Monitoring of direct investments of Russia, Belarus, Kazakhstan and Ukraine in Eurasia — 2014

• Report

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• Presentation

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• Release

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The second report presents new results of the permanent annual project dedicated to monitoring of direct investments of Belarus, Kazakhstan, Russia and Ukraine in Eurasia. On the basis of the statistics collected during monitoring, detailed information is provided on the dynamics, actual geographical location and sectoral structure of the investments. In addition, the report examines outward direct investments of Austria, Turkey, India, Vietnam and China that have been made in Russia, Belarus, Kazakhstan and Ukraine.

The report states that 89.8% (US $62.6 billion) of all FDI accumulated by the four CIS countries in Eurasia are that of Russia. The top recipients of Russian FDI are EU countries, which accounted for more than 54% of all FDI in 2013. Italy’s portion reached almost 14.8%, Germany’s 8.0%, the UK’s 5.8%, and Bulgaria’s 4.9%.

Beyond the EU, the top ten recipients are Turkey (10.9%), Iraq (6.8%), India (6.3%), Pakistan (5.8%), Bangladesh (5.3%), and Vietnam (3.3%). In recent years Russian FDI in the Near and Middle East countries, as well as South Asia countries grew dramatically.

Kazakhstan does not expand its investment in Eurasia beyond the CIS at the moment (US $4.5 billion), but has potential to significantly enhance its investment activity. Ukraine’s FDI totals US $1.8 billion. Belarus has almost zero investment in Eurasian countries.

The leading corporate investor in Eurasia is Russian LUKOIL. The top ten investors include four more oil and gas companies: Gazprom, KazMunayGas (Kazakhstan), Rosneft and Zarubezhneft.

This year MDI Eurasia reviews, in addition to FDI made by the region’s countries, FDI made to the CIS top four economies by Eurasian countries, including Austria, Turkey, India, Vietnam and China. The report states, in particular, that Turkish FDI (US $7.8 billion) are special in that they are strongly diversified by sectors and that Indian FDI (US $15 billion) has a high specific weight in the total amount of direct investment in the CIS, while the number of investment projects they are channeled into is not that big. In particular ArcelorMittal, which is controlled by the Indian capital, accounts for 76% of all Indian FDI in the CIS. The second largest Indian investor is ONGC with its US $3.5 billion investment in oil and gas production in Russia.

Overall, the report provides data on and analysis of 620 investment projects. The Centre for Integration Studies believes that this information will help companies to better understand the Eurasian business environment and the states to promote corporate integration with a view to improving the competitiveness of their national economies.