Spanning two continents, Russia is the largest country in the world and the owner of vast natural resources. Not surprisingly, Russia has been a major target of assistance from the international financial institutions (IFIs), receiving more than $48 billion since the breakup of the Soviet Union.* As Russia reaps the benefits of its natural resources, assistance has shifted to the private sector. Russian investments form the largest country exposures of the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).
Russia’s geographical size, internal diversity, and rapid transition speak to the challenges of its economic and social development. After surviving the turmoil of the early 1990’s, Russia’s economy declined again during the 1998 financial crisis. While higher commodity prices have been key to Russia’s recovery, resource dependency has not secured stability or wide-spread prosperity.
The IFIs devote a substantial portion of their assistance to extractive industries. Other IFI investments tend toward the financial sector, small and medium-sized business lending, energy efficiency, and infrastructure development. In 2008, EBRD announced a weighted focus on infrastructure that aligns with Russia’s own investment plans. However, Russia’s relative wealth means the challenge for the IFIs is not to provide financial assistance as much as to promote transparency, good governance, and stability in a country known for its corruption and economic fluctuations.
*Based on figures reported from EBRD, IFC, World Bank, and IMF; applicable currency exchange rates averaged over a five year period