northern hemisphere country, disposes of a huge landmass (second largest in the world in terms of territory) and has a large resource base like Russia. Its raw materials processing industries (wood processing, metal and raw materials extraction and processing equipment, chemicals) could supply technology and know-how relevant to Russia's needs. Many Canadian TNCs invest abroad indirectly under piggy-back schemes as suppliers of components or semimanufacturers to US multinationals (automobile or computer sectors). But Canada's own TNCs are in a position to take their own investment decisions and are committed to strengthen their position in the world's large emerging markets.
Finally, in Asia, South Korea could be another interesting target. Large TNCs like Samsung, Hyundai, Lucky Goldstar (LG) and Daewoo have remained foreign investors in spite of the crisis that hit the economy at the end of 1997. South Korea offers interesting technologies in automobiles, shipbuilding, electronics, metal working (iron and steel) and machine building.
G5: France, Germany, Japan, United Kingdom, United States; G7: G5 plus Canada and Italy.
Developing countries (e.g. Cuba, India, Vietnam, Laos) owe Russia an estimated US$100 billion. This outstanding debt was a major reason for Russia's admission to the G7.
Boris Rodyonov, 'schto sulit racschirenyie Evrosoyuza na Vostok' [Eastward expansion of the European Union], Modus vivendi, 1(2), 1998.
An increasing number of US and Canadian TNCs use their western European headquarters for expanding their business eastward to Russia and the CIS.
A trade and investment agreement was signed between Russia and Italy on 10 February 1998 during President Yeltsin's visit to Rome. Since the financial crash, international policy-makers have turned their attention to general issues (e.g. debt repayment, customs, certification) instead of paving the way for FDI-oriented projects to save Russia's economy.
All EU countries together host tens of thousands of SMEs, which could be approached systematically by the Russian authorities.
Currently, Russia is in a weaker position in terms of inward FDI. In 1996, companies from the G5 countries invested much more in the other important LEMs: China, India, Brazil, Mexico. Increasingly, other emerging economies are signing bilateral investment agreements with Russia. A recent example is Argentina; see 'Argentina signs agreement with Russia', Expert, no. 24, 29 July 1998, p. 5.
For current economic performance and key players in LEMs, refer to Chapters 5–7 and 10.3.