Russia has an upper-middle income[26] mixed economy with state ownership in strategic areas of the economy. Market reforms in the 1990s privatized much of Russian industry and agriculture, with notable exceptions to this privatization occurring in the energy and defense-related sectors.
Russia's vast geography is an important determinant of its economic activity, with some sources estimating that Russia contains over 30 percent of the world's natural resources.[27][28][29] The World Bank estimates the total value of Russia's natural resources at $75 trillion US dollars.[30][31] Russia relies on energy revenues to drive most of its growth. Russia has an abundance of oil, natural gas and precious metals, which make up a major share of Russia's exports. As of 2012[update] the oil-and-gas sector accounted for 16% of GDP, 52% of federal budget revenues and over 70% of total exports.[32][33]
Russia has a large and sophisticated arms industry, capable of designing and manufacturing high-tech military equipment, including a fifth-generation fighter jet, nuclear powered submarines, firearms, short range/long range ballistic missiles. The value of Russian arms exports totalled $15.7 billion in 2013—second only to the US. Top military exports from Russia include combat aircraft, air defence systems, ships and submarines.[34][35]
In 2015, the Russian economy was the sixth largest in the world by PPP and twelfth largest at market exchange rates. Between 2000 and 2012 Russia's energy exports fueled a rapid growth in living standards, with real disposable income rising by 160%.[36] In dollar-denominated terms this amounted to a more than sevenfold increase in disposable incomes since 2000.[37] In the same period, unemployment and poverty more than halved and Russians' self-assessed life satisfaction also rose significantly.[38] This growth was a combined result of the 2000s commodities boom, high oil prices, as well as prudent economic and fiscal policies.[39] However, these gains have been distributed unevenly, as the 110 wealthiest individuals were found in a report by Credit Suisse to own 35% of all financial assets held by Russian households.[40][41] Poor governance means that Russia also has the second-largest volume of illicit money outflows, having lost over $880 billion between 2002 and 2011 in this way.[42] Since 2008 Forbes has repeatedly named Moscow the "billionaire capital of the world".[43][44]
The Russian economy risked going into recession from early 2014, mainly due to falling oil prices, the 2014 Russian military intervention in Ukraine, and the subsequent capital flight.[45][46] While in 2014 GDP growth remained positive at 0.6%,[47] in 2015 the Russian economy shrunk by 3.7% and was expected to shrink further in 2016.[48] However, the World Bank and the IMF estimated that Russia's economy will begin to recover by 2017.[49][50] By 2016, the Russian economy rebounded with 0.3% GDP growth and is officially out of the recession.[3][4]
In January 2016, the US company Bloomberg rated Russia's economy as the 12th most innovative in the world,[51] up from 14th in January 2015[52] and 18th in January 2014.[53] Russia has the world's 15th highest patent application rate, the 8th highest concentration of high-tech public companies, such as internet and aerospace and the third highest graduation rate of scientists and engineers.[51] Former finance minister Alexei Kudrin has said that Russia needs to reduce geopolitical tensions to improve its economic conditions.[54]
In May 2016 the average nominal monthly wages fell below $450 per month,[55] and tax on the income of individuals is payable at the rate of 13% on most incomes.[56] Approximately 19.2 million of Russians lived below the national poverty line in 2016,[57] significantly up from 16.1 million in 2015.
