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. Last Updated: 07/27/2016

Graft, Red Tape Are CEOs' Main Worries

Russian businessmen consider red tape, corruption and administrative barriers the biggest obstacles to doing business in the country, a survey published Thursday found.

In a survey of around 50 CEOs conducted by PricewaterhouseCoopers as part of the 10th Annual Global CEO Survey, 86 percent of respondents said they view corruption and bureaucracy to be the main hindrances to business development.

But when it comes to business risks, managers mostly share the position of their peers around the globe, the report said. For international and Russian managers alike, a major concern is the shortage of skilled staff --76 percent of Russian mangers and 72 percent of international executives view this as a critical issue.

Other issues of importance to Russian CEOs are strong government control, which is viewed negatively by 65 percent; growing state protectionism, which concerns 65 percent; and price rises for natural resources and energy, which rated 61 percent.

Among the more specifically domestic concerns is the strengthening ruble, which 59 percent of Russian executives see as an obstacle to developing their businesses

In some respects, the Russian context offered a marked contrast with international perspectives. While 57 percent of Russian executives believe that national governments should protect strategic industries from foreign control, only 27 percent of global respondents concurred with this view, the report said. Likewise, only 45 percent of Russian executives agreed that globalization is equally beneficial for both developed and emerging markets, in contrast with the 73 percent rate for the rest of the world.

About 57 percent of Russian executives are willing to finance further development through funds attracted in the debt capital market, whereas in other parts of the world, internal company equity is preferred. The reason for this, the report said, may be Russian managers' realization that debt markets, including overseas markets, tend to offer lower interest rates.

The report also revealed that about one-quarter of top Russian mangers are willing to use the stock market to attract funds, more than twice as many as in the rest of the world.