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Some of the local companies have complained that the federation has not been able to resolve their concerns towards the accession issue, and therefore it is believed that the government has failed to exercise comprehensive analysis of the problems expected to be experienced by the domestic industries. The local companies have expressed their serious concerns on several issues, comprising 'the incompleteness of legislative reforms required for membership, such as passing a new Customs Code, law on external trade policy' (Mehmet, 2002). The local companies have raised serious doubts about the lack of exposure of the local companies to the competitive market, and problem with reference to the sluggish pattern of the growth of total factor productivity. It is anticipated that exposure of the local companies to the international market will 'detrimental in the short run to some sectors of the Russian economy such as the food and machine-building industries' (Mehmet, 2002), however the implications of not joining the Trade Organization are more severe and harmful for the economy of the country, the federation needs to restructure its economic polices and business setup, and its accession to WTO will serve many such purposes. Considering the example of Republic of China, the country since its accession have experienced large amount of foreign investment, which have supported the local industrial setup, and has provided the republic with an opportunity to restructure its entire setup, the country experienced growth and expansion of the foreign industrial units within China. In the past, the local private sector performed in the absence of the regulations and framework for 'the investment and business operations' (Marin, 2003), previously the local investors and companies also faced certain barriers. In the current setup, the accession will reduce the political and macroeconomic risks, and is expected to introduce legislative reforms and comprehensive environmental policies; this is expected to provide 'tangible improvements in the investment climate' for the local and foreign investors (Marat, 2003).
Question # 3
Russia is considered to be a country which has enough capacity, and the potential to exercise its strategic, geopolitical and economic supremacy, the Russians bankers and economists on many occasions have tried to explain and criticize the ignorance of the western investors, politicians and the commentators about such supremacy and advantage the country enjoys. The Russians analysts have tried to encourage the foreign investors not to consider the cultural differences as a major barrier for conducting their exercises within Russia. It is important for the foreign companies not to possess any offensive approach towards the Russian community; if business has to be operated the Russians have to be made part of it. The analysts have termed Russia as 'economic freight train', where it is important for the foreign companies to encourage the participation of the local Russians into their businesses. Although the educational system of the country is deplorable, therefore the foreign companies find it difficult to avail the services of well-qualified Russian local. Although the foreign companies have the option to hire the services of the foreign professionals, but many of the foreign companies have preferred to hire the local candidates, and then train them to improve their skills. The foreign companies have therefore been appreciated within the federation for offering learning opportunities besides job security. The foreign business within the federation has expanded due to the rise in the consumer demand, therefore if the rising consumer demand has surged the profitability of the company, the local population is entitled to such benefits and preference for the job opportunities. The local Russians have mainly failed to communicate with the foreign companies due to the language barrier; therefore the foreign companies have offered English learning programs to their employees. The local population is although paid relatively lower than what an average foreign employee earns, much because the cost of living within Russia is lower. The Human Resource Management has been incorporated by the foreign companies, and the companies have offered many such courses and programs for the up gradation for the skills and capacity of the local population, the successful employees upon training are offered promotion and other remuneration, however the foreign companies have expressed their reluctance to appoint any local at directorial level and executive authority, except for the cases where the company has been able to find well-trained and qualified professional for such assignment. The economic situation of the federation has put the activities and plans of the foreign companies under severe scrutiny by their respective officials at the headquarters; however the foreign companies have been able to neglect the cultural barriers, and encourage the participation and involvement of the local population through various schemes and training programs (Marin, 2003).
Mehmet Ogutcu. Attracting FDI for Russia's Modernization: Battling against the Odds. OECD-Russia Investment Roundtable. June 2002.
Oliver Funk, Anja Lorenz. Russia's Accession into the World Trade Organization. April, 2002.
John Pinder. The EU…[continue]
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