Foreign Investors In St. Petersburg

One of the basic ideas of perestroika was to open up the Soviet economy to foreign influences. The Russian authorities started to actively promote western participation in the modernization of the economy. Joint ventures, which were permitted in 1987, were seen as a way of attracting western technology, management and marketing know-how but still maintaining control of enterprises in Russian hands. Later on, limitations on western ownership were gradually removed. A growing number of operational forms became legal, especially after the Russian government launched radical market reforms in January 1992. At the same time, however, the disintegration of the Union created a chaotic situation in which the investment climate in the country deteriorated. Most foreign investors have hedged their bets and only committed modest investments. The inflow of foreign capital has remained far below expectations.