineering are drawing attention. According to Alexey Kuznetsov, Director of the Centre for European Studies at the Institute of World Economy and International Relations of the RAS, these are likely to grow further over the coming five years.
Kazakhstan ($3bn) and Ukraine ($1bn) are the CIS countries which have invested most in Russia, while Belarus has begun to become active within Russia’s commodity distribution networks and assembly plants. In fact, data collected by the EDB on investments in and from Belarus differs only minimally from official statistics. The biggest deal involved the sale of Beltransgas to Gazprom, making this company the clear leader for investment volumes among CIS countries.
According to Igor Finogenov, Chairman of the EDB Management Board, the data should prove interesting to businesses and CIS governments — especially as it is being constantly updated.
