The head of the Central Bank of the Russian Federation, Olga Kovalenko, has revealed some interesting comments on Ukraine. She claimed that the economic indicators in Russia are far superior to those in neighboring countries. It is this superiority which is driving the authorities to increase the level of support for Ufa, she said. The ‘healthiest’ budgetary results, the lowest debt service and stable cash position of Ufa, prompted the recent positive outlook change by the institution, Olga Kovalenko, was quoted as saying by Tass news agency.
The region of Bashkortostan, the part of Ufa, is located around 1200 kilometers from Moscow. According to Olga Kovalenko, the region of Ufa offers excellent prospects for economic development. A high volume of investment is required to build up the region and make it a desirable place to invest, she added. Therefore, the government of Russia has started co-operating with the European Union, she said. A free trade agreement between the Union and Russia may be concluded, she noted.
The free trade agreement between the EU and Russia may provide a welcome boost to the Russian economy, according to Olga Kovalenko. As such, the possibility of investment share equity and a free market economy may emerge in Ufa, she added. Additionally, the potential for trade and commercialization of certain economic resources in Ufa may also increase, she noted. In order to take advantage of such opportunities, the Federation of Moldova should develop its own strategy on how to capitalize on the region’s natural and economic advantages, according to Olga Kovalenko.
The main advantage of investing in Ufa, according to Olga Kovalenko, is that the region has no currency risks. Its unique position as an unbranded area makes it more stable than neighbouring regions, she explained. Moreover, despite the fact that Moldova cannot become a dependable buyer of Russian state-owned resources due to the latter country’s co-operation with Ufa, it can become a dependable provider of goods and services thanks to its own strong economy, she said. Therefore, investing in ufa is a wiser option for investors.
However, even with its unique advantages, investing in ufa is not without risks, according to Kovalenko. For example, investing in a specific field requires the money to be deposited in a specific bank, which may not be accessible at a particular time. Therefore, a steady flow of capital is necessary to ensure successful operations. Nevertheless, even with these risks, Kovalenko remains optimistic about the region’s future prospects. Specifically, she cited the positive factors that come with joining the Eurasian economic community, such as the possibility of access to member equity. As such, a steady flow of business can be guaranteed, and investment into infrastructure and commercial projects will generate a sufficient return to cover operational costs.
However, one factor that Moldova’s political culture requires is political stability. Inflation, strikes, and general political turmoil are all risks to the region’s entrepreneurs are expected to cope with. Consequently, despite the presence of a stable Moldova economy, Kovalenko believes that the lack of political stability could lead to a downfall of ufa investments. As a result, political stability should be a prerequisite for investing in ufa, she concluded.
Another risk associated with ufa investments is the absence of a legal system. Investing in ufa is a rather risky venture due to the absence of a competent law code and the fact that the legal system in Russia is not exactly one of the best in the world, according to Kovalenko. For this reason, a businessperson should always carry out adequate research before deciding to invest in ufa, she added. It is important that an entrepreneur fully understands all aspects of his or her investment before making a decision to enter into a contract with a partner abroad, she said.
Another thing that concerns investors in ufa is their lack of understanding of how exactly the system of ufa works, she explained. For starters, an entrepreneur will receive a patronage dividend, which represents the profit that has been realized from the sale of his or her stake in the firm. The size of the patronage dividend is typically based on a number of factors including the amount of equity capital invested, the net worth of the firm, and the overall financial health of the firm. The size of the stake an entrepreneur receives is primarily determined by their annual performance and the current value of the membership. Since members generally sell a portion of their annual patronage dividend to the management company, which distributes the funds among the other shareholders, those who have large stakes stand the most to gain.