Why has it taken so long for new industries to move to Russia and set up factories there?

Question

is this true that even today that many western factories and companies choose not to base themselves in Russia? also, is it still a big deal to the average russian to buy an electric tea kettle or a washing machine etc?

how this has changed and why it was such a big deal?

WHAT HAPPENED TO ALL THE SOVIET INDUSTRIES AND WHY THEY DIDNT MAKE THINGS SUCH AS WASHING MACHINES FOR THE AVERAGE PERSON?

any help appreciated'

how this has changed russia, russians, and their daily life?

thanks for your answers!

Answer 1

The main reasons are big distances and high import duties.



Distances and high transport expences cannot be overcome and many companies say that it is long and expensive to sell in Russia.

As for duties - the main reason is that Russia is not in World trade organization. Why they don't aloow Russia to be member if WTO it is another problem - every country has right with economic requirement ask from entering countries any other obligations - from political isuues up torequirement to have flight to the Mars first. As you understand certain countries have a lot questions to Russia. Result is Russia is almost the only in the world - not member of WTO.

If this problem would be solved Russian government wouldn't be able to use these import duties.



As for washing mashines, fridges etc. - they WERE MADE in times of USSR. How would be people able to wash? EVERY family had and now have a washing mashine. You have strange information.

Eveybody had MADE in USSR washing mashines, fridges, TVs, photo cameras etc... Many of those items STILL work!!!



As for nowadays, it is not every day deal, but it is impossible to imagine life without them now.

As for electric tea kettles - it is not a problem at all! They are VERY cheap! The problems can come later when these kettles will double your electricity bills. That is why some people deliberately don't buy them - only because they don't want to pay more for electricity when they can for flat price use gas 24 hours a day.



Why it was a big deal in USSR - because they produced less than it was demanded. That is why there was deficit of them.



Nowadays many companies make their electronics in Russia - LG, Zanussi, Candy, Bosch, Siemens etc... They are much cheaper than imported from abroad.



Of course modern washing mashines are "smarter", they require less water, needn't hot water, not so loud, but general functions are the same.



That is why there is no answer for question "how this has changed russia, russians, and their daily life".



What happened to soviet industries - many of them were closed in 1990s, not only because of quality of products but because of general economic crisis. When you have inflation some thousand % per year, everything stops, companies become bancrupts, the only way - is just to sell all the equipment as metal and finished. This is what happened in 1990s.



As for "mafia" this term is used only in Western press. there is no any "mafia", there is organized criminag groups as everywhere in the world. Don't join those who think about Russia with stereotypes.



About capitalism. In 1990s Russians had huge problems withfree markets (you cannot imagine, but try: tomorrow you wake up and all the money you have on your bank accoun became zero, all pruduction in the country stopped but you still go to work. Because you don't have choice - or you go and have hope that they will pay you something or don't go and then loose even hope. They don't pay you 1 month, 2, 3, 4, 5, 6, etc...... but you come back home and have kids at home. They want to eat, they need to go to school but you cannot do anything because just there is no job at all...).



After those years of free economy without any laws many average people were agree to have less freedom but to be able to earn for life. On this wave government stated to "screw nuts". And now we have what we have.



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No, I'm not from Moscow. Very far from Moscow. Problem is not "hate of capitalism" but "hate wild capitalism" when there is no any laws which would stop "capitalists" on their way to criminals. There were no this line in Russia. But "capitalism with human face" is welcomed in Russia by everybody!

Nowadays washing machines can be broken too. Don't they show every day on TV consequences of hard water?

Answer 2

They have. Russia has burgeoning manufacturing, IT and service Industries. Many of them are home grown, rather than US or European based.

After the collapse of the USSR many Western industries faced corruption, bribery and mafia practises that put off many from investing. Then came the economic collapse of 1998, when the Rouble, along with other currencies in emerging markets, had to be devalued.

Since 1997 Russia has concentrated on raw material exports - oil, coal and gas, as well as other mined products and timber. However,one of the effects of the 1998 crisis was that Russia's internal markets were protected from foreign companies - this led some of them, such as GAZ, UAZ and KAMAZ to consolidate and to begin to expand their ranges, and even to begin to purchase Western companies.



Russians can easily buy kettles, washing machines and fridges.

You need to update your perceptions about Russia, the chaos of the early post-Soviet era is long passed

Answer 3

they do no longer understand the language.they don't get used to the Maf-form negotiation.The Russian government is rather careful to allow the foreign places companies in,even to produce a coke.purely the German companies can gain this properly. yet they have greater innovations in jap Europe,alongside with Poland,verify,Bulgaria and Hungary. yet good information, Russian turns into the well known outsourcing holiday spot for American companies,because of the fact eire is in hardship.

Answer 4

Russian government put guy who embraced Capitalism to Siberian jail practically for life. When his long term was due to expire recently they "tried" Mikhail Khodorkovsky again and gave him another long term.



Other Russian capitalists got the message.



Constant threat of property being confiscated and themselves being prosecuted does not encourage long time strategies in running companies. Take as much as you can now, stash and hide as much as you can into some foreign banks and foreign investments and have nice jet plane ready to take you to London before arrest order is issued.



Old soviet industries were war-oriented and even in that field they were very inefficient.It took them 80% of the Soviet national resources to keep the pace with US spending 3% of its national resources.



They could not compete on the open market, except when it comes to raw natural resources which can not be screwed up. Oil is oil. But even there they tend not to invest into the future explorations, bat squeeze as much as they could fast. They do not know if their property would not be taken from them by the current people in power.



ADDED: The answer from Wave2012 bellow is actually very good. It is better than that user expects. In the last paragraph you will feel that they hate capitalism with passion. Just hate it.

That is why it is so hard for a good-citizen-capitalist to emerge in that society - his business will be destroyed and average Russians will get great pleasure watching guy going down.



Yes, USSR had washing machines. No, they were not good and very often we have to wash clothes by hand because washing machine was broken and to repair it or to get another one we had to bribe the store manager. It looks like Wave2012 grew up in Moscow. Moscow is not Russia. It got much more generous supply.



ADDED 2: Russians had a dream that after 3 generations of institutionalized hate toward free market the class of honest Russian capitalists and public servants will sprang out of nowhere and set up the US style prosperity for everybody. It did not happen. The beauty of free market is that it makes bad person to serve society or loose his money. Transitional period was needed, but Russians had lost patience and they had lost patience. Then Putin made Russia rich again. No, he did not. Check the price of oil and gas. Putin got lucky, that price went up. But it will go down again one day. And Russia will have to pay for the wasted years.