Where Russia’s Foreign Investment Really Comes From

There’s a daunting problem with data on foreign direct investment, vital statistics for evaluating countries’ bilateral relationships and global reach: The use of intermediary countries with business-friendly tax and legal regimes makes it hard to understand where much of the investment comes from. An economist at the United Nations Conference on Trade and Development has, however, come up with a way to get past this obstacle which completely changes how the data look for some big economies, such as Russia and China.

According to Unctad, between 30% and 50% of FDI goes through “conduit” countries, making it hard to determine the source. But only a dozen governments report foreign investment by ultimate investing country, and major developing economies aren’t among them. Because of this, it’s hard to judge how much U.S. and European sanctions have depressed Western investment in Russia, or how much U.S. investors’ money is at risk in China because of President Donald Trump’s trade war on that country.