Mother Earth Travel > Country Index > Russia > Map Economy History |
| Economy - overview: A decade after the implosion of the Soviet
Union in 1991, Russia is still struggling to establish a modern market
economy and achieve strong economic growth. In contrast to its trading
partners in Central Europe - which were able to overcome the initial
production declines that accompanied the launch of market reforms within
three to five years - Russia saw its economy contract for five years, as
the executive and legislature dithered over the implementation of many of
the basic foundations of a market economy. Russia achieved a slight
recovery in 1997, but the government's stubborn budget deficits and the
country's poor business climate made it vulnerable when the global
financial crisis swept through in 1998. The crisis culminated in the
August depreciation of the ruble, a debt default by the government, and a
sharp deterioration in living standards for most of the population. The
economy rebounded in 1999 and 2000, buoyed by the competitive boost from
the weak ruble and a surging trade surplus fueled by rising world oil
prices. This recovery, along with a renewed government effort in 2000 to
advance lagging structural reforms, have raised business and investor
confidence over Russia's prospects in its second decade of transition. Yet
serious problems persist. Russia remains heavily dependent on exports of
commodities, particularly oil, natural gas, metals, and timber, which
account for over 80% of exports, leaving the country vulnerable to swings
in world prices. Russia's agricultural sector remains beset by uncertainty
over land ownership rights, which has discouraged needed investment and
restructuring. Another threat is negative demographic trends, fueled by
low birth rates and a deteriorating health situation - including an
alarming rise in AIDS cases - that have contributed to a nearly 2% drop in
the population since 1992. Russia's industrial base is increasingly
dilapidated and must be replaced or modernized if the country is to
achieve sustainable economic growth. Other problems include widespread
corruption, capital flight, and brain drain. GDP: purchasing power
parity - $1.12 trillion (2000 est.) SOURCE: The World Factbook |
Mother Earth Travel > Country Index > Russia > Map Economy History