Investors worry about Russian bureaucratic favoritism, restrictions on foreigners and rogue (unethical) corporate behavior, according to a new report. The study polled 553 business leaders in Russia this year, up from 473 in 2005
Russia fell nine places to 62 in an annual Growth Competitiveness Index of 125 countries by the World Economic Forum. Last year, Russia dropped five places.
Eating into Russia's competitiveness were old Russian problems like weak institutions, including favoritism in government decision-making, swindling (unethical behavior) by firms, poor infrastructure and foreign ownership restrictions.
The country's ranking in capacity for innovation fell to 49 from 42 in 2005, while the quality of math and science education plunged to 43 from 21.
Russia's judicial independence -- ranked 110 out of 125 -- is time-consuming, unpredictable and a cost burden to enterprises.
The situation with property rights is extremely poor and worsening. . The country's ranking in this indicator in the last two years fell from 88 in 2004 to 114 in 2006 and is among the worst in the world.
The country's standing in other areas is also among the worst. Russia placed 116 in the soundness of banks; 114 in inflation; 107 in public trust of politicians and 82 in the business costs of crime and violence.
Switzerland, Finland and Sweden are the world's most competitive economies this year. The United States fell from first place to sixth this year.
Agencies
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