Assessment of the Business Climate in Russia

The Global Competitiveness Report 2013-2014 has been published. Its findings are virtually the same as in the report for the previous year which was analyzed in the Gaidar Institute’s August Review. In the business climate, the most difficult sitution for more than a single year has prevailed in such lines as weak protection of ownership rights, lack of independence of courts and corruption at courts, excessive state regulation burden, ineffective security of an individual, low level of corporate culture, weak competition, preservation of administrative barriers and high tax burden and inconsistent taxation. In other words, all the factors which make business feel insecure about the future and determine an underlying motive to withdraw capital abroad rather than invest in development of business in Russia still remain in place. A favorable situation is registered in macroeconomics (as long as prices on hydrocarbons do not fall) and quite a good one in the infrastructure (unless the situation with motor roads is considered a failure), secondary and higher education and retraining. Generally, Russia moved from the 67th place to the 64th place (the 63rd place in 2010 and the 51st place in 2008). It is to be noted that improvement also took place in the most painful aspects of the business climate though there were no explicit progress factors. The higher rating place can be explained by both expectations, including those not to change taxes and a certain lag of published materials from the statistical data and some information events in 2013