Infrastructure: Build Russia a boom before it breaks down
Russia’s infrastructure will cost trillions of dollars to fix. How are bankers and investors looking to profit from the rebuilding?
The economy is in good shape, which is more than can be said for the country’s infrastructure. Links for land, sea and air transport are rapidly falling apart and are expected to cost trillions of dollars to fix.
IN ECONOMIC TERMS Russia has charged ahead since the turn of the century, registering annual economic growth of more than 7% on the back of growing demand for commodities from abroad and rising consumption at home.
But as anyone who has used the country’s roads, railways, ports or airports can testify, the dilapidated Soviet-era infrastructure is clearly failing to keep pace with the increasing demands being placed upon it. The bill for fixing Russia’s infrastructure problems is forecast to run into trillions of dollars over the next couple of decades alone.
And while the government’s coffers are full to overflowing thanks to rising tax revenues, the authorities in the Kremlin recognize that only by harnessing private-sector capital and expertise can they ensure that their infrastructure development plans are turned into reality.
The good news for the government is that bankers and investors are increasingly excited about the prospect of a Russian infrastructure boom and are positioning themselves to take advantage.