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WHY RUSSIAN MARKET?

RUSSIAN MARKET

RUSSIAN FEDERATION
·  Population: 150 mil.
·  8th largest population worldwide
·  Annual economic growth rate of +6,5%
·  Annual increase of per capita income +26,5%
·  3 mil university students
·  Largest supplier of natural resources
·  LARGEST country in the world
   [06/30/2006]

Russia has for many years been a land of mystery and intrigue to the people of the West. For hundreds of years it has been an enigma, friend, or enemy, as the political winds here and there blew in changing directions.  As in any situation where new relationships are being formed we have found that we didn't know at least as much as we did know.  That being said we have found that people everywhere have much in common. We found that Russians as a people are interested in many of the same things as any other people. They wish a better life for themselves, self determination, and pride in self and country.

New freedoms in most areas of life are bringing new opportunities for Russians, as well as visitors, for business and pleasure.  Russian society and culture have opened up bringing the opportunity to visit and do business.  For the first time there is freedom of employment, religion, and opportunity for all citizens. These changes allow opportunity for unprecedented success and failure.

Because of the rapid changes in the economy, it is still easier to find capitol, Russian partners, and good management for a big project than a small one. However this is beginning to change and will continue to do so as more and more of the economy is market driven, and as the pool of local management and capitol grows.

Russia with its vast oil reserves, natural gas and metals is the world's second largest exporter of oil (after Saudi Arabia).  While record oil prices have hurt consumers in many regions around the globe, Russia and those that have invested there have prospered. The flow of money has helped the growth of Russian corporations in other sectors.

The Russian consumer market is booming:

Russia's economy and stock market have grown at rates not found in the world's largest and most stable markets. Russia's economic state has left room for significant growth potential, which is only now being realized. There is still room in this market for new players, in the country with 150 million people there is enough space for everyone. The ongoing boom will continue for another three to five years.

There are three options of entering the Russian market: opening a new affiliate location, acquiring an existing one or launching a partnership with one of the market players.

Growth has been disproportionately centered on large corporations, as barriers of entry remain high. The country continues to have poor banking and economic policies. This may help the short-term international investor - who can now expect outstanding returns in Russia's most stable industries - but not for the country's long-term economic situation.

Due to the extraordinary political changes in Russia, and changing attitudes in the USA, it is now possible for individuals and companies to do business in Russia and Eastern Europe.

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