EDB Centre for Integration Studies reports that Belarus, Kazakhstan, Russia and Ukraine’s aggregate direct investment outside the CIS has grown by 69% over the last four years

Turkey is the leading recipient of investment in Eurasia, Italy in Europe and Vietnam in Asia.

St. Petersburg, 17 December 2013. Despite the global economic crisis, foreign direct investment (FDI) accumulated by the CIS four largest economies in Europe (outside the CIS) and East Asia has grown from US $25.8 billion to US $48.1 billion over 2009-2012. Out of this, Russia accounts for US $41.3 billion.

These figures are provided in the report titled Monitoring of Foreign Investment by Belarus, Kazakhstan, Russia and Ukraine in Eurasia (Eurasia FDI Monitoring) prepared by Eurasian Development Bank’s (EDB) Centre for Integration Studies. This pilot research is being fulfilled in cooperation with the Russian Academy of Sciences’ Institute of World Economy and International Relations (IMEMO) and covers all European countries, Turkey, China, Mongolia, Vietnam, Japan and both Koreas. The project is planned to expand its geography in the future.

Experts state that the leading recipients of FDI are Turkey (US $7.3 billion), Italy (US $6.4 billion), Romania (US $5.7 billion), Germany (US $3.7 billion), U.K. (US $3.5 billion) and Bulgaria (US $3.5 billion). In East Asia the largest recipient of investment is Vietnam (US $1.9 billion). Twelve countries have accumulated over US $1 billion of investment from Belarus, Kazakhstan, Russia and Ukraine and another eight US $500-999 million.

The investment activities of the four countries focus on the European Union. Fifteen “old” EU member states account for 44.7% of accumulated FDI from Belarus, Kazakhstan, Russia and Ukraine; new members that joined the EU in 2004 and 2007 have received 28.7%.

“The largest increase in FDI in 2009-2012 was due to investments by Sberbank and the Magnitogorsk Iron and Steel Works in Turkey, KazMunaiGas in Romania, Vympelcom in Italy and Rosneft in Germany. The Black Sea countries — Turkey and Romania — had the largest growth of US $4.2 billion and US $3.6 billion respectively. Vietnam, with US $1.9 billion, is the leader in Asia: the negotiations between the Customs Union and Vietnam about the free trade agreement are rooted in investment ties and pave the way for new investment,” says Evgeny Vinokurov, Director of the EDB Centre for Investment Studies. “On the other hand, investments in Asia’s major economies such as China, Japan and the Republic of Korea are insignificant.”

The fuel sector (US $20.15 billion), finance (US $6.6 billion) and ferrous metallurgy (US $5 billion) account for two thirds (US $31.7 billion) of accumulated FDI from Belarus, Kazakhstan, Russia and Ukraine in Europe and East Asia. The telecommunications and IT sector has received another 9% (US 4.3 billion) of investment.

The Eurasia FDI Monitoring project supplements another research by the EDB Centre for Integration Studies — Monitoring of Mutual Foreign Investment in the CIS Countries (CIS Mutual Investment Monitoring). The experts of the Centre believe that the data and analysis provided in the report will help companies to better orientate in the business space of the Eurasian macro-region and the states to promote corporate integration in order to improve the competitiveness of their national economies.

The report and presentation of Monitoring of Foreign Investment by Belarus, Kazakhstan, Russia and Ukraine in Eurasia are available online.

Additional Information

Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital exceeds US $1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at https://www.eabr.org.

The Centre for Integration Studies is a specialist research centre of Eurasian Development Bank. The Centre organises research and prepares reports and recommendations on regional economic integration. Read more about the Centre’s projects and publications at www.eabr.org/r/research/analytics/centre/