Help with Russian economy?

Question

I have to write about the economy of russia. Any info on the economy or how to look it up (or both) would be worth your time. Thanks in advanced

Answer 1

Although only half the size of the former Soviet economy, the economy of Russia includes formidable assets. Russia possesses ample supplies of many of the world's most valued natural resources, especially those required to support a modern industrialized economy. The central planning system left a number of legacies with which the Russian economy must deal in its transition to a market economy.

Russia posted gross domestic product growth of 6.4% in 1999, 10% in 2000, 5.1% in 2001, 4.7% in 2002, 7.3% in 2003, 7.2% in 2004, 6.4% in 2005 with industrial sector posting high growth figures as well. Russia became the fastest growing economy in the G8. By the end of 1997, Russia had achieved some progress. The Russian economy underwent tremendous stress as it moved from a centrally planned economy to a free market system. Lower prices for Russia's major export earners (oil and minerals) and a loss of investor confidence due to the Asian financial crisis exacerbated financial problems. The result was a rapid decline in the value of the ruble, flight of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions through the banking system, and the threat of runaway inflation.

Russia, however, appears to have weathered the crisis relatively well. Real GDP increased by the highest percentage since the fall of the Soviet Union, the ruble stabilized, inflation was moderate, and investment began to increase again. Russia is making progress in meeting its foreign debts obligations. During 2000-01, Russia not only met its external debt services but also made large advance repayments of principal on IMF loans but also built up Central Bank reserves with government budget, trade, and current account surpluses. The FY 2002 Russian Government budget assumes payment of roughly $14 billion in official debt service payments falling due. This has meant that Russia has given back much of the terms-of-trade advantage that it gained when the ruble fell by 60% during the debt crisis. Oil and gas dominate Russian exports, so Russia remains highly dependent upon the price of energy. Russia continues to explore debt swap/exchange opportunities.

Russia's GDP, estimated at $287.9 billion at 2002 exchange rates, increased by 4.9% in 2001 compared to 2000. However, this rate slowed compared to the 8% growth in 2000. Continued low inflation and strict government budget led to the growth, while lower oil prices and ruble appreciation slowed it. Industrial output in 2001 grew by 4.9% compared to 2000, driven by private consumption demand. The contribution of fixed capital investment, an important contributor to growth in 1999, lost its importance in industrial growth.

The exchange rate stabilized in 1999; after falling from 6.5 rubles/dollar in August 1998 to about 25 rubles/dollar by April 1999, one year later it had further depreciated only to about 28.5 rubles/dollar. As of June 2002, the exchange rate was 31.4 rubles/dollar, down from 29.2 rubles/dollar the year before. After some large spikes in inflation following the August 1998 economic crisis, inflation has declined steadily. Cumulative consumer price inflation for 2001 was 18.6% slightly below the 20.2% inflation rate of the previous year but above the inflation target set in the 2001 budget. The Central Bank's accumulation of foreign reserves drove inflation higher and that trend is expected to continue. The 2002 budget estimates an inflation rate of 12%, but the World Bank predicts inflation will stay above 15% in 2002.

Fiscal policy has been very disciplined since the 1998 debt crisis. Analysts remain skeptical that high rates of economic growth will continue, particularly since Russia's planned budgets through 2005 assume that oil prices will steadily increase. Low oil prices would mean that the Russian economy would not achieve its projected growth. However, high oil prices also would have negative economic effects, as they would cause the ruble to continue to appreciate and make Russian exports less competitive.

During 2000 and 2001, changes in government administration increased the power of the central government to compel localities to enforce laws. Government decisions affecting business have often been arbitrary and inconsistent. Crime has increased costs for both local and foreign businesses. On the positive side, Russian businesses are increasingly turning to the courts to resolve disputes. In 2001, the Duma passed legislation for positive changes within the business and investment sector; the most critical legislation was a deregulation package. The mineral-packed Ural Mountains and the vast oil, gas, coal, and timber reserves of Siberia and the Russian Far East make Russia rich in natural resources. Oil and gas exports continue to be the main source of hard currency, but declining energy prices have hit Russia hard. The Russian fishing industry is the world's fourth-largest, behind Japan, the United States, and China. Natural resources, especially energy, dominate Russian exports. Ninety percent of Russian exports to the United States are minerals or other raw materials.

