Eurasian Integration Yearbook 2012

The Economics of the Post-Sovietand Eurasian IntegrationIn our opinion, therefore, there are no grounds for claiming that there is aneconomic basis for political integration that does not include Russia. Eventhe projects of the SOCAR (State Oil Company of the Azerbaijan Republic)which principally are in Georgia and Ukraine, are driven by ordinary economiclogic: in Central Asia or Russia the leading Azeri oil and gas producer wouldhave faced far more aggressive competition from Russian, Kazakh and leadinginternational TNCs.4. Key industries and investor companiesTable 8.7.The largestinvestment projectsin the MMI CISdatabaseSource: MMI CISNote: Mechel,RUSAL, VEB and VSEnergy implementedprojects which donot correspond totheir core businessThe MMI CIS database facilitated a much greater understanding of the structureof mutual direct investment by industry, since official statistics, for reasons ofconfidentiality, do not provide details of individual investor companies. Thelargest investment projects were implemented by companies from Russiawhich belong to the group leading Russian non-financial TNCs in termsof overseas assets (Kuznetsov, 2011). Of the 25 largest projects, only threewere implemented by investors from other CIS countries (see Table 8.7). InAzerbaijan, there was a joint project involving Azerbaijan Railways and theState Oil Fund of Azerbaijan (SOFA), which, among other things, exemplifiesa particular type of FDI, i.e., a privileged loan for 25 years to a subsidiary jointventure. In Kazakhstan, the investors were development companies rather thanclassic TNCs.GazpromMTSInvestorVympelComLUKOILHome country andindustryRussia, gas transportationand saleRussia,telecommunicationsRussia,telecommunicationsRussia, oil and natural gasproductionRecipient countryand projectApproximate FDI($ million)InceptionyearProject typeBelarus, Beltransgaz 5,000 2007 PhasedpurchaseUkraine, MTSUkraineUkraine, UkrainskiyeradiosistemyKazakhstan,participation inseveral PSAsEvraz Russia, steel production Ukraine, PetrovskyEvraz DMZ and otherfacilitiesLUKOILVympelComMechelRussia, oil and natural gasproductionRussia,telecommunicationsRussia, non-ferrous metalsproductionUzbekistan, severalPSAs3,000 2003 Purchase,expansion3,000 2005 Purchase,expansion2,639 1995 Series ofpurchases,expansion2,111 2008 Purchase1,710 2004 Greenfield,purchase,expansionKazakhstan, Kar-Tel 1,500 2004 Purchase,expansionKazakhstan,Voskhod-KhromRUSAL Russia, coal production Kazakhstan, Bogatyr-Komir1,300 2008 Purchase1,000 2007 Merger142 EDB Eurasian Integration Yearbook 2012