Moscow isn’t slowing down despite recent economic struggles in Russia.
Thanks to lowered administrative barriers, Moscow’s World Bank “Doing Business” ratings is set to improve. The “Doing Business” rating is an annual World Bank ranking that reviews 189 countries based on how easy it is to do business in these countries. Countries are assessed based on how easy it is to start a business, register property, get electricity, pay taxes and some other factors.
Despite recent economic struggles, Russia’s World Bank “Doing Business” rating has experienced consistent increase in the past years, going from the 92nd position in 2013 to the 62nd position in 2014. This rating further increased to the 51st position in 2015. This is on the heel of improving economic conditions in Russia.
The current ranking isn’t far from Russian President Vladimir Putin’s goal; in 2012, Putin set a goal to increase the country’s rankings to the 50th position by 2015 and to the 20th position by 2018.
Apparently, despite sanctions and economic struggles, Russia has been able to implement economic reforms that have made the country more appealing to investors. According to the World Bank, Russia ranks 5th in the world for enforcing contracts and 8th in the world for ease of registering property.
In light of this development, Moscow Investors Association recently started an advertising campaign to attract investors from the United States; this campaign has featured multiple advertisements in major US media outlets like the Washington Post, with the aim of attracting foreign investment to Moscow.
The campaign, captioned “Moscow is Doing Business” is aimed at capitalizing on Moscow’s current record growth and improved World Bank ratings. The campaign highlights various facts, and includes bold promises such as “the urban development potential of New Moscow is over 1 billion sq. ft. Over 430 miles of roads and more than 30 miles of metro lines will be built by 2035.”
Data from PricewaterhouseCoopers (PwC) shows that Moscow is now ahead of London and New York in terms of new construction output, and it is also ranked the greenest city among the three major capitals. JustBuild also reveals that Q2 investment in Moscow real estate increased by 37 percent compared to Q1 investment for this year.
Currently, 89 percent of Moscow’s real estate is funded by investors, compared to just 11 percent from the city budget, and the recent World Bank ratings improvement and lowered administrative barriers will further increase the percentage of real estate growth in Moscow funded by investors.