The economic development of the country has been uneven geographically with the Moscow region contributing a very large share of the country's GDP.[58] Inequality of household income and wealth has also been noted, with Credit Suisse finding Russian wealth distribution so much more extreme than other countries studied it "deserves to be placed in a separate category."[59][60] Another problem is modernisation of infrastructure, ageing and inadequate after years of being neglected in the 1990s. The Norwegian-Russian Chamber of Commerce also states that "[c]orruption is one of the biggest problems both Russian and international companies have to deal with".[61] Corruption in Russia is perceived as a significant problem[62] impacting all aspects of life, including public administration,[63][64] law enforcement,[65] healthcare[66] and education.[67] The phenomenon of corruption is strongly established in the historical model of public governance in Russia and attributed to general weakness of rule of law in Russia [63] According to 2016 results of Corruption Perception Index of Transparency International, Russia ranked 131th place out of 176 countries with score 29.[68]
There are many different estimates of the actual cost of corruption.[69] According to official government statistics from Rosstat, the "shadow economy" occupied only 15% of Russia's GDP in 2011, and this included unreported salaries (to avoid taxes and social payments) and other types of tax evasion.[70] According to Rosstat's estimates, corruption in 2011 amounted to only 3.5 to 7% of GDP. In comparison, some independent experts maintain that corruption consumes as much of 25% of Russia's GDP.[71] A World Bank report puts this figure at 48%.[72] There is also an interesting shift in the main focus of bribery: whereas previously officials took bribes to shut their eyes to legal infractions, they now take them simply to perform their duties.[73] Many experts admit that in recent years corruption in Russia has become a business. In the 1990s, businessmen had to pay different criminal groups to provide a "krysha" (literally, a "roof", i.e., protection). Nowadays, this "protective" function is performed by officials. Corrupt hierarchies characterize different sectors of the economy,[74] including education.[75]
In the end, the Russian population pays for this corruption.[76] For example, some experts believe that the rapid increases in tariffs for housing, water, gas and electricity, which significantly outpace the rate of inflation, are a direct result of high volumes of corruption at the highest levels.[77] In the recent years the reaction to corruption has changed: starting from Putin's second term, very few corruption cases have been the subject of outrage. Putin's system is remarkable for its ubiquitous and open merging of the civil service and business, as well as its use of relatives, friends, and acquaintances to benefit from budgetary expenditures and take over state property. Corporate, property, and land raiding is commonplace
Russia bounced back from the August 1998 financial crash with surprising speed. Much of the reason for the recovery was devaluation of the ruble, which made domestic producers more competitive nationally and internationally.
Between 2000 and 2002, there was a significant amount of pro-growth economic reforms including a comprehensive tax reform, which introduced a flat income tax of 13%; and a broad effort at deregulation which improved the situation for small and medium-sized enterprises.[88]
Between 2000 and 2008, Russian economy got a major boost from rising commodity prices. GDP grew on average 7% per year.[81][89] Disposable incomes more than doubled and in dollar-denominated terms increased eightfold.[37] The volume of consumer credit between 2000–2006 increased 45 times, fuelling a boom in private consumption.[90][91] The number of people living below poverty line declined from 30% in 2000 to 14% in 2008.[89][92][93]
Inflation remained a problem however, as the central bank aggressively expanded money supply to combat appreciation of the ruble.[94] Nevertheless, in 2007 the World Bank declared that the Russian economy achieved "unprecedented macroeconomic stability".[95] Until October 2007, Russia maintained impressive fiscal discipline with budget surpluses every year from 2000
Russia's vast geography is an important determinant of its economic activity, with some sources estimating that Russia contains over 30 percent of the world's natural resources.[27][28][29] The World Bank estimates the total value of Russia's natural resources at $75 trillion US dollars.[30][31] Russia relies on energy revenues to drive most of its growth. Russia has an abundance of oil, natural gas and precious metals, which make up a major share of Russia's exports. As of 2012[update] the oil-and-gas sector accounted for 16% of GDP, 52% of federal budget revenues and over 70% of total exports.[32][33]
Russia has a large and sophisticated arms industry, capable of designing and manufacturing high-tech military equipment, including a fifth-generation fighter jet, nuclear powered submarines, firearms, short range/long range ballistic missiles. The value of Russian arms exports totalled $15.7 billion in 2013—second only to the US. Top military exports from Russia include combat aircraft, air defence systems, ships and submarines.[34][35]
In 2015, the Russian economy was the sixth largest in the world by PPP and twelfth largest at market exchange rates. Between 2000 and 2012 Russia's energy exports fueled a rapid growth in living standards, with real disposable income rising by 160%.[36] In dollar-denominated terms this amounted to a more than sevenfold increase in disposable incomes since 2000.[37] In the same period, unemployment and poverty more than halved and Russians' self-assessed life satisfaction also rose significantly.[38] This growth was a combined result of the 2000s commodities boom, high oil prices, as well as prudent economic and fiscal policies.[39] However, these gains have been distributed unevenly, as the 110 wealthiest individuals were found in a report by Credit Suisse to own 35% of all financial assets held by Russian households.[40][41] Poor governance means that Russia also has the second-largest volume of illicit money outflows, having lost over $880 billion between 2002 and 2011 in this way.[42] Since 2008 Forbes has repeatedly named Moscow the "billionaire capital of the world".[43][44]
The Russian economy risked going into recession from early 2014, mainly due to falling oil prices, the 2014 Russian military intervention in Ukraine, and the subsequent capital flight.[45][46] While in 2014 GDP growth remained positive at 0.6%,[47] in 2015 the Russian economy shrunk by 3.7% and was expected to shrink further in 2016.[48] However, the World Bank and the IMF estimated that Russia's economy will begin to recover by 2017.[49][50] By 2016, the Russian economy rebounded with 0.3% GDP growth and is officially out of the recession.[3][4]
In January 2016, the US company Bloomberg rated Russia's economy as the 12th most innovative in the world,[51] up from 14th in January 2015[52] and 18th in January 2014.[53] Russia has the world's 15th highest patent application rate, the 8th highest concentration of high-tech public companies, such as internet and aerospace and the third highest graduation rate of scientists and engineers.[51] Former finance minister Alexei Kudrin has said that Russia needs to reduce geopolitical tensions to improve its economic conditions.[54]
In May 2016 the average nominal monthly wages fell below $450 per month,[55] and tax on the income of individuals is payable at the rate of 13% on most incomes.[56] Approximately 19.2 million of Russians lived below the national poverty line in 2016,[57] significantly up from 16.1 million in 2015.
