A corporate governance shortfall
Russia defaulting on its domestic debt in 1998 might seem like a distant memory, but one economic problem keeps coming up, and is stifling foreign investment: poor corporate governance.
This, says Alexander Ikonnikov, executive director of the Russian Investor Protection Association, is the most pressing issue facing Russian businesses: "Corporate governance is crucial to the strengthening of Russia's economic and financial system, and in promoting transparency and investor confidence," he said at the fourth annual Russian Economic Forum in London last month.
But there is very little confidence that anything is being done. "Until there is a real commitment to improving standards of corporate governance in Russia, gaining foreign investment will continue to be a problem," says Jan Daumann, president of CET InterMatrix, an investment consultancy.
There might even be an appetite abroad to invest in Russian companies, if they demonstrated a willingness to move on this issue, explains Paul Melling, an international partner with law firm Baker and McKenzie.