Is the diplomatic conflict between Moscow and London a threat to British business investors in Russia? Many are scared, despite reassuring noises from Downing street and the Kremlin. Yesterday Britain’s man in Moscow, ambassador Anthony Brenton, underlined the economic ties between the two countries: “We expect that economic ties between Britain and Russia will continue to grow. They are significantly strong for both Britain and Russia”, he said.
In the last five years trade between the two countries has, effectively, tripled, and British business is booming as never before. In the great Russian investment rush, Britain is out in the lead. Only last year British investments in Russia hit two point four billion euros, and forecasts for this year expect twice that.
Only the Cypriots out invest Britain in the Russian market. British money is everywhere, in property, energy, food, or distribution, but the Russians are playing the game, too. They have gone hunting for capital in the City, and have found it in spades. Bilateral deals between the two partners have exploded says the director of the Anglo-Russian chamber of commerce in Moscow: “The statistics show that we are growing. British investment is growing year on year. Russian investment in Britan is growing year on year, not just in Britain, but abroad. I think the total trade between our two countries last year was over eight billion pounds, over 16 billion US dollars”.
However some British companies have suffered setbacks in Russia. Last year the Anglo-Dutch giant Shell had to sell off its majority gas interests in a huge project to monopoly Gazprom. This was a heavy blow to Russian claims of letting market forces operate freely, but in the long run says the chief strategist of Renaissance capital Roland Nash, pragmatism will prevail: “Since 2001 the equity market has gained roughly 600 billion US dollars in value. That’s a lot of money to have been generated in the country, and in the end it’s the economics that drive business, it’s not politics”.