02.2008 - Source: CIA World Factbook

Overview on Russia's economic development ("CIA World Factbook: Russia") [ID 11041]

"Russia ended 2007 with its ninth straight year of growth, averaging 7% annually since the financial crisis of 1998. Although high oil prices and a relatively cheap ruble initially drove this growth, since 2003 consumer demand and, more recently, investment have played a significant role. Over the last six years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position since the 1998 financial crisis. The federal budget has run surpluses since 2001 and ended 2007 with a surplus of about 3% of GDP. Over the past several years, Russia