Country analysis of The Democratic Republic of Congo Essay

This location allows grief from neighboring countries on the other hand it is in an ideal location by way of trade routes to other countries and access to the Atlantic Ocean and the Congo River. The Democratic Republic of Congo is also dense with valuable minerals making it regarded as one of the richest countries as ar as natural recourses go. However, it is one of the poorest countries in the world In 1998, the second Congo war began, this war was also known as â€Å"The African world war†. It directly involved nine other African nations: Rwanda, Burundi, Uganda, Angola, Zimbabwe, Namibia, and a few others. The war started because neighboring countries as well as citizens of the Democratic Republic of Congo wanted to gain some of the minerals and natural resources from the nation originally creating a civil war which spread to other nations, sucking them in and starting a full out war between the countries. The war officially ended in 2003 however; battles and bitterness still resound and cause mass conflict between the African nations today. This war is said to be the worst conflict since World War II. Around five and a half million people have been killed so far due to this conflict. About 90% of the victims were not killed in battle. They passed on due to ravaging diseases such as malaria. They also died from pneumonia and malnutrition. These reasons for death were brought up by displaced populations living in unsanitary, heavily over populated conditions and were denied access to food, water, medicine, and shelter. This ongoing war has devastated a nation that in theory could be a rich, well off nation. The Democratic Republic of Congo has mass amounts of untapped raw mineral deposits. These deposits are worth 24 trillion dollars. This nation contains 30% of the world’s diamond reserves and 70% of the world’s coltan. There are also enormous reserves of gold, copper, and cobalt. The mineral extraction is done in a process known as â€Å"artisanal and small scale mining†. Mining has created severe problems in the Democratic Republic of Congo. There were many illegal organizations profiting off the mines. Because of this, the government shut down the eastern part of the country to mining. During the war, many of the commanders were making illegal trades with foreign countries with their minerals and natural resources. This trading was labeled as â€Å"mass scale looting†. When the mass scale looting died down soldiers were then encouraged to take part in small scale looting. This brought forth the â€Å"active and extraction phase†. Because of all this looting, there were large amounts of inflation. The Congolese government lost much of their profits from Uganda and Rwanda to transport their resources. They often exported diamonds and coltan out of the country. They would then repackage the diamonds and â€Å"legally’ sell them as it they were from their own country. Rwandan soldiers made around 20 million dollars a month from smuggling resources out of the Democratic Republic of Congo. These large mining operations attract migrant workers. Many people migrate to The Democratic Republic of Congo as well to escape the violence in the Great Lakes region. The number of immigrants has been rapidly decreasing over the years. The mass amounts of immigrants have taken over the work force there. In recent years immigrants are starting to migrate to the European nations rather than other nations in Africa. Due to the dense population and poor living conditions, poverty runs rampant through this nation. This also means there are large amounts of crime even though there is a police force, the Congolese national police force. One of the most prevalent crimes in this area is of rape and sexual slavery. The Democratic Republic of Congo is known as â€Å"the rape capital of the world†. With the recent war, the numbers of rape victims have drastically increased. Although the Congolese law rohibits rape these laws are almost never enforced. Rape was a main weapon used in the Second Congo war, which started this ongoing epidemic of sexual violence. Prostitution and human trafficking are prohibited and have a penalty of twenty years in Jail according to the law. However, there will be years where there is not a single investigation of either of these. Proving that the laws are not as heavily enforced in these areas, as they should be. There are also no laws against spousal abuse. This lack of law enforcement is brought up by the lack of a stable and secure government rom the ongoing war. Left with an insecure government the nation is slowly starting to repair itself. The Lusaka Peace Accords set up a government system in 1999. A president was finally elected in 2006. The economy is starting to take a turn for the bright side but it is still wrought with poverty and a failing economy due to the war and mining conflicts. Due to the violence and unstable government, there are few markets and public services. This does not allow farmers to be able to sell their own goods. It forces civilians to fend for themselves. Due to the lack of public services, here are very few hospitals and medicals centers. Disease runs rampant through this nation. Since this nation is so heavily populates diseases spread easily through the communities. There are vast amounts of major health problems in this region including; HIV, aids, malaria, polio outbreaks, cholera, typhoid, yellow fever, the Ebola virus, hemorrhagic fever, and tuberculosis. Many of the illnesses are from poor living conditions, living in filth and with bugs. Diseases are spread through bug bites. Diseases like HIV and Aids are easily spread through a multitude of ways. Diseases re spread through the movement of soldiers and refugees, few HIV testing sites, mass amounts of untreated sexual diseases, human trafficking, sexual abuse, prostitution, and diseased blood transfusions. Due to the ongoing wars and conflicts, it has made it difficult to set up an organization for stopping the spread of these diseases. Because of how poor the civilians are, they