The Crimean Crisis and the Future of Russian Outward Foreign Direct Investment
Baltic Rim Economies – Bimonthly Economic Review, No 4/2014, pp. 24–26
3 Pages Posted: 1 Nov 2014
Date Written: October 31, 2014
This article looks at the fallout of the Ukrainian/Crimean crisis for the foreign economic relations of the Russian Federation, including outward foreign direct investment (FDI). It notes the multiplicity of interests such policies have to satisfy. One of them is the protection of Russian interest, real or perceived, in the wider European region. Recent events leading to open conflicts in the Crimea and Eastern Ukraine can be indeed explained as a clash between Russia and the West about the future of these Ukrainian regions in the international division of labour. This article argues that the economic consequences for Russia are mostly negative, both in general terms, and concerning the interests of Russian outward FDI. In the latter case, the impact goes beyond the economic sanctions, initiated by the European Union and the United States. General Assembly Resolution 68/262 indicates that the majority if international community has taken its distance from the Russian point of view, and can consider measures much softer than sanctions in three areas: merger control (blocking the acquisition of “strategic” assets), access to finance (banking); and anti-corruption measures.
Keywords: Russia, Ukraine, foreign direct investment
JEL Classification: F21, F23, F34, O16
Suggested Citation: Suggested Citation