Our Economy » Russia Economy http://www.oureconomy.org Business, Finance & Economy News | OUR ECONOMY.ORG Mon, 06 Dec 2010 08:36:23 +0000 en hourly 1 http://wordpress.org/?v=3.1 Russia Economy http://www.oureconomy.org/world-economy/russia-economy/ http://www.oureconomy.org/world-economy/russia-economy/#comments Sat, 14 Nov 2009 16:02:13 +0000 OurEconomy.org http://www.oureconomy.org/?p=12 The Russian economy has under gone a shift since the downfall of the Soviet Union. With the ideas of the free market system creating a new class of wealthy that the government has been cracking down on. A good example of this would be the seizure the oil company Yukos and arrest of the founder on tax evasion charges. As a result the Russian economy has become based mainly upon raw material exports to other countries, most notably oil and gas. This has caused some to question what the current state and future state of the Russian economy will look like.

Lagging behind in technology

Since the collapse of the Soviet Union, Russia has fallen far behind in the use and development of technology. This has caused the economy to have an uneven balance where it is dependent upon exports of raw materials. In his state of the nation speech President Medvedev called for vastly changing the Russian economy from one that is dependent upon raw material exports to one that is technologically advanced that can compete in the world economy.

Corruption

One of the biggest challenges facing Russia that has continued from the days of the Soviet Union is corruption. According to Transparency International, Russia is considered to be a wealthy country with vast economic potential but the overall corruption within the government is prevalent affecting economic growth in one way or another.

The Government

Another potential problem that could be facing the Russian economy is the government itself. Since Putin became President in 1999, the government has stifled the civil liberties of many groups causing concerns that the government could be reverting back to a totalitarian state. Combine this with the fact that Putin may reemerge as the President within the next few years has caused some in the west to worry.

Reforms

Various reforms are need in the Russian economy to bring the country up to the level it needs to be at to become a productive member of the world economy these would include reforms in banking, finance, legal, health care and education.

WTO Membership

Because of the various challenges laid out above and the negative publicity that Russia has received from its invasion of Georgia highlights the chances of the country being accepted into the World Trade Organization are small. In order to become a viable member of the global economy means that these different reforms need to be enacted to tackle the potential drags on the economy.

World Bank Report

While Russia no doubt has a number of different negative head winds, the worst appears to be over for the economy over the short term. With the World Bank projecting that Russia will begin to experience moderate growth next year. They are attributing this growth to stabilization of the global markets and an increase in demand from the United States.

Clearly Russia is a country with many different challenges that must be addressed to ensure that the country is a major economic player on the world stage. Above are just a few of the different issues that they are facing well into the future that must be addressed to ensure consistent above average economic growth. However, it is important to note that the worst could be over for the economy over the short term thanks in part to a stabilization that is taking place in the world economy.

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