have no money for medical help, which is expensive and required to be paid in advance in full cash. The Democratic Republic of Congo is not only rich with minerals but is also a great agricultural location. The general temperature ranges between 68 and 86 degrees Fahrenheit. It is a region covered with rainforest and savanna areas. The farming is done mainly in the open savanna areas. Some of the major cash crops include peanuts, beans, bananas, plantains, rice, yams, and sugarcane. Cottee is also a major crop grown here. It is one of the most exported natural resource. Most of the farming is done through the Feronia Arable Farming division. Smaller farmers often use the slash and burn method of farming nearer the rainforest. This method however, is destroying the environment and the rainforest. Using the slash and burn method it takes around fifteen years before the burned field can recover and be used again making the farmers cut down more and more of the rainforest to sustain products and and income. The Democratic Republic of Congo is an up and coming nation it requires vast amounts of revision with the nation’s government system, the conflicts with other countries need to be amended, and laws should be more strictly enforced to create a working nation. The DRC has the potential to be one of the richest nations in Africa by way of its large mineral reserves and demand on the natural resources cultivated here. Major reforms need to be made before this country thrives.

Alcoholism and its Effects essays

Alcoholism and its Effects essays Alcoholism is when there is a progressive, excessive inappropriate drinking of alcohol. Alcoholism is thought to come from a combination of a huge range of psychological, social, and genetic factors. Alcoholism comes from emotional and sometimes physical dependence, but the alcohol normally leads to brain damage or early death. Ten percent of adult of adult drinkers in the U.S. are considered alcoholics or they experience drinking problems to some extent. There are more male alcoholics than females here in the U.S. and some other North and South American Countries, but drinking among the young and women is growing more and more by the years. Alcohol has a toxic as well as strong effects on the body, and not being able to take care of nutritional and other physical needs during prolonged periods of excessive drinking may complicate the drinker, and in some cases hospitalization. The alcohol effects many major organs and include a wide range of digestive-system disorders such as ulcers, inflammation from the pancreas, and cirrhosis from the liver, and damage to the central and peripheral nervous systems can be permanently damaged. Delirium Tremens which are series of illnesses such as loss of appetite, mental confusion, hallucinations, extreme perspiration, tremors, heart failure, pneumonia, and respiratory infections; all of these illnesses usually result in death. Recent evidence shows that heavy and even moderate drinking during pregnancy can cause serious damage to the unborn child (fetus) such as physical or mental retardation or both. FAS, is a mild to severe mental and physical damage to the fetus is caused by the mother's use of alcohol during pregnancy. FAS affects about 1 to 3 in every 1000 births worldwide, and its the leading cause of mental retardation in the Western World. Kids with this horrible syndrome are sma ...

[WATCH] How women can advance in their careers despite failure

[WATCH] How women can advance in their careers despite failure Daily Fuel sat down with the President and CEO of one of the nation’s leading women’s business organizations; Terry Barclay of Inforum.   Terry shares the best advice she can offer to any aspiring professional, and provides some fascinating statistics involving women and their ability to advance in their careers.And while Terry is specifically speaking to women, her insights apply to everyone.   Listen as she talks about the importance of courage and how our ability to summon it at crucial moments at work can often determine whether we will lead the lives we imagine for ourselves.Source: [DailyFuel]

The Evolution of Terrorism Essay Example | Topics and Well Written Essays - 1250 words

The Evolution of Terrorism - Essay Example This is partly because of the changing historical elements of terrorism, especially the exercise of terror by perpetrators within a certain political and social setting. This essay identifies the significant historical elements of terrorism and how they have evolved since the attacks of 2001. The 9/11 attacks on the Pentagon and the World Trade Center revealed that the historical elements of terrorism had drastically transformed. Nowadays, terrorists are involved in a spate of mass murder and suicide across the globe. In the past it had been reasonable to think that there were boundaries that terrorists would not dare go beyond. After the large number of casualties on the 11th of September 2001, it was clear that there are terrorist groups that would dare break boundaries. Terrorism in the past was different from that after 9/11. The history of terrorism is not only Middle Eastern but also European, and not only religious but also nonreligious. However, there are several common elements that can be identified in the evolution of the elements of terrorism. The 9/11 attacks were a threatening new turn in an ancient tale of obsession with political violence and terror. The term ‘terrorism’ became part of the European vocabulary after the 1789 French Revolution. In the initial revolutionary period, it was mainly through violence and terror that the French governments attempted to force their revolutionary new order onto the hesitant masses. Consequently, the original definition of ‘terrorism’ was ‘rule of terror’ (Coaty 9). Such definition works as a powerful message that terror is usually at its most violent when exercised by dictatorial regimes against their own citizenry. However, in the 19th century, terrorism went through a historic evolution, becoming linked, as it remains until now, to nongovernmental organizations.

