Zuma's state visit and the challenges of doing business in Russia

This research paper analyzes the economic opportunities and systemic risks associated with South Africa's strategic partnership with Russia following a state visit by President Zuma. While Russia offers significant potential as a global economic power, the author highlights severe barriers to entry for South African businesses, including high corruption, state dominance in strategic sectors, and a poor regulatory environment.

• President Zuma's state visit resulted in several cooperation agreements focusing on space, technology, uranium enrichment, and the joint mining of resources. Russia specifically aims to control 45 percent of the low enrichment uranium market in South Africa and intends to use the country as a base to gain a competitive edge in African resources such as cobalt, zinc, diamonds, chromium, and nickel.
• Russia's economy is characterized by a heavy dependence on commodities, producing approximately 25 percent of the world's natural gas and crude oil. These two commodities represent about 50 percent of total national revenues and roughly 60 percent of all exports, leaving the country vulnerable to cyclical oil sector trends.
• The business environment in Russia presents significant challenges for South African corporations. According to the World Bank Index on Doing Business, Russia ranks 120 out of 183 countries for ease of doing business and 182nd for the difficulty of obtaining construction permits. Additionally, the Heritage Foundation's economic freedom index ranks Russia 41st out of 43 countries in Europe.
• The Russian state maintains an overbearing role in the economy, particularly in banking, aircraft, railways, roads, media, copper, and natural gas. In 2008, the State Council designated 42 sectors as strategic, effectively making them off-limits to foreign entities.
• In response to budget deficits following the global financial crisis, the Russian government announced the sale of state assets in VTB Bank, Russian Railways, and Rosneft, an effort expected to generate US$29bn in revenue.

APA

South African Institute of International Affairs (2010). Zuma's state visit and the challenges of doing business in Russia. https://saiia.org.za/research/zumas-state-visit-and-the-challenges-of-doing-business-in-russia/

Chicago

South African Institute of International Affairs. Zuma's state visit and the challenges of doing business in Russia. 2010. https://saiia.org.za/research/zumas-state-visit-and-the-challenges-of-doing-business-in-russia/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Zuma's state visit and the challenges of doing business in Russia |date=12 August 2010 |url=https://saiia.org.za/research/zumas-state-visit-and-the-challenges-of-doing-business-in-russia/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2010zumas, author = {{South African Institute of International Affairs}}, title = {{Zuma's state visit and the challenges of doing business in Russia}}, institution = {South African Institute of International Affairs}, year = {2010}, month = aug, url = {https://saiia.org.za/research/zumas-state-visit-and-the-challenges-of-doing-business-in-russia/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }