This section provides general information about trade between Australia and Russia as well as facts and figures about the Russian economy and facts and figures about the Russian Federation itself. We also provide advice about doing business in Russia and an overview of the Austrade services to help you do business more effectively in this complex market.

In addition, this section provides detailed information about business opportunities in key growth areas. We also provide practical advice on visas and travel.

Russia and the CIS
A market overview for Australian exporters

Austrade marketing specialists in both Moscow and Vladivostok can assist you to identify opportunities and position your company for continuing business in Russia and other countries of the Commonwealth of Independent States (CIS). The CIS region spans much of Eastern Europe and Asia and enjoys a unique resource base as a springboard for growth.

The energy-rich countries of the CIS have achieved unprecedented economic growth over the last decade. Like most other countries, Russia and the CIS was deeply affected by the global financial crisis. In the case of Russia, average annual growth of almost 7 per cent in the period 1999-2007 was followed by reversed by an 8.7 per cent contraction in 2009. However, the World Bank has forecast that Russia’s GDP will grow at 3.2 per cent in 2010.

For Australian exporters, CIS markets continue to offer solid growth prospects in selected sectors, including resources and energy, food and beverage, wine, advanced technology, selected commodities, industrial goods and services.

Prior to the financial crisis, the Economist Intelligence Unit (EIU) calculated that Russia became a US$2 trillion market in purchasing power parity (PPP) terms during 2008, making its economy comparable in size to the UK under the same PPP methodology. According to the EIU, Russia was also the world’s eighth largest retail market in 2008. The rapid economic growth of the last decade has transformed the nature of the market. While large income disparities remain, a sizeable middle class is also emerging in Russia, backed by real wages growth that was faster than even China in 2007-8. Russian consumers have European tastes, making for ready acceptance of most Australian products. Two-way merchandise trade between Australia and Russia quadrupled in the four years to April 2008 — reaching A$1.35 billion in 2008–09.

Russian banks and industrial conglomerates were deeply affected by the global credit crunch. Capital outflows were precipitous in late 2008, as western investors hastily liquidated their positions in emerging markets. However, 2010 has begun with consensus forecasts of strengthening growth in Russia, buoyed by strong prices for oil and other key exports.

Kazakhstan, a country of over 15 million people that is roughly as large as Western Australia, is an emerging leader in Central Asia. Since the year 2000, Kazakhstan's GDP has grown at an average annual rate of around 10 per cent. In 2008 it was similarly affected by the global financial crisis. The economy contracted by 2 per cent in 2009 (IMF/EIU estimate). Opportunities exist in specific sectors, where awareness of Australian technology and services capability is building, notably mining, oil & gas agribusiness and infrastructure.

Ukraine has been hit hard by the international crisis and its own declining economic fortunes. Selective opportunities exist in agribusiness. Exporters are advised to consult with Austrade to determine market strategies in Ukraine and other CIS markets.

Trade between Australia and Russia

Two-way trade and investment between Australia and Russia/CIS has grown and diversified significantly in recent years. This is reflected in the broad range of clients seeking Austrade assistance in Moscow and Vladivostok. Posts have undertaken work for clients across a plethora of sectors, including financial services, environment, mining, energy, ICT, food and beverage, professional services, fashion, tourism and education. Market opportunities are continuing to expand, albeit there is greater caution entering 2009.

Bilateral trade between Australia and Russia has risen quickly over the last five years from $241 million in 2002 to $868 million in 2007–08. For the latest trade statistics, see http://www.dfat.gov.au/geo/fs/russ.pdf.

The bilateral investment relationship is also positive, with rapid growth in both Russian investment into Australia and Australian investment into Russia/CIS.

Unlike the trade relationship with the Soviet Union, Australia's trade with the Russian Federation is increasingly diversified. While bulk minerals constitute a large proportion of the value, the range of products and services sourced from Australia now spans advanced manufacturing, financial services, engineering, healthcare, premium food and wine, luxury goods, technology and equipment for mining and energy, agribusiness, professional services, education and tourism.

Main growth opportunities

There are a number of exciting business opportunities for Australian companies in Russia:

• Building and Construction
• Consumer Goods
• Education
• Food and Beverage
• Mining and Metals
• Oil and Gas
• Professional Services
• Technology Equipment and Services
• Tourism and Leisure
• Wine

For more information, follow the links to read Austrade's business opportunity profiles to find out about potential opportunities in each industry.