An ethical analysis of the September 11 attacks Essay

An ethical analysis of the September 11 attacks - Essay Example These attacks were however carried out by Muslim extremists whose ideals were not representative of the Muslim sentiment as a whole. Nevertheless, this attack created a significant rift between the US and the Muslim community. There are various explanations which have been suggested in order to make sense of this attack. These explanations always return to the core issues of terrorism and Muslim extremism. This analysis shall now consider two approaches (Marxism and Realism) to the incident, evaluating the ethics of the situation. The US policy in relation to the developing world soon after the 9/11 attacks shall be the main focus of this analysis, utilizing Marxist and Realist approaches to ethical assessment. The 9/11 terrorist attack and the subsequent War on Terror and the Iraqi War led to instances of western bigotry against the east (Bai). Based on the need to react to the atrocities perpetrated by the Muslim followers, the attacks might be understandable, however, such racism is often carried over to designate Marxism (MacGregor and Zarembka). Some analysts have mentioned, without any sufficient reason for religious fundamentalism in the East, they labeled such religions and practices as the source of crazy fundamentalism, labeling Marxism with the same negative connotation (MacGregor and Zarembka). The 9/11 report on the attacks also established similar connotations, and blamed all the problems on the underachievement and jealousy issues of eastern working class citizens. There are arguments which hold Marxism to task for being too western a philosophy (MacGregor and Zarembka). Edward Said (p. 153) claims that Marxism views Asia as a group entity, not as a plurality of individuals with varying and diverse identities. He does not acknowledge that Marx seems to apply the same ideals to England and India (Said, p. 154). Such criticism may also be based on Marx’s perception of the working class and the bourgeoisie of England where they are grouped to gether based on class. While Said might justifiably accuse Marx with an overall view of class struggle, Marx would likely agree to these same precepts (Said, p. 153). The Marxist theory often supports leftist ideals and has always acknowledged that states operate to protect the interest of the economic working class (Owusu, p. 3). Marxist commentators agree to the outcomes of the 9/11 attacks, most of them are not willing to agree that 9/11 in a manner which was not validated by the US officials; in effect, they discount the possibility of conspiracy of capitalists (Owusu, p. 3). Although the attack established a means for the US to undertake military action, no thought was given to the fact that the attack may have been based on state actions (Owusu, p. 3). However, in general, the Marxist connotations do not support a planned and convoluted action by the US. Marxism is based on economic and sociopolitical ideals which highlight the materialist evaluation of history, and a critique on the development of capitalism (Callinicos, p. 5). In reviewing the 9/11 attacks, terrorism was built on economic hardships, mostly exacerbated by the dominance of capitalism and Western capitalism in the developing countries (Carmody, p. 85). These terrorists believe that their economic

Techniques used in landscape interpretations Essay

Techniques used in landscape interpretations - Essay Example might not pay that much attention to the castle itself and try to set his/her attention to the way the castle builders included and used natural elements of the land to their advantage. All these different interpretations means that there is no single unified technique to examine a landscape and as there are hundreds of landscapes and thousands of interpretations which can be made of those landscapes a singular technique might be impossible to come by. At the same time, there are various schools of thought which lead a person to apply some basic interpretive methods that further allow them to come up with a singular interpretation for a particular scene. Towards that purpose it is essential for us to understand and appreciate the modern methods of landscape interpretations which are discussed in this paper along. These interpretative techniques have been mentioned by architects, artists and scientists who have utilized these methods to study landscapes around the world. Normally, the first step in examining any given landscape is to actually look at the landscape with the naked eye. Of course this may not be possible in certain situations like interpreting the landscapes of other planets or subterranean structures but in most topographical analysis situations it is certainly a clear possibility. Dennis (2003) gives a very interesting approach to this subject by giving four ways to deliberately look at a landscape. The visual ideology of a landscape is the first element which can be created in the mind of the person who is trying to interpret a landscape. The visual ideology often masks the social conditions which produced the landscape in the first place but by paying close attention to the attention, a person can get to the superficial meaning embedded in the landscape. This signifies the material landscape as the representation of the natural order which is present in the scene and also clarifies any social relations which can be seen from the ideology which

Effect of Foreign Direct Investment in the Retailing Sector

