Russia is no longer a part of the world's economic powers as it was in the days of the Soviet Union, but it remains one of the 10 largest economies at the international level (8th place in 2007)). It is now a member of G8.
The Russian economy is characterized by four major features:
- A transition economy that is still marked by its Soviet legacy
- A tendency to rent economy (exploitation of natural resources such as oil , natural gas and various metals )
- An economy that suffers from an aging population due to demographic imbalances which appeared by the end of the Soviet era
- The state still plays a major role in the economy, through the control of the major companies in the country, instead of worrying about corruption (Russia is the 143 th country / 179 on the list of perceived corruption in 2007).
In the current crisis, we see several areas that are still managing to grow, such as the food and the toy market. The latter is always small in Russia, since it represents less than 1% of the world trade (600 million dollars of annual expenditure) but it is constantly evolving, with a growth rate of 25%. Despite the low incomes of Russians, we find that they spend between 80 and 120 Euros per month on their children. The toy industry is very promising and could prove to be one of the opportunities to help the country come out of crisis.
Currently, 85% of the toys are imported, with 80% of the production coming from China and the rest from the U.S. or Europe. Establishing plants on Russian territory would include creating jobs, making better products, reducing transportation costs and encouraging foreign investment. However, to benefit from such a competitive advantage, we must ensure that the country does not pose too great a risk.
The Russian market consists of 142 million people, over 25 regional markets, including more than a third in which is growing in usefulness and covering 1/6th of the territory (see map). With China, India, Brazil and South Africa, Russia is one of 5 countries generally considered a priority for export. Among these markets it is the one that is closest to France, both geographically and culturally.
Benefiting from significant energy resources, solid infrastructure, a well-educated population and a stabilized economy, Russia has today reduced its debts and has new financial capabilities. Russia's GDP, of + 800 billion dollars in 2007, has more than doubled since 2003 (6% annual growth). Since 2002, Russia has tripled its imports, which totaled about 176 billion dollars.
The structures of Russian exports are dominated by energy products. Incomes of Russian exports surged since 2000 mainly because of high international oil prices. However, its performance in terms of exports and competitiveness in manufacturing (outside resources and metals) is undermined by the appreciation of the real exchange rate.
On the import side, growth recovered during the same period, as a result of rising real incomes and the real appreciation of the ruble. The EIU's current account surplus has risen significantly in recent years, to almost 95 billion dollars in 2006 (9.6% of GDP), but is expected to rise to 76 billion dollars (5.9% of GDP) in 2007.
On the export side, the most important trade partners of Russia are the Netherlands (12.3%), Italy (8.6%), Germany (8.4%) and China (5.4 %). As for imports, Germany (13.9%), China (9.7%), Ukraine (7%) and Japan (5.9%) are the main suppliers of imports from Russia.
Tags: Russian economy, Soviet legacy, annual expenditure, U.S., Europe, stabilized economy, significant energy resources, solid infrastructure, a well-educated population.
[...] In addition, Russia would benefit from a reduction of barriers to foreign direct investment, and a reduction in the levels and dispersion of import tariffs - Banks Background: In 1990 the exchange rates and inflation were high, and the exchange rate was anchored to the dollar. The Russian economy found itself short of cash. After the 1998 crisis the public credit institutions played a major role but there was also some interest in banks by foreign investors. Banking groups are mostly held by private investors who have made fortunes thanks to raw materials. [...]
[...] Thus, Russia has recorded a budget deficit equivalent to of GDP during the first three quarters of 2009 ( of GDP in 2008). This budget deficit tends to increase, which is a negative trend (it reached of GDP in early 2010). Although such a deficit may be used to fight against the economic downturn by increasing the aggregate demand by stimulating investment and consumption, an excessive deficit is generally not positive - Public debt The public debt of Russia accounted for of GDP in 2007, while in 1998 it reached 146%, reflecting the legacy of the Soviet Union and its debt in the 1990s. [...]
[...] ) - Labor market Unemployment is the biggest problem in Russia in 2010. In late December 2009, there were 2.1 million unemployed people (including 1.7 million people lost their jobs in the year and this figure could reach 2.2 million in 2010. This year, unemployment benefits will be distributed to the population. The minimum threshold was set at 850 RUB (20 while the maximum level of allowances will not exceed RUB (115 €).These unemployment benefits remain at the levels of 2009, the year in which they had been considerably increased. [...]
[...] Phase 1 - Preliminary Features The Russian market consists of 142 million people, over 25 regional markets, including more than a third in which is growing in usefulness and covering 1/6th of the territory (see map). With China, India, Brazil and South Africa, Russia is one of 5 countries generally considered a priority for export. Among these markets it is the one that is closest to France, both geographically and culturally. A market of 142 million inhabitants at a stretch of 17 kmsq: Benefiting from significant energy resources, solid infrastructure, a well- educated population and a stabilized economy, Russia has today reduced its debts and has new financial capabilities. [...]
[...] A vibrant fabric of SMEs in Russia would participate in the improvement of growth through increased purchasing power of middle class. The fabric of SMEs would allow Russia to create jobs and a middle class with some purchasing power. Today growth is not sustained enough to give confidence to investors. The presence of the administrative state in SMEs certainly hinders investors. The European Union and Russia set up a cooperation project in 2009, which aims to promote Russian SMEs in Europe, but especially involves the Russian SMEs which are implementing their internationalization of firms. [...]
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