In the early stages of World War I, Henry Ford launched his chartered Peace Ship, which sailed to Europe with several prominent pacifists on board. He wanted to appeal to heads of state to get the troops out of the trenches by Christmas. Three weeks later, Ford was back in the United States.“I didn't get much peace”, he said, “but I learned that Russia is going to be a great market for tractors”.
Isn't a shrewd business approach one that should be followed even during turbulent times?
Of course, sectoral and other sanctions have had their effect on Russia. According to the 18th edition of PwC’s Annual Global CEO Survey presented in January 2015, few Russian top managers (16%) are very confident about their companies’ prospects for revenue growth over the next 12 months. Furthermore, 63% of Russian CEOs agree or strongly agree that the number of threats facing their businesses has increased.
Of course, Russia is not corruption-free, and bureaucracy and administrative barriers have damaged the country's reputation.
However, significant progress has been made within the last decade to eradicate these obvious obstacles to doing business.
And I have no doubt that Russia today remains a place where one can always find, if not “a great market for tractors”, then a market for other products or services. Everybody who is determined not to lose a major business opportunity must have a noticeable presence here.
We have been operating in Russia for more than 25 years and now have over 2,700 clients. In cooperation with our global network of firms, PwC Russia has participated in an impressive number of investment projects, which have attracted almost USD 25 billion into the Russian economy.
And we don’t have any plans to curtail our activities. In 2015, our new office in Ufa becomes our 11th here. In Ufa, as well as in Moscow, St Petersburg, Ekaterinburg, Kazan, Novosibirsk, Rostov-on-Don, Krasnodar, Voronezh, Yuzhno-Sakhalinsk and Vladikavkaz – in fact, everywhere in this huge country – you can be sure that PwC Russia's more than 2,500 employees are always there to help you do business.
And, even more importantly, our job is to help you do it even more efficiently.
Igor Lotakov, Managing Partner, PwC Russia
"Russia’s strength and diversity are concentrated in its regions, which boast some of the Earth’s richest reserves of natural resources, highly developed infrastructure, and unique human capital resources. Each region has its own specific characteristics, its own special “edge”. This opens up an enormous potential for new business projects. Plus, each region has established its own strong, resilient business community, which has demonstrated an eagerness to innovate and build equal partnerships. We are seeing how a number of large-scale projects are becoming a reality, how new markets and technologies are being discovered, and how new heroes are being born."
"I have found Russia to be a vibrant, exciting place to live; one that’s full of great opportunities. For those looking to do business here, I would strongly advise making contacts among the local business community to build up a network that can help you to navigate through the system. A client of mine recently moved into a new role and I was able to introduce him to others in the oil and gas sector. This has proved invaluable because, trust me, Siberia can be every bit as daunting as it sounds!"
"The Russian economy is going through a difficult period. While most commentators have an uncertain view of its future prospects, and business is being very cautious, I do see some solidly positive aspects of the current situation. One is that Russia’s economy is getting rid of inefficiencies at all levels, including in government spending. In addition, there is an enormous push for localisation of production, which will help diversify the economy. Russia has talent. And, the country’s history has been full of challenging situations. So, I’m confident that Russia will come through this one even stronger."
"Should one invest in Russia’s banking sector? Is this even feasible in the current climate, or would it be wiser to take a “wait and see” approach?
These are the questions that potential investors are inevitably asking these days. But I’m convinced that the new economic reality creates new opportunities for business development.
When a market is complicated, and many are cautious about its prospects, that’s precisely the time for making well-conceived, well-thoughtout investments, building relationships with new partners and revisiting old alliances."
"Among all elements of the fiscal system, customs is one of the most affected due to recent international and economic changes. This, in turn, has triggered changes in customs regulations and practices. These challenges are still manageable but they do require understanding of the local environment and specific issues.”
"The restrictions on import of certain products imposed by the Russian government affected the market for those products, creating shortages and leading to price increases. They did, however, also create entrepreneurial opportunities for the local development, production and sourcing of the sanctioned products. This is definitely a strong potential field for investments."