Effect of Foreign Direct Investment in the Retailing Sector The effect of foreign direct investment in the retailing sector  on the economy of Russia Abstract Following the dramatic, although sometime erratic growth of the retail sector in Russia, this paper provides an insight into the growth of this sector of the Russian economy, particularly concentrating upon the impact of foreign direct investment. As part of this process the research studies the potential benefits that are available to the foreign corporation together with the difficulties that making such an investment can experience. It is concluded that, providing Russia maintains a democratic political structure and can eliminate the adverse elements of their current system, such as corporate crime, the country provides an attractive market for retail globalisation, which will continue to benefit the Russian economy. Executive Summary Since the barriers of communism have been eradicated and a capitalist structure introduced, the Russian retail sector has experienced significant growth. As this report shows, much of this has been achieved through the relaxation of the Russian approach to foreign direct investment. From the research conducted for this paper it can be seen that FDI has contributed significantly to the present growth levels being experienced in Russia. Nevertheless, upon analysis of the benefits and disadvantages that face an international retailer wishing to take advantage of this emerging market place, it has been found that there are issues that need to be addressed if the current level of growth is to be sustained in the future. There is little doubt that, with the size of its consumer population and the continuing level of demand for western products, that Russia represents a major new market for the international retailer corporation. As revealed within this paper those who have already established outlets within this market place have already created a competitive advantage for their businesses. The report finds that there are some significant difficulties that still exist, which create a level of reluctance with new entrants. Most of these are based upon the demographic spread of the population, together with the cost of entry that is increased as a result of the current tax and regulatory regime. Similarly, the current domestic retailers are, in some instances, showing reluctance to participate in proposed mergers or takeovers. Whilst this low level of entry from external firms continues, the domestic retailers are also taking advantage of the situation by consolidating their own position within the market. This is being done by way of mergers and also by using the Western concept of retailing and extending their reach and coverage, not only through the main towns and cities, but also throughout the more rural areas. In reality, if they maintain these strategies, it will only serve to further increase the cost of entry to external firms and, from the FDI view, this would further delay their ability to benefit from the available market share. Therefore, we would suggest that two issues be addressed. That, if they wish to be active players in the increasing Russian retail market, the should evaluate whether the cost of immediate entry outweighs the potential loss of future competitive advantage. In respect of the Russian government, it is suggested that there should be consideration given to incorporating a more level of tariffs that is more in line with international standards, thereby increasing the attractiveness of their retail markets to foreign organisations. This is particularly important as they are also competing against other emerging countries and, if they want to benefit from the available investment, like the corporate retailers, they need to consider the advantage of early entry. Table of Contents Abstract Executive Summary Table of Contents List of Tables List of Figures List of Figures Chapter 1: Introduction 1.1 Motivation for the research 1.2. Aims and objectives 1.3 Overview Chapter 2: Literature Review 2.1 Russian change to capitalism 2.2 The Russian Retail Sector 2.3 Foreign Investment in Russia’s Retail sector 2.4 Summary Chapter 2: Methodology 2.1. Research method 2.2. Research material choice 2.3. Research performance Chapter 3: Findings and Analysis 4.1 Russian retail sector 4.2 Foreign Direct Investment 4.3 Problems and benefits to FDI 4.4 Advantages of FDI to Russian Retail Sector Chapter 6: Conclusion Bibliography Books Journals List of Tables Table 2 FDI in emerging countries in Europe Table 3 Russian major retailers. Table 3 FDI levels 2006-2007 Table 4 Potential FDI retail entrants List of Figures Figure 1 Russian retail growth Figure 2 Breakdown of retail sales Figure 3 Russia Hot Drink sales Figure 4 retail sales 2005 Chapter 1: Introduction 1.1 Motivation for the research Since the Russian political environment changed in the early 1990’s from the closed communistic approach to the more open capitalist format, which has allowed for the involvement of external financial institutions and corporations, the country’s economy has undergone a dramatic evolutionary process. As a result of this change, and notwithstanding the severe difficulties experienced in 1998, the Russian economy has achieved a remarkable pattern of growth over the past two decades. Nowhere has this growth factor been more noticeable that in the country’s retail sector, which according to recent research (RNOS 2006) has seen a recent growth of 30.8%, of which the food sector itself accounted for 22%. The same report forecasts a dramatic increase on these figures by the end of 2008, with food sector growth expected to double. However, such a dramatic increase in the rate of growth experience could not have been achieved solely by the privatisation of the internal marketplace. As with the economies of other emerging capitalists markets the Russian retail sector has attracted the attention of international corporate players, who have shown an interest in opening outlets in places like Moscow so that they can gain a significant share of the extremely large Russian consumer market. Many international corporations have already established a presence in this marketplace and other corporations such as the American giant Wal-Mart are seriously discussing projects that help them gain entry to this sector of the Russian economy. 