The economic development of the country has been uneven geographically with the Moscow region contributing a very large share of the country's GDP.[58] Inequality of household income and wealth has also been noted, with Credit Suisse finding Russian wealth distribution so much more extreme than other countries studied it "deserves to be placed in a separate category."[59][60] Another problem is modernisation of infrastructure, ageing and inadequate after years of being neglected in the 1990s. The Norwegian-Russian Chamber of Commerce also states that "[c]orruption is one of the biggest problems both Russian and international companies have to deal with".[61] Corruption in Russia is perceived as a significant problem[62] impacting all aspects of life, including public administration,[63][64] law enforcement,[65] healthcare[66] and education.[67] The phenomenon of corruption is strongly established in the historical model of public governance in Russia and attributed to general weakness of rule of law in Russia [63] According to 2016 results of Corruption Perception Index of Transparency International, Russia ranked 131th place out of 176 countries with score 29.[68]
There are many different estimates of the actual cost of corruption.[69] According to official government statistics from Rosstat, the "shadow economy" occupied only 15% of Russia's GDP in 2011, and this included unreported salaries (to avoid taxes and social payments) and other types of tax evasion.[70] According to Rosstat's estimates, corruption in 2011 amounted to only 3.5 to 7% of GDP. In comparison, some independent experts maintain that corruption consumes as much of 25% of Russia's GDP.[71] A World Bank report puts this figure at 48%.[72] There is also an interesting shift in the main focus of bribery: whereas previously officials took bribes to shut their eyes to legal infractions, they now take them simply to perform their duties.[73] Many experts admit that in recent years corruption in Russia has become a business. In the 1990s, businessmen had to pay different criminal groups to provide a "krysha" (literally, a "roof", i.e., protection). Nowadays, this "protective" function is performed by officials. Corrupt hierarchies characterize different sectors of the economy,[74] including education.[75]
In the end, the Russian population pays for this corruption.[76] For example, some experts believe that the rapid increases in tariffs for housing, water, gas and electricity, which significantly outpace the rate of inflation, are a direct result of high volumes of corruption at the highest levels.[77] In the recent years the reaction to corruption has changed: starting from Putin's second term, very few corruption cases have been the subject of outrage. Putin's system is remarkable for its ubiquitous and open merging of the civil service and business, as well as its use of relatives, friends, and acquaintances to benefit from budgetary expenditures and take over state property. Corporate, property, and land raiding is commonplace
Russia bounced back from the August 1998 financial crash with surprising speed. Much of the reason for the recovery was devaluation of the ruble, which made domestic producers more competitive nationally and internationally.
Between 2000 and 2002, there was a significant amount of pro-growth economic reforms including a comprehensive tax reform, which introduced a flat income tax of 13%; and a broad effort at deregulation which improved the situation for small and medium-sized enterprises.[88]
Between 2000 and 2008, Russian economy got a major boost from rising commodity prices. GDP grew on average 7% per year.[81][89] Disposable incomes more than doubled and in dollar-denominated terms increased eightfold.[37] The volume of consumer credit between 2000–2006 increased 45 times, fuelling a boom in private consumption.[90][91] The number of people living below poverty line declined from 30% in 2000 to 14% in 2008.[89][92][93]
Inflation remained a problem however, as the central bank aggressively expanded money supply to combat appreciation of the ruble.[94] Nevertheless, in 2007 the World Bank declared that the Russian economy achieved "unprecedented macroeconomic stability".[95] Until October 2007, Russia maintained impressive fiscal discipline with budget surpluses every year from 2000
No comments:
Post a Comment