Tuesday, August 22 2017 13:48
Alexandr Avanesov

EADB: After three years of falling, mutual investment in the Eurasian Economic Union began to grow - mutual FDI of the EEA increased by 16%

EADB: After three years of falling, mutual investment in the Eurasian Economic Union began to grow - mutual FDI of the EEA increased by 16%

ArmInfo. The latest data show that, despite the fact of the reduction in the economies of the countries of the Eurasian Economic Union (EAEC) in 2016, the mutual investments of the EAPC member countries have already begun to grow. After three years (2013-2015), the fall in mutual FDI of the EEA countries grew by 15.9% - to $ 26.8 billion.

Such data are contained in the report prepared by the Center for Integration Studies of the EADB .It is quite expected that the largest exporters of capital in the EEA were Russian companies - they accounted for over 78% of FDI exports. On the second place Kazakhstan (13.5%), on the third - Belarus (7.8%). Armenia and Kyrgyzstan have yielded significantly to the largest economies of the EEU.

The new phenomenon is that Russia has begun not only to direct its investments to other EEA countries, but also to receive more and more investments from its neighbors: the accumulated volume of direct investments from other EEU countries reached 5 billion US dollars. Nevertheless, Belarus ($ 8.6 billion by the end of 2016) and Kazakhstan ($ 8.2 billion by the end of 2016) are still the main recipients of FDI.  According to the authors of the report, a limited number of companies provide high performance in Russia.  As of the beginning of 2017, the top 25 Russian companies investing in the EEA countries accounted for 71% of all accumulated FDI in the EEU, and for the 25 largest projects of Russian companies, about 61% of all accumulated mutual FDI in the EEU.

 Analysts of the EDB believe that deepening the Eurasian integration in the EEU and building common markets will gradually change the picture of corporate interaction. In the meantime, the advantages of the EAPS are mainly used by large investor companies. For large businesses, cross-border barriers are less painful: the resources of companies can effectively overcome them. The average business is not going abroad yet. "Medium-sized companies are more limited in both cash and administrative resources.  The single market provides them  with a wider range of opportunities to build value chains and scale up their business activity, "said EDB Director Yevgeny Vinokurov. - Medium business is still inactive. At the same time, in 2016, medium-sized companies from Kazakhstan and Belarus were able to increase capital in the partner countries of the EEU: their investments in the agro-food complex, construction, IT and trade increased. "Where do Russia's neighbors invest in the Eurasian Union? At the first place- chemical complex of the Russian economy (35.1% of the volume of imported FDI from the EEU countries as of the end of 2016).

The second one is the agro-food complex of Russia (15.8%), where the main volume of investments was provided by Kazakhstan companies specializing in crop production and dairy production. Direct investments from Kazakhstan to Russian airports provided the transport complex with the third place (14.2%). The participation of Kazakhstan investors in the Russian hotel business allowed the tourist complex to gain a foothold in the fourth position (14%). Russian companies have increased FDI in all countries of the Eurasian Union. At the beginning of 2017, Belarus ($ 8.5 billion) is the leader in the import of Russian FDI. This is followed by Kazakhstan ($ 8.2 billion), Armenia ($ 3.4 billion) and Kyrgyzstan ($ 0.9 billion). More than half of Russia's FDI in the EEU countries is in the fuel complex.

A significant place is occupied by FDI in non-ferrous metallurgy, communications and IT, financial sector.  For the first full year

after joining the Eurasian Union, Kyrgyzstan showed an 11% increase in FDI inflows from the EEU countries (up to $ 1.5 billion by the end of 2016), including from Russia - by 21% (to $ 0.9 billion By the end of 2016). EADB experts expect that membership in the EEMP will allow Kyrgyzstan to improve its investment image, and predict the growth of Russian and Kazakhstani direct investments.

 With these and other data, analytics and applied conclusions it will be possible to familiarize with the report "Monitoring of mutual investments in the CIS countries - 2017", the output of which is planned for October of this year. The report will help companies better orientate themselves in the business space of the region, and help the states promote mutually beneficial industry cooperation.

The Eurasian Development Bank (EDB) is an international financial organization established by Russia and Kazakhstan in January 2006 to promote the development of the market economy of the participating countries, their sustainable economic growth and the expansion of mutual trade and economic ties. The authorized capital of the EDB is 7 billion US dollars. The Member States of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation and the Republic of Tajikistan

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