1.2. Aims and objectives The purpose of this paper is to evaluate what effect this FDI[1] by external corporations has had upon the Russian retail sector. In conducting this research the objectives are to: To provide a better understanding of the economic forces that currently operates in the Russian retail sector. To evaluate the benefits and difficulties experienced by foreign corporations that have already established a presence in the Russian retail sector. To provide an indication of the issues that corporation intending to invest in the Russian retail economy will need to consider. To evaluate the impact that FDI has on the Russian Retail market It is intended that this paper will add to the existing literature available on the issues raised and provide an indication of areas whether further research needs to be considered. 1.3 Overview Following on from this introduction a review and evaluation of the current available literature relating to the issues raised will be conducted in chapter two. In chapter three the methodology for our research is explained in detail and this is followed by an analysis and discussion of the findings of that research. Chapter five concludes the paper and includes appropriate recommendations as well as indications of where the authors feel that further research on the subject may be beneficial. Chapter 2: Literature Review Within this literature review it is the intention to provide an understanding of the historical growth of the Russian retail sector economy since the capital free-market approach was adopted. As an integral part of this review will concentrate upon the political structure and how this differs from that of more developed countries, such as the UK and US. Furthermore, this chapter will review research that has previously been conducted in respect of the external organisations that have already began to operate within this sector of the Russian economy, outlining the experiences that they have had working within this relatively new capitalist environment. 2.1 Russian change to capitalism Following the collapse of communism in the late 1980’s, Russia began the slow steps towards building a free market economy, and this has caught the attention of numerous academic writers and observers. Many researchers, such as Dyker (2004), Medvedev (2000) and Gustafon (2001), have commented upon the fact that in the initial stages this free-market development was hampered by the continuing power struggle that was still taking place between the old hardliners and the new democratic factions. However, when Yeltsin defeated the attempted coup in 1992, power was finally wrestled from the central politicians and the process of conversion to capitalism could and did begin (Medevdev 2000, p.11). This forward move to a capitalist structure was reinforced in the same year by the â€Å"de-controlling† of prices (Gustafon 2001, 10). However, like fledgling free market economies, in the early stages of development the transition bought with it some difficulties. One of the major difficulties was the financial problem resulting from falling output. A Dyker (2004, p.5) and Granville and Oppenheimer (2001, p.3), comment in their research, it was expected that the transition would be â€Å"weak†, and they have expressed some surprise that the West â€Å"despite their expertise on communist regimes,† as Granville and Oppenheimer (2001, p.3) comment, were not prepared for this event. Others have also commented upon the levels of dishonesty in those early years. In Vadim Volkov (2002, p.3 and p.10) study of the Russian Mafia and organised crime, he reveals that there was a significant rise in business crime, particularly extortion and protection rackets. Volkov’s research shows that by the end of the 1980’s the reported incidences had exceeded 4,500 per annum and that it continued to grow dramatically during the early part of the 1990’s, reaching a peak of 17,169 cases in 1996 and the state was struggling to control this situation. The only beneficial effect of this racketeering as far as Volkov (2002, p.142) was that it led to a growth of a retail security sector. Russia also experienced a significant financial disaster in 1998, which saw the relatively new stock market index fall to 38 points, a 60% drop on its opening position, during which time the country fell back on it â€Å"familiar trade activities and exported natural resources, together with outside help to survive the crisis (Turnock 2005, p.130). Things began to change when President Putin came to power. Despite the fact that many researchers consider his approach to be the creation of a â€Å"managed democracy† (Terterov 2005, p.3), with observers being particularly critical of the lack of competition during the 2004 elections. Despite this perception, Putin was able to restore some measure of order to the process of transition. It is the general view that most of Putin’s reforms, perhaps with the exception of the variety of legislations that â€Å"restricted companies freedom of [financial] action† (Granville and Oppenheimer 2001, p.218), did contribute to a more positive free-market economy evolution (Dyker 2004; Granville and Oppeheimer 2001 and Turnock 2005). As Hoffman (2003, p.372), a trustworthy retail-banking environment was being built and additionally retailing outlets being released from state ownership into the hands of private owners. Granville and Oppenheimer’s (2001, p.511) produced evidence of this from a survey, which reported that, â€Å"by the end of 1995, 34 per cent of retail pharmacies had become independent juridical entities.