David Reid, analyst for the Eastern European Trust discusses the implications of Russia joining the World Trade Organisation:

11 November 2011

�The fact that Russia�s accession has been accepted by the WTO working group after 18 years of negotiations is a big step forward for international trade, Russia being the only major economy remaining outside the system. �It is anticipated to bring notable benefits to the Russian economy by reducing trade barriers and promoting competition; a World Bank study has estimated as much as 11% of GDP over the longer term, a welcome boost to growth in a world where it is becoming increasingly scarce. �Over the longer term, WTO membership will also act as an important anchor for trade and industrial policy in Russia, ensuring that it becomes increasingly open, transparent and fair. �But the interesting question to ask is not just how Russia benefits from the WTO, but why it has chosen this moment to agree the reforms necessary to achieve membership. �Prior to the financial crisis Russia found it easy to fund its development using the cash gained from exploitation of its natural resources, often distributed through state corporations and government spending. However, the crisis quickly brought home to the government that this was not a sustainable mode for economic growth, and so Russia has been making efforts to improve its investment climate in order to attract increasing amounts of private international investment and technology transfer. �Recently, we have seen the approval of a $60bn privatisation program to roll back the share of the state in the economy, the launch of a government co-investment fund to promote foreign direct investment and the welcoming of international companies like Exxon, to develop strategic oil reserves in the Kara Sea, and PepsiCo, which has become Russia�s largest food and beverage manufacturer following an acquisition. �The Russian government has plans to introduce further reforms and this is a change in attitude which is largely unappreciated by the markets at the present time.� ENDS Contact: Rachel Cashmore Lansons Communications 020 7294 3663 Rachelc@lansons.com Victoria Ford Lansons Communications 020 7566 9707 VictoriaF@lansons.com Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Services Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: 020 7743 3000. Registered in England No. 2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and bases of taxation may change from time to time. The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The fund invests in economies and markets which may be less developed. Compared to more established economies, the value of investments may be subject to greater volatility due to increased uncertainty as to how these markets operate. The Trust invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The Trust invests in economies and markets which may be less developed. Compared to more established economies, the value of investments may be subject to greater volatility due to increased uncertainty as to how these markets operate. The Trust investments may be subject to liquidity constraints, which means that shares may trade less frequently and in small volumes, for instance smaller companies. As a result, changes in the value of investments may be more unpredictable. In certain cases, it may not be possible to sell the security at the last market price quoted or at a value considered to be fairest. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.