POLITICAL BACKGROUND

RUSSIA FORM OF GOVERNMENT

Type of Government: Federal Republic

The 1993 Constitution declares Russia a democratic federative state based on the rule of the law and a republication from of government. Source: PricewaterhouseCooper (2009) Doing business and investing in the Russian Federation. Russia. http://www.pwc.com/ru/en/doing-business-in-russia/index.jhtml [24.3.2010]

GOVERNMENT STRUCTURE AND HOW IT OPERATES

The 1993 Constitution declare Russia a democratic federative state based on the rule of law and a republican form of government. State power in Russia is divided among the executive, legislative and judicial branches.

The President of the Russia is considered to be the head of the state where he is responsible for approving the major decision which are taken by the Prime Minister.

The Prime Minister of the Russia is considered to be the head of the state where he is responsible for approving the major decision which are taken by the Prime Minister.

The Government which comprises prime minister, deputy minister and minister of Russia is responsible for exercising the executive power.

The government along with the federal assembly of the Russia is vested with the legislative power.

The Legislature consist of bicameral Federal Assembly:

State duma is the lower house or parliament which can draft legislation and amend the constitution and file an impeachment against president but cannot put in force directly.

Federation Counsil is the upper house and has the power to approve or reject laws adopted by the state Duma.

Source: PricewaterhouseCooper (2009) Doing business and investing in the Russian Federation. Russia. http://www.pwc.com/ru/en/doing-business-in-russia/index.jhtml [24.3.2010]

INTERNATIONAL RELATION WITH OTHER COUNTRIES

Participation in various international organizations

Russia has steadily moved from initial pro-western policy towards one that combined elements of co-operation with West (especially on economic issues) and attempts to reassert Russia’s status as a great power with distinct interest.

Russia is a part of the European Union and it accounts to be its main economic partner at the same time it accounts for more than half of its external trade, the bulk of its energy exports and most foreign investment inflows.

Russia has its presence with the Asian powers such as China and India. China is still likely to overtake Germany as Russia main trading partner in the next few years. At the same time china could become an important export market of Russian energy, although Russia remains wary of china rise as an economic power.

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CORRUPTION & BRIBES

According to the Russian Economic Report 2008, there has been seen an 8% growth in the economy of Russia and due to which it has witnesse economic growth over the past years.

Source: World Bank 2008, Russian economic report [online], Available from: http://siteresources.worldbank.org/INTRUSSIANFEDERATION/Resources/rer17_eng.pdf [Accessed: 31.3.2010].

The lack of trust in institution and corruption has affected the confidence of the investor in spite of a massive economic stimulus package given by the Russian government.

According to the Institute for Public Project (INOP) along with Institute for Comparative Social Research (CESSI) in their price list of bribes has cite large companies as a major barrier in doing the business in Russia.

Source: Business anti-corruption portal 2009, Russia Country Profile [online], Denmark, Available from: http://www.business-anti-corruption.eu/index.php?id=9085 [Accessed: 25.3.2010].

• According to the Global Competitiveness Report 2009-2010, “the business executives which were surveyed the corruption was the key factor identified as the most problematic factor in doing business in Russia.
• According to a CDI 2008 report on this price-list, the private players will have to pay USD 1-5 in order to get licence and one third of the order price to win a government contract”.
• The Economist reported in late 2008, reported that USD 10,000 to USD 130,000 was the increased size of the average bribe business
• According to the Public Opinion Foundation survey, in 2008 around 56% of the business people polled pay bribes.
• A 2008 survey conducted by the Public Opinion Foundation reveals that 56% of the businesspeople polled pay bribes. Due to more corruption and weak rule of law foreign companies find trade and investment as unattractive in Russia.
• According to the World Bank & IFC Enterprise Surveys 2009, over 29.4% of the unofficial payment are done by companies to get their work done.
• According to the INDEM reports and Bribe Payers Index 2008, 80% of all Russian companies pay bribes and mostly when doing business abroad.
• Companies that plans to invest or when operate in Russia must strengthen integrity system and to conduct extensive du diligence.

Source: Business anti-corruption portal 2009, Russia Country Profile [online], Denmark, Available from: http://www.business-anti-corruption.eu/index.php?id=9085 [Accessed: 25.3.2010].

Russian Federation 2009

Corruption 2006 [online], Available from: http://www.enterprisesurveys.org/ExploreEconomies /?economyid=159&year=2009 [Accessed: 28.4.2010].