† Oleinik (2005, p.214) confirms this position, revealing, â€Å"Roughly 50 percent of State-owned retailers, wholesale enterprises, public catering and transport enterprises were privatised as of July 1994.† In fact, in the early years much of the early change to capitalism was centred on internalised privatisation and restructuring of the various infrastructures, which researchers such as Burawoy (1996) and Turnock (2002) considered being a normal part of the process to be conducted before economic evolution can begin. 2.2 The Russian Retail Sector Whilst Russia has relied heavily upon its traditional manufacturing and natural resources to provide economic growth in the past, with the onset of capitalisation, it has been widely acknowledged within researches (Gufaston 2001 and Medvevev 2000 are two of these), the retail sector began to have an increasing impact. In fact it is held that in Moscow, which accounts for 27% of the country’s retail trade, this and â€Å"the growth of its consumer sector was the main factor in Russias economic turnaround† (Gustafson 2001, p.186). Many writers have studied the retail phenomena in an attempt to provide an understanding of the theory surrounding it, and how groups within the retail arena will react (e.g. Porter 1979, 1980; McGee Thomas 1986; Caves Porter 1977, 1978). Roth and Klein (1999, p.173), produce a general system theory that results in a multiple of outcomes irrespective of the fact that all firms may be subject to the same environment. The retail development in Russia over the past decade or tow certainly follows this theory. The growth of firms has been subjected to the many differing consumer demands, with a historical preference for open market and small store shopping. Similarly the geographical situation is Russia, whit a small number of major towns and cities dispersed over a wide area, has made also affected their growth patterns. Despite the fact that it is generally consider that the authorities approach to the retail sector has been correct (Terterov 2005, p. 28), there are others that argue that â€Å"business found it hard going, burdened as they were not only by taxes and the extortions of corrupt officials but also by the cruel racketeering that kept growing stronger† (Medvedev 2000, p.23). Similarly, others believe that there the development of the consumer sector was poor (Dyker 2004, p.57) and, in comparison with more developed economies, the levels of â€Å"integration were rather low† (Wehrheim 2002, p.19). Furthermore, this is said to have led to a wide variance of standards, with some improving and others not (Medvevev 2000, p.91). Thus it is little wonder that such researchers in the early 2000’s, should consider that â€Å"Russia was not the most successful country in pursuing the shift from plan to market( Wehrheim 2003, p.17). However during the last five years this position has begun to change, with the retail sector now growing at a dramatic rate. In fact its growth position is second only to India. This is being partially attributed to the increase in personal and disposable income (see table 1), GDP and the rise in the currency value. (Newswire Today 2007). This growth is encouraging attention from foreign businesses, who are looking for business or joint-venture opportunities in the Russian retail sector, such as the food industry (Wehrheim 2003, p.136) 2.3 Foreign Investment in Russia’s Retail sector Prior to Gorbachev’s accession to the Russian Presidency, FDI in Russia had been banned since the late 1920’s (Brady 2000, p.185). However, since this ban was lifted, and particularly during the past decade, FDI has become an increasingly important part of Russia’s economic growth (Dyker 2004, p.207), However, FDI interest was slow to begin with. Turnock (2005, p.3) advances the theory that this was due to the fact that â€Å"Whilst FDI and economic growth are linked, it does not necessarily follow that FDI helps in improving the investment climate, it usually requires the climate to be good in the first place.