Moscow in the TOP 5
The capital of Russia made it into the top 5 European cities most attractive to investors
Moscow placed fifth in the rating of European cities most attractive for investment, ahead of Helsinki, Warsaw, Berlin, and Stockholm. According to the official portal of the Moscow Mayor and Moscow Government, Moscow moved up two spots compared to two years ago. The rating was published by the Financial Times.
Among Eastern European cities, Moscow placed first for the second year in a row in terms of investment attractiveness. Warsaw placed second, and Bucharest took third place.
“The capital of Russia has improved its standing on the reputable investment attractiveness ranking for European cities. This year, Moscow is in the top 5 largest cities on the continent most attractive to investors, and is in the lead among Eastern European cities,” said Vladimir Efimov, Moscow Minister and head of the Department of Economic Policy and Development of Moscow.
The head of the department noted that various benefits and incentives make the city attractive to investors. “By implementing a comprehensive investment support program, Moscow successfully reached the level of leading European cities in terms of how convenient it is to do business here. And thanks to various benefits and incentives provided by the cities, it makes more sense for investors to work here. In many ways, this is why Moscow attracts about 50 percent of all foreign investments coming into Russia annually,” he said.
The Financial Times publishes the rating once every two years. It is based on the publication’s resources dedicated to direct foreign investments. Cities are assessed in accordance with 97 parameters that are split up into categories like economic potential, costs of doing business, infrastructure and how favorable the overall environment is for doing business.
Among subjects of the Russian Federation, Moscow ranked first in terms of the balance of (accumulated) direct investments as of October 1, 2017. Moscow Oblast ($16.3 billion) ranked second in terms of this parameter among regions that make up the Central Federal District of Russia, Lipetsk Oblast ranked third ($14.4 billion), Kaluga Oblast came in fourth ($3 billion), and Tula Oblast was fifth on the list ($1.4 billion).
Thus, Moscow accumulates about half of all foreign investments coming into the Russian Federation. According to data from the Central Bank of Russia, this amounts to about $80 billion annually. This is a very important source of additional investments, because targeted investment programs require large volumes of private investment.
It’s also important that foreign companies don’t succumb to unscrupulous Western media that publish anti-Russian propaganda. Newspapers and news channels often omit, and sometimes outright lie, about what’s actually happening in Russia today, about the country’s economic accomplishments. It’s encouraging that the negativity has not affected business ventures that have been in Russia for a long time. Large and medium-sized companies have no doubts about Russia’s investment appeal.
At the same time, it’s worth noting that foreign investment volumes in Russia have decreased significantly. But as of right now, the situation has stabilized. In the first half of 2017, international statistical services saw a significant increase in trade turnover between Russia and the European Union. Depending on the country, this growth amounted to 20-30%. For Italy, for example, trade turnover grew by 40%.
Italian partners are serious about investing in Russia. When it comes to Moscow, this is due to infrastructure development in the city, and creating a comfortable city atmosphere. The city changes very quickly, right in front of your eyes.
Among other projects, the Italians have taken on the construction of the Dinamo football stadium in Moscow. Hotels and business centers have already been erected. The reconstruction of the park next to the stadium is also in full swing. Construction is being completed under the “Made by Italy” brand. Italian companies are doing this work with support from major Russian banks. Investment amounts total over 1 billion euros. The Italian company Pizzarotti won the tender for the construction of an entertainment complex. The contract amounts to over 200 million euros.
Not so long ago, the Israeli university clinic Hadassah signed an agreement with the Government of Moscow to participate in the construction of a large diagnostic center in the medical cluster in Skolkovo, and the construction of its first building has already been completed. Another undisputed competitive advantage of Moscow is also that it is the main entry point into Russia’s entire economy, as well as the Customs and Eurasian Economic Unions.
Moscow places first in terms of quality of life among Russian regions
Moscow has once again placed first in the quality-of-life index among Russian regions. Like last year, Saint Petersburg placed second, and Moscow Oblast came in third.
“The capital currently accounts for 12 percent of total investment capital in fixed assets and half of all foreign investment in Russia. In 2017, fixed capital investment amounts in Moscow totaled almost two trillion rubles,” said Natalia Sergunina, Deputy Mayor of Moscow in charge of economic policy and land and property regulations.
The capital is also in the lead in terms of salary growth, and has low unemployment levels. According to Vladimir Efimov, Moscow Minister and head of the Department of Economic Policy and Development of Moscow, the number of job openings is currently two times greater than the total number of job seekers.
The industrial production index in Moscow is also increasing. New individual entrepreneur registrations in Moscow is double than the average number of registrations in Russia.
Moreover, the city is working to create a comfortable city atmosphere. The total area covered by “My Street” improvement projects is now over 1,500 hectares. Transportation hasn’t been lagging behind either. The biggest projects in this sphere over the past few years include the launch of the Little Ring of the Moscow Railway, the development of the metro beyond the MKAD, and large-scale road construction.
“Quality of life is one of the most important criteria for attracting investors. As the socio-economic, educational, and transportation center of Russia, Moscow is also the center for attracting Russian and foreign investments that stimulate the city’s continuous development,” Vladimir Efimov said.
The quality of life rating for Russian regions takes into account parameters like income and education levels, employment and the labor market, housing, demographics, climate, and environmental factors. Moreover, criteria included resident health, level of economic development, access to social infrastructure, and transport development.