The Expert RA ratings agency prepared a 17-tier rating of investment attractiveness of the Russian regions for 2011-2012.

The top positions on the ratings list are as follows: Moscow, the Moscow region, St. Petersburg, the Krasnodar territory, and the republic of Tatarstan. All of these regions have rating levels of A. These regions have some of the highest rates of infrastructural development activity and a minimal level of risk.

The compilation of the rating revealed that the third wave of the regions’ investment attractiveness started, and that investors’ preferences are based on three criteria: the proximity to economic centers, the low cost of labor, and the lack of large investment projects in the recent years, according to Vladimir Gorchakov, the director of regional research for Expert RA.

The attractive regions of the so-called third wave also include Bryansk, Kostroma, the Ivanovo region, and the republic of Chuvashia, among others. The growth of investment attractiveness of the regions is possible only in the absence of adverse external factors, such as the resumption of the economic downturn.

In making their calculations, the rating agency experts have identified risks in the country as a whole. In 2011-2012, Russia witnessed economic growth, even if some desire to call it weak economic growth. Consequently, for the second consecutive year the country’s risks are reduced, discounting the slight increase in the environmental risk. It is particularly noteworthy that the risks associated with company management went down. The directive for improving the investment climate in the regions issued by the federal government began to show its effectiveness in the actions of the regional administrations.

In the 2013 ranking, the country investment risk as a whole went down. However, the pace of further investment risk reductions is expected to slow down. Under the current estimate of the Ministry of Economic Development, Russia’s GDP will expand by 3.5 percent in 2012, down from 4.3 percent in 2011. As such, a trend of decreasing performance of the regional economies will ultimately be felt. Each federal subject will have to find its own source of development. According to the agency, the drivers of development should be the regions of the third wave of development, since they are best positioned to facilitate Russia’s reindustrialization, the need for which is becoming more and more evident.

The list of 10 regions with the lowest level of risk includes Belgorod, Krasnodar, the Lipetsk region, St. Petersburg, Moscow, the Tambov region, Tatarstan, the Leningrad region, the Voronezh region, and the Moscow region.