Russia's economic woes deepen with record investment drop
Russia has recorded a significant drop in foreign investments, according to data from the Russian central bank. As of October 2024, investments have reached their lowest level in 15 years.
Russia, counting on support from "friendly" countries like BRICS members, has severely miscalculated. Instead of the expected influx of capital, foreign investments in Russia have dropped to their lowest level in 15 years. Data from the Russian central bank show that as of October 2024, investors withdrew $63 billion CAD from the Russian market.
Over the past three years, Russia has lost a total of $374.5 billion CAD in direct foreign investments. Before the invasion of Ukraine, the value of these investments was $715 billion CAD. In 2023, Russia lost $114 billion CAD, and in 2022, $197 billion CAD. Despite Vladimir Putin's calls for investments, BRICS countries have not responded to his appeals.
China, Russia's largest trading partner, banned local firms from investing in the Russian oil and gas sector. They also refused to participate in the Power of Siberia 2 project. Chinese banks often decline to accept Russian payments, further complicating Russia's economic situation.
Russia faces isolation
Before the war, three-quarters of foreign investments in Russia came from "unfriendly" countries that suspended their activities after sanctions were imposed. In sectors like mining, manufacturing, trade, and finance, investors from these countries had significant stakes. Currently, Russia is preparing to introduce legislation to confiscate the assets of Western investors.
Investments from China amounted to only $4.7 billion CAD, accounting for 0.66 percent of the total. India invested $876.5 million CAD, while investments from Brazil and South Africa were negligible. Russia faces the challenge of further economic isolation, which could have long-term effects on its economy.
