UK-Russia: Trade and Investment panel at the London Business School
Last week I participated in a panel discussion about the investment prospects of Russia and the trade relationship between Russia and the UK. The event was held at the London Business School (LBS), I was joined on the panel by Liam Halligan, Editor-at-Large at Business New Europe, and Trevor Barton, Executive Director of the Russo-British Chamber of Commerce. The event was chaired by Elias Papaioannou, Associate Professor of Economics at LBS.
In general, it was agreed that the devaluation of the Rouble, drop in the price of oil, and the international sanctions have made trade and investment more difficult in the short-term.
However, it is equally important to consider some of the other country’s fundamentals including an increasing diversification of sectors, a strong government balance sheet, and a big improvement in the country’s ranking for ‘ease of doing business’.
The potential for investment and deal flow which can be generated in Russia is significant in the long-term. Even now, some sector valuations are starting to look increasingly attractive. We are also likely to see some benefits from the devaluation of the currency, and sectors which are highly labour-intensive will develop a competitive advantage.
Despite the frequently reported news that Russia is establishing relationships with China and India, the levels of trade between the EU and Russia are too considerable to be written off. Even in the current turbulent times, EU-Russia trade was still 34% bigger in 2014 than it was in 2010.
While some people choose to hold a negative view of Russia, I believe that the Russian market holds great opportunities when taking a long-term approach.
I enjoyed responding to the questions from the well-informed audience, and welcome any other thoughts from my readers here.