The falling value of the ruble and the accompanying rise in interest rates is very bad news for the FIRRE (finance, insurance, retail and real estate) economy. This part of the Russian economy and the associated private sector construction industry will suffer substantially along with overseas tourism. That said, once a household has deferred buying a new flat, a new imported car, a new kitchen, a holiday abroad, a smart phone or a major household appliance, there may actually be more money for small luxuries. Lipstick sales rise in recessions. Reduction in these large items of expenditure is likely to cut Russia's import bill enough to leave room for other businesses. The top 10 importers to Russia in 2014 were automobile and electronics companies.
The falling value of the ruble is very good news for the Russian agricultural sector and for Russian manufacturing. Like their equivalents in the United Kingdom both suffered from an inflated currency value due to excessive oil production. There has been substantial investment in for example meat production and car production. Some Russian clothing brands have built billion-dollar companies, despite the costs of an overvalued currency. There is even a Russian smart phone. There are immediate opportunities for import substitution and given some time to organise opportunities for export. India, for example, is likely to benefit from falling oil prices and is already growing strongly.
These changes mean that the opportunities in Russia are now for investment in productive assets, continued exports of FMCG's and sales of capital equipment for agriculture, food processing and manufacture. Given Russia's relatively little spare capacity in intermediate goods, there will also be strong and robust demand for manufacturing supplies from cardboard packaging to specialist critical components in complex systems.
Since Putin became president, there has been enormous progress in cleaning up corruption in Russia. None of this has been acknowledged. Boris Berezovsky's cousin wrote a book in which he invented an entirely fictiously number based on entirely fictitious circumstantial evidence that Putin had a fortunate USD40 billion. There has never been any evidence for this whatsoever. It has been naïvely accepted by people whose position was already strongly Russia phobic because their ancestral ethnicity had a similar relationship to Russia as Irish Catholics to the UK. Senior US politicians and diplomats in particular fall into this category.
The World Bank classifies Russia as a high-income economy. For companies in the European Union, it is a huge opportunity on the doorstep. It is in a convenient time zone and culturally closer than the further reaches of Asia.