Survey: Russia's economy not competitive

The World Economic Forum index of Global Competitiveness ranked Russia 58th in its global index. moving up one place from 59 last year.

The United States  topped the list. The survey ranks countries according to their potential for economic growth.

Russia is struggling to make its economy more competitive according to the World Economic Forum. But it misses many of the positives that attract investors. 

The index, which assesses infrastructure, labour markets, competition and more, in 130 countries, has concluded that Russia still has a long way to go.

“Of major concern is perceived lack of government efficiency, lack of independence of the judiciary in meting out justice, and more general concerns about government favouritism in its dealings with the private sector,” says the World Economic Forum report.

The U.S. Chamber of Commerce in Russia says government efficiency is a real problem, mainly because the country lacks a clear administrative regime for business.

“Companies are often caught by surprise by regulations which are suddenly enforced, or regulations that come out without either sufficient warning or without the participation of the business community,” said Andrew Somers, the president of the American Chamber of Commerce in Moscow.

But Somers says Russia's low ranking does not accurately reflect the sentiment of those investors who really know the market.

“I think perhaps the conclusions should have been weighted a bit, the way surveys are weighted, to reflect a certain discount for the perspectives of those who have not come into the market, and perhaps a premium on the views of those who have,” added Mr Somers.

Many foreign investors who are active on the Russian market say the image of the country abroad is very different from the reality, and the reality is that despite the need for ongoing reforms, the returns on investment in Russia are among the highest in the world.