ECONOMIC ANNALYSIS OF RUSSIAN FEDERATION A decade later the decay of the U.S.S.R., Russian Federation, while still struggling to pass water a modern market miserliness and achieve sustainable scotch growth, has just completed its third year of arduous economic growth. Up until 1999, Russian GDP had contracted an estimated 43 per centum from 1991, including a five pct drop in 1998, contempt the countrys wealth of natural resources, its well-educated population, and its diverse although more and more dilapidated industrial source. By the end of 1997, inflation had been brought at a lower place control, the ruble was stabilized, and an ambitious privatization political program had transferred thousands of former state owned enterprises to private ownership. Some serious market-oriented laws were also passed, including a moneymaking(prenominal) code governing handicraft dealing and an arbitration begin for resolving economic disputes. In 1998, as the Asian monetar y crisis spread its contagion through the exploitation sphere and inunct colour prices dropped sharply, Russias earnings from inunct color exports evil precipitously, and the government work out was in chaos. During 1999, worldly concern oil prices rebounded, and with much lower ruble costs, the Russian oil labor invested to ramp up end product. Rising exports and vigor-related enthronement coin helped the parsimoniousness start growing again; GDP grew by 3.2 portionage in 1999. In 2000, with oil prices hitting their peaks for this cycle, enthronement spending and export earnings strengthened further, powering the economys growth at a torrid 8.3 percent annual rate. The government cipher came in approximately in balance and Russia repaid an estimate US$17 billion in international debt, reducing the outside debt to about US$135 billion by mop up 2001. While the Russian economy, with establishment of political stability ground-floor President Vladimir Puti n and the unexpected aid of high oil prices,! has do some big advances in the past three years, many problems remain on the path to sustained, diversified growth. At present, the economy is far too dependent on force and energy exports. A major part of the problem is that, as a legacy from the USSR, Russia has not allowed domestic prices for energy to rise to world levels. In some cases, domestic consumers pay 10 percent of the world price, depriving the energy sector of funds urgently pack for new investment and to repair aging Soviet-era infrastructure and dissemble wrong signals about the value of energy in backing and home use. Russia has large oil reserves (50-55 billion barrels) and genuinely gigantic natural gas reserves (1700 trillion cubic feet) and it has substantial pipeline capacity to deliver its petroleum output to the west. However, most of the pipelines date from the Soviet era and are in need of significant refurbishment, upgrading and expansion.
To keep its current level of oil production from declining, Russia needs to invest huge sums over the approach years in well maintenance and development as it is currently producing the equivalent of two million barrels per twenty-four hours of oil more than it is replacing in new turn out reserves. And, realizing the enormous potential of its natural gas resource baseborn will take another huge dose of investment. Russias change to a market economy has also been slowed by permeative corruption in government and a weak juridic system that has difficulty dealing with the growing incidence of engross arrears among Russian consumers and businesses. Almost s instancey percent of to tal remote obligations of about US$135 billion (abou! t 50 percent of GDP) originate from the Soviet era, which the Russian government now clear having assumed. Hopes of debt rescheduling and partial forgiveness have not been fulfilled so far and Russia is not as heavily indebted as many other countries who are receiving debt relief from international creditors. Russian support for the U.S.-led international coalition against terror in the event of the terror attacks in September 2001 bolstered Russias ties with the U.S. and other Western nations, opening night new opportunities for economic cooperation and raising the probability of early enamor into the WTO. If you want to get a full essay, order it on our website:
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