Russian migrants bringing money

Russia became Finland’s most significant trading partner in July 2011, for the first time since the collapse of the Soviet Union, according to the monthly report of the National Board of Customs. The foreign trade statistics for the first half of the year indicates that export to Russia grew 30 percent between January and July from last year, and the growth in imports was some 25%.

 

Economic relations are nevertheless not problem- free. Russia’s market economy is still in a state of transition. Liberalisation has in some respects been drastic, but the activities of foreigners are subject to numerous restrictions in the country. Legislation is not up-to-date in many respects and sometimes it is enforced arbitrarily. There are also great problems in obeying laws. Foreign trade is hampered by high tariffs and import restrictions on certain products, as well as slow, corrupt and inconsistent customs activities,”- pointed Markku Kotilainen, Head of Unit, ETLA

As a resource-rich country, Russia’s exports to Finland are comprised mainly of oil, natural gas, metals and other raw materials. Finland’s exports to Russia, on the other hand, consist primarily of electronic industry products, machinery, equipment and other finished goods. The manufacturing of these products requires a high level of professionalism as well as research and product development. For educational purposes, a lot of Russians had to move to Finland to gain the necessary working experience.

 

The Russian-speaking population has been a part of Finnish immigration history from the beginning of 18th century. However, the adaptation of them is harder than, for example, Estonians.  The Russians feel more discrimination, they are more often unemployed. The status of Russian-speaking people is weak in the job market. Racism, language requirements, as well as difficulties in supplementing and confirming degrees were seen as obstacles to employment. The attitude towards Russians is still negative; they are often seen as “mafia”.

 

On the contrary, according to the Helsingin Sanomat, “the finding does not support the often-reported presumption that a large number of Russians in Finland are engaged in criminal activities”. In proportion to the size of population, the crime percentage among the Russians varied between 11-13 percent depending on the year, whereas among the Finns, the Swedes, and the Estonians the rate was typically between 10-11 percent.

 

Russia, an enemy of Finland for centuries, is now an emerging market for three thousand Finnish companies, many of them small and medium-sized companies. After the collapse of communism and the Soviet Union, Finland’s exports collapsed, and contributed to an economic depression. The large companies had based their business on contact with Moscow’s central bureaucrats; not with a market which suddenly had thousands of small buyers.

 

Pertti Huhtanen, KIINKO, comes from the border town Hamina, and has seen this market grow. He says that a business entering the huge Russian market should aim for market leadership in either a large geographical area as a niche marketer, or in a small area with more sales-powered strategy. One should also note the wide differences in income, and therefore the market differentiation that must be considered differently from that of the West.

 Former presidents of Russia and FinlandFormer presidents of Russia and Finland,Halonen and Medvedev

 

The communist regime collapsed and the new Russian business climate reflects the openness of the modern business. Finnish training institutes teach languages and management skills to new Russian managers, so they can implement management systems in Russia, therefore, maintaining fair relationships between both nations is essential for the trade development.

By: Kristina Kucher

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