† Similarly, as foreign investors had learnt with other emerging countries, there is no â€Å"pain without Gain (Dyker, 2004, p.20). Nevertheless, once the free-market economy begun to flourish for internal organisations, Western corporation became interested, and this led to an increase in investment from overseas, which rose by â€Å"155 in dollar terms† by the end of 1994 (Brady 2000, p.205). Investors wanted to get a share of the market stock, â€Å"even though they often knew nothing about the companies , a situation encouraged by Russian tycoons (Hoffman 2003, p.207 and p.361). The one incident that did produce an adverse effect to FDI in Russia was the financial crisis of 1998 when, because of the apparent inability of the market â€Å"to restore order in its economy has forced foreign investors to take their money and head for the exit† (Medvedev 2000, p.296) However, once this crisis had been resolved, the flow of FDI continued to grow (see table 2). By the end of 1995 it had reached a position where five percent of the Russian consumer market was in the hands of foreign owners or their subsidiaries (Medvedecv 2000, p.156). Table 2 FDI in emerging countries in Europe Source: Turnock 2005, p.5 The position has also increased dramatically in the years post those in the above table. For example, the CIA Fact book (2007) showed that FDI doubled from $14.6 billion to $30 billion between 2005 and 2006. These figures were building on the back of a $9.4 billion FDI amount in 2004 (Special Report 2005), and there is little sign of this situation slowing down in the foreseeable future. In addition to the taking over of domestic retailers, foreign corporations are also setting up their own within the country, with Ikea, which â€Å"has 50,000 workers and 159 stores in 29 countries making and selling over 10,000 articles around the world and is one of the largest furniture companies† (Turnock 2005, p.237) being one of the most noticeable. 2.4 Summary It would appear from the literature that has been reviewed here that, whilst most academics agreed that Russia’s road to capitalism had a less than favourable start, and was also interrupted by the crisis of 1998, it’s economic growth has now become more stable and, despite the current political disquiet that exists about the country, the current levels of growth and FDI are set to continue for the foreseeable future. Chapter 2: Methodology 2.1. Research method Due to the complexities of the research being undertaken, together with the geographical and time constraints, it was felt that the best method of approach for this research was to use a quantitative approach. In view of the study being conducted, it is felt that this approach a wealth of literature, information that would span a sufficient level of governmental, independent observers and research sources to enable this paper to achieve its objectives. Similarly, such is the breadth of these resources that it is felt they ensure accuracy and ample range for comparative purposes. In the view of the author this approach has provided an adequate research base for purpose of this study. 2.2. Research material choice In terms of the government resources, the relevant data has been selected from various national international and global organisations. Other data in respect of FDI and the retail sector activity within the Russian market place, has been collected and researched using academic publications, together with industry news and press reports, supported by surveys and other technical data. Furthermore, we have used the data available on several corporate bodies that have secured a position within this market sector. 2.3. Research performance Using this data, the first step was to study the movement of the retail sector itself during the past few years, then to outline the events within the foreign direct investment factor, including a brief study of some of the external corporations that have sought to invest in this market place. During this process we have been able to also identify the benefits and disadvantage that such a move might bring to the investing corporation company. From these actions we have then been able to conduct analysis and outline areas for discussion. Chapter 3: Findings and Analysis 4.1 Russian retail sector The Russian retail sector, as previously indicated previously, has seen a period of continued growth since the beginning of this century. According to research carried out by RNCOS (2006), The market in 2004 grew to a value of $193.2 million, which represents a year-on-year performance increase of nearly thirty one percent, making in one of the most attractive retail markets globally. The same report also states that the expectation is for the growth rate to continue to exceed GDP during the course of the following years. Later resources available from the Russian Trade federation (see figure 1), show that this growth is continuing and is anticipated to accelerate in the next three years, with the major concentration on the main cities and towns. Figure 1 Russian retail growth Source http://www.russiantradeny.com/index.php?chapter=rtaction=showid=41 Additionally, the Russian statistics service (Rosstat) have released figures for the first quarter of 2007, which show that in that period alone the grown has been 13.6%, which at $117.456 billion, puts the sector on course to reach $500 billion for the who year. , in Russia, retail sales grew 13.6% YOY to reach the level of 3.043 Trillion Rubles (US$117.456757 Billion) from January to April 2007. However, retail sales grew 13.8% to reach around 814.8 billion rubles (US$31.4504652 Billion) in this April alone. A further report by Kuipers (2006) shows a further breakdown of these sales. From this analysis, it can be seen that, whilst food retail is growing appreciably at 17.6%, the non-feed area is doing even better (see figure 2). Figure 2 Breakdown of retail sales Of these amounts approximately 48% represent retail sales attributed to imported goods. The increases n this area has been brought about partially as a result of recent changes that the Russian authorities have made to various duties and levies. For example, as a recent Euromonitor (2006) study shows, the import duty on â€Å"raw coffee beans was abolished