Russia New Emerging Market Recently I have gone through some reports and articles in which they have

e described following countries as upcoming world emerging economies with potential of becoming world biggest market. These countries includes Brazil, India, Russia, china, some latin American countries. I found Russia among them most important as because of its big oil and gas deposits. Also we are located at very strategic location regarding central asian states access to warm waters. Recently a big asian vehicle giant Hyundai have deployed a big car plant in Russia. So I see a big potential of car industry in Russia and specially for leasing and finance business. I think Netsol technologies as among worlds leading leasing and finance software developing company should find market potential of its state of art application suite leasesoft in Russia. In one of articles in The economist, matthew symonds stated that Russia is likely to overtake Germany, the Europes biggest market within next two years. There is another positive statement by Liam Halligan in the The telegraph, he says, Russia's reserves have ballooned from practically zero in 1998 to $480bn (242bn) today - the third largest haul on earth. The country is now almost debt-free - with a budget surplus of 6 per cent of GDP, and a trade surplus almost twice as much again. He also states further, But Russia is now far more than "just an oil and gas economy". Retail sales are growing at around 13 per cent a year in real terms - one reason why leading multi-nationals are now piling into Russia. Construction is expanding by 16 per cent a year, and domestic investment by 20 per cent - as Russia rebuilds its shattered post-Soviet infrastructure. Again, this trend is now attracting massive - and welcome foreign investment. Lets looks into the potential areas of Russia economy, 1. 2. 3. 4. 5. 6. 7. 8. 9. Large reserves of Oil and gas. Economy getting strong. Natural strategic relation with Pakistan. Central Russian states growing economy Increase in foreign investment in Russia Strong local technology Political developments Reforms in economy Competitive in Cost

There are many more points to discuss here but we stick to above main areas of improvement and opportunity in Russian market. The biggest point for Russia continued strong economy is because one of world largest oil reserves in Russia. Russia can keep growing its energy market and producing cheap energy resources for long time. Russia also has other important resources in abundance like metal ores, water and forest.( Russia Emerging Economic Power Mark Sanor, Partner, TAS -Head of M&A). Economic indicators are also getting better day by day. As per GDP rate its on the sixth number in world now. Russia expected to overtake Brazil by 2008 and become the 4th largest emerging economy. Russia's fundamentals remain fairly sound thanks to strong oil prices, with the trade balance posting a surplus of $10.41 billion in September, up from $7.96 billion in August.( By: TradingEconomics.com, Reuters ). We also need to look into the strategic partnership with Russia, we are not that good at relations with Russia due close ties of India and Russia. We need to look into the areas of common interest and investment. Today in this world economy decides the foreign policies of countries. We can find more depth in Russian market and eventually can make relations of these two countries more viable and balanced. Central Russian states are mostly Muslim states with which we have cultural and religious commonalities. These states can be a big door of opportunity for our software industry. As discussed earlier there is increase in investment in Russia due to cheaper labor and energy rate. German companies are investing in Russia. World leading multinational companies are investing a lot in Russia now. Russia indigenous technology is also quite strong specially the aircraft and weapon industry. Also there are big political changes in the Russia since splitting from Soviet Union to now a capitalist economy. Russian government is also implementing economic reforms. Tax reforms are being implemented. Reforms in banking sector to reduce Sberbank monopoly. Reforms in other sectors are also in place. Competitive in cost is another one of most important strong point for Russia being almost the same cheap as china. So for investment and growing economy almost all the points are favoring this country. Why not look into this window of opportunity? Why not Russia? I would suggest that Netsol technologies must give attention to this growing market.

There still a chance that Matthew statement is more optimistic but still we need to look into this worlds new emerging market Russia, similarly Netsol has targeted china which also includes in the list of world emerging markets. Netsol have to look into new markets with more business.

08 December 2010. Syed Asim Mehmood Sr.SQA Engineer