FDI In The Russian Economy: Ways And Effects Assessment

FDI is one of the driving powers for Developing countries and Country with transitional Economy development, it helps local economy to get access to extra financial resources and high technologies. Russia is not an exception. During the last10years Russian position as a FDI recipient became stronger; nowadays Russia has one of the largest FDI inflow, even after World financial crisis it remains on the high level. Amount of the biggest foreign investors such countries as Germany, Holland, Cyprus, US (by number of realized project using FDI). In spite of the FDI growing trend; effectiveness of foreign investment to the local economy is still low. The main sector for investment is still mineral resources (80%of all FDI are in mineral resources and manufacturing sectors), and the main part of FDI is reinvestment of profits and other investments. Russian government still needs to decrease level of bureaucracy and corruption, stimulate small and medium size entrepreneurs, improve many sectors of economics, such as light and automobile industry, agricultural sector, high technology, etc. Russian investment climate is not the most attractive; we are the179place in the rating "Doing business". There are too many barriers to open a new business for foreign investors, only the biggest one can survive.One of the main factors that will stimulate FDI inflow and improve its structure is the fact that Russia joined WTO in August2012. First, Russia unified standards according to the international requirements; all members of the WTO will have the same rights with local companies without any discrimination. And one of the most important changes, from my point of view, that all disagreement between foreign investors and Russian side could be solved by WTO commission; it will eliminate fears of foreign investors concerning imperfection of Russian legislative branch, bureaucracy and corruption.Every country is looking for efficient investment that can boost local economy. There are many methods to calculate effect from FDI to the economy of the recipient country. In this paper I used multiply regression and Cobb-Douglas function to calculate the influence of1%FDI increase to GDP. It will help us to find mathematical proof of FDI importance for the local economy.