information, personal recreation and cultural, and finally royalties. Russia ́s export structure is concentrated in traditional services; like South Africa, with respect to modern services Russia is somewhat behind other comparators, except India. In the performance of modern services over time, Russia has consistently underperformed other countries. The BRICS show varying levels of development but similarly low levels of modern services exports.

As in other developed countries, the structure of Russia’s service exports is relatively dispersed. In the exports of richer countries, the shares of services subsectors are more equally distributed. **Error! Reference source not found.** shows the relationship between level of development and diversification for all countries, with Russia’s peers highlighted. However, although developed countries have a more even export basket, they also export more in general, as is shown by the size of the hollow circles. Poorer countries seem generally to have somewhat lower entropy indexes, but as the figure illustrates, these vary a lot. Russia, for instance, is doing well given its level of development—much better than South Africa and Brazil. Yet, as the figure shows, Russia’s services trade is rather small compared with some other countries that have similar export diversification (vertical axis).

Russia still trades mainly with countries with which it has close historical ties. **Error! Reference source not found.** looks at how Russia’s share of exports to selected markets compares to the shares the rest of the world exports to the same countries; it seems to be disproportionately linked to Ukraine. Russia’s presence in developed countries like Japan and Indonesia is relatively small. Russia could also increase its trade in services with the EU market—its trade relationships seem to be dependent on small‐country markets like Bulgaria and not connected enough with larger and higher‐income markets. For example, although trade complementarity with Germany is rising, Russia’s services trade is not as intense as the intensity of all other countries that export to Germany. Trade intensities with China and the Republic of Korea seem to be somewhat larger than with other developed markets, which may be partially explained by the importance of trade in goods among these partners as well as by the extensive shared border with China.<sup>**8**</sup> Russia’s services trade can also be expanded by extending the intensive and extensive margins. In terms of intensive margins, Russia has increased the depth of its services exports to Ukraine, the United Kingdom, and France at the expense of the United States and Turkey (see Francois and Pindyuk 2012).<sup>9</sup> **Error! Reference source not found.** illustrates important current markets for Russia, showing the intensive margins for 2002 and 2010. Germany and Ukraine are now Russia’s most important trading partners; together they absorbed just under 25 percent of its services exports. Ukraine has completely taken over the position of the U.S. as Russia’s most important export partner. Germany is still second, but the U.K. has taken over third place from Turkey. The concentration of Russia’s trade in its top three markets compares favorably with other countries. For instance, Ukraine’s top two destinations absorb as much as about 50 percent, and Brazil’s top two almost 40 percent.

> 8 Trade in goods involves trade in transport services as well as business travel, communication services, insurance, and other financial services that facilitate and support trade.

> 9 The following analysis uses the _Trade in Services Database_ developed by Francois and Pindyuk (2012). The data set is constructed using mirror flows (deducing a country’s export values from its partner’s import values). However, only data on cross‐border trade (mode 1) and consumption abroad (mode 2) can be collected in the data set as these are reported in _Balance of Payments Statistics_ . FDI (commercial presence, mode 3) is an important channel for foreign providers supplying services. While the _Trade in Services Database_ should be seen as the best current approximation to a comprehensive picture of global trade flows in services, it is still only a partial picture of the world.

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