RUSSIA'S VENTURE CAPITAL RENAISSANCE
For a country with one of the world's largest scientific communities, responsible for thousands of innovations and technical breakthroughs over the past century, Russia has had a remarkable absence of entrepreneurship. Largely caused by the dictates of communism, which restricted individual aspiration, this peculiar lack is finally being recognised by the Russian government. A government-sponsored fund of $500m has been announced, dedicated to supporting venture capital projects, with special economic zones established to offer both Russian and foreign companies customs and tax breaks for up to 20 years. Already, 10 funds have received funding from this source, matching that being offered from private industry, meaning that a total of US$1bn will pour into venture capital coffers in the coming months, according to Sergey Romashov, head of private equity at VTB Asset Management. His company is managing the first of these funds and expects to announce further funds in the coming months.
Source: RUSSIA'S VENTURE CAPITAL RENAISSANCE David Nicholson. European Venture Capital & Private Equity Journal. London: Dec 2007/Jan 2008. Pg. 10
Russia's evolution from its Soviet past and from the chaotic early days of democracy has been swift. Over the past 10 years, as Russia has transformed itself from a centrally controlled Soviet system to a modern market-driven economy, a completely new class of domestic entrepreneurs has emerged. Briefly, it is rather remarkable that Russia's economy has expanded an average 7% over the past five years, despite negative population growth and a per capita income of US$7,000 - a relatively high base compared with most other developing countries. That dynamic has made Russia an attractive destination for foreign direct investment, or FDI. This year about US$30bn in FDI is expected to flow into the country, with most of it headed toward the non-oil economy. To be sure, the bull market in oil is not insignificant in fuelling the demand surge. However, the Russian economic renaissance story goes well beyond oil.
Source: OPPORTUNITY AWAITS Rohit Chawdhry. European Venture Capital & Private Equity Journal. London: Dec 2007/Jan 2008. Pg. 6
Ukraine reports notable increase in direct foreign investment
The increase in foreign direct investments (FDI) in Ukraine amounted to 2.553bn dollars for the period of January-June 2007, which is 50.3 per cent more than in the same period in 2006, the State Statistics Committee reported on Friday [17 August].
The committee said that foreigners invested 3,276.3m dollars directly in Ukraine's economy in the first half of the year, but at the same time took out 820.3m dollars.
Overall FDI in Ukraine totalled 24.172bn dollars as of 1 July, having increased by 11.8 per cent since the beginning of the year and reaching 518.6 dollars per capita.
Source: Interfax-Ukraine news agency, Kiev, in Russian 1206 17 Aug 07