in 2006, with the direct intention of encouraging new players such as Nescafe and Starbucks. The following graph shows the effect that it is estimated this will have on the market for hot drink sales over the next few years. Figure 3 Russia Hot Drink sales There has been a significant growth of retail in the past few years in Russia and, as a result of this, Russia’s 76.3% increase in trade outlets is out-stripping the performance of other Eastern European countries (Czech 0% and Croatia 17%) and Europe as a whole (20%). The generally held view, as voiced by Vitaly Podolskyi, CFO of the Russian retailer Pyaterochka, during an interview with Kuipers (2006), is that by 2010 Russia could well become the largest retail market in Europe. However, in a later interview Vitaly Podolskyi, also stated that it was a difficult sector for domestic retailers, and for foreign entrants who were seeking to establish a profitable business in a reasonable timescale, simply because of the geographic fragmentation of the market place. In this respect his view was that for the foreseeable future, the best route for new entrants would be by mergers and acquisitions. As will be seen later this is a route already being preferred by some of the countries domiciled retail corporations. This view is supported by other research conducted by Kuipers (2006), which confirms that the country’s retail sales are still being generated upon old traditional lines. As can be seen from the following graph (figure 4) (Kuipers 2006), nearly half of all shopping is conducted in open-air markets, with modern trade outlets accounting for only around 20%. and the rest being generated through smaller outlets. Figure 4 retail sales 2005 Much of the reason for the slow pace of change in consumer buying habits is because of the fact that most development in this sector has taken place in the major cities such as Moscow and others mentioned in figure 1 above (see page 20). As mentioned earlier, with such a large geographical area and spread of population involved, it is difficult to impact these methods upon the larger population. However, as the growth rates in these metropolis begin to slow down, so the major retailers are beginning to look for growth further afield (Zeitung 2004), this is currentlu concentrated upon areas where the population is more than one million, but as this development continues, as with economies like the UK, smaller areas of population will no doubt be targeted in the future. As of 2004, as reported in a study conducted by Harri Larentz,, the major retailers within the Russian sector are still predominantly of domestic origin (see Table 3), with only three external competitors at that time. These can generally be broken down into three types of operators. †¢ discounters – developed by Magnit, Pyaterochka, Dixi and Kopeika. They feature a limited assortment (up to 4,500 SKUs), selling space of 250-1,000 m ², and a gross margin of 17-24 per cent. They are normally located in residential areas. †¢ traditional supermarkets – developed by Seventh Continent, Perekriostok, Ramstore, Rewe and, recently, by Auchan, with locations in city centres, along highways and in residential areas. Typically they generate a gross margin of 25-32 per cent and have an assortment of up to 20,000 SKUs. †¢ hypermarkets – developed by Auchan, Metro, Perekriostok, Mosmart, Lenta, Karousel and Seventh Continent – with selling space from 4,000-16,000 m ², 15,000-40,000 SKUs and a gross margin of 13-20 per cent. However, since this report was produced, the chains of Pyaterochka and Perekrestok have been merged to form the largest food retailer in the country by turnover.(X5 Retail Group NV 2007). Table 3 Russian major retailers. Source: Harri Lorentz 2004 From the consumers viewpoint, these new retail formats are having a beneficial effect, and not only in increasing the range of choice, but in the early days they increased the consumers purchasing power by bringing down price increases, although in latter years this has not been maintained (Anon 2005). Although the Russian economy experienced a downturn during the first half of 2005, from 7.6% to 5.6%, the position has improved since then, and the advances being made within the retail sector are driving much of this improvement. 4.2 Foreign Direct Investment As has been previously identified within this research, FDI is continuing to increase within the Russian economy (see table 2, p.16) and the latest figures produced by the Russian Federal state statistics service confirms this position for 2006-2007 (see table 3 below). However, as can be seen from this table. The amount of FDI directed at the retail sector is still a relatively small percentage of the overall investment. Table 3 FDI levels 2006-2007 Nevertheless, although this is the case, some of the balance of FDI is going to manufacturing industries that serve as production and supplier organisations for the retail sector. For example, in 2006 Nestle and their main competitor Kraft â€Å"launched and built† instant coffee production facilities (Eurmonitor 2006), which will no doubt encourage other foreign corporations to make the same move. Food Retailers There are already some international corporations already investing in the retail sector. As was noted in the report by Harri Larentz (2004), Auchan from France, Martloraf and Metro from Germany, Ramstore from Turkey, Spar from the Netherlands and Stockmann from Finland already have a foot in the door. But, apart from Ramstor and Metro, which have around 2 and six stores respec