Russia is one of the most industrialized of the former Soviet republics. However, years of very low investment have left much of Russian industry antiquated and highly inefficient. Russia inherited most of the defense industrial base of the Soviet Union, so armaments are the single-largest manufactured goods export category for Russia. As of 31 December 2005, there were an estimated 1,589,000 broadband lines in Russia. The Agriculture in Russia is struggling to rebuild as it transforms itself from a command economy to a more market-oriented system. Most farms could no longer afford to purchase new machinery and other Capital Investments. In 1999, investment increased by 4.5%, the first such growth since 1990. Investment growth has continued at high rates from a very low base, with an almost 30% increase in total foreign investments in 2001 compared to the previous year. Higher retained earnings, increased cash transactions, the positive outlook for sales, and political stability have contributed to these favorable trends. Foreign investment in Russia is very low. Foreign portfolio investment, which includes shares and securities, decreased dramatically in 1999, but has experienced significant growth since then. Inward foreign investment during the 1990s was dwarfed by Russian capital flight, estimated at about $15 billion annually. Inward investment from Cyprus and Gibraltar, two important channels for capital flight from Russia in recent years, suggest that some Russian money is returning home.

Russia's banks contribute only about 3% of overall investment in Russia. While ruble lending has increased since the August 1998 financial crisis, loans are still only 40% of total bank assets. The Central Bank of Russia reduced its refinancing rate five times in 2000, from 55% to 25%, signaling its interest in lower lending rates. Interest on deposits and loans are often below the inflation rate. The poorly developed banking system makes it difficult for entrepreneurs to raise capital and to diversify risk. Banks still perceive commercial lending as risky, and some banks are inexperienced with assessing credit risk.

Money on deposit with Russian banks represents only 7% of GDP. It also is the only Russian bank that has a federal deposit insurance guarantee. Sergei Ignatiev recently replaced Viktor Gerashchenko as Chairman of the Russian Central Bank. In 1999, exports were up slightly, while imports slumped by 30.5%. In 2001, the trend shifted, as exports declined while imports increased. World prices continue to have a major effect on export performance, since commodities, particularly oil, natural gas, metals, and timber comprise 80% of Russian exports. Ferrous metals exports suffered the most in 2001, declining 7.5%. In the first quarter of 2002, import expenditures were up 12%, increased by goods and a rapid rise of travel expenditure. The combination of import duties, a 20% value-added tax and excise taxes on imported goods (especially automobiles, alcoholic beverages, and aircraft) and an import licensing regime for alcohol still restrain demand for imports. In March 2002, Russia placed a ban on poultry from the United States. In the first quarter of 2002, exports were down 10% as falling income from goods exports was partly compensated for by rising services exports, a trend since 2000. Trade with the EU forms 52.9%, with the CIS 15.4%, Eurasian Economic Community 7.8% and Asia-Pacific Economic Community 15.9% [4].

Trade volume between China and Russia reached $29.1 billion in 2005, an increase of 37.1% compared with 2004

China’s export of machinery and electronic goods to Russia grew 70%, which is 24% of China’s total export to Russia in the first 11 months of 2005. During the same time, China’s export of high-tech products to Russia increased by 58%, and that is 7% of China’s total exports to Russia. Also in this time period border trade between the two countries reached $5.13 billion, growing 35% and accounting for nearly 20% of the total trade. Most of China’s exports to Russia remain apparel and footwear.

Russia is China’s eighth largest trade partner and China is now Russia’s fourth largest trade partner, and

China now has over 750 investment projects in Russia, involving $1.05 billion. China’s contracted investment in Russia totaled $368 million during January-September of 2005, twice that in 2004.

The IT market is one of the most dynamic sectors of the Russian economy. The biggest sector in terms of revenue is system and network integration, which accounts for 28,3% of the total market revenues [5]. Market analysts predict this indicator to increase tenfold by 2010 [7]. Currently Russia controls 3 percent of the offshore software development market and is the third leading country (after India and China) among software exporters. Such growth of software outsourcing in Russia is caused by a number of factors. One of them is the supporting role of the Russian Government.

Answer 2

In absolute figures - it isn't poorer. in case you'll count number in "per capita" - then at present it really is. in case you'll count number in monetary ability - then Taiwanese economic gadget is poorer. In Russia not all resources belongs to inhabitants contributors. extremely a huge area of resources belong s to gov, and style of resources is slightly diverse. In Russia purely about each body can enable himself to purchase few hundred kilometers of land yet in Taiwan this such massive resources will be insufferable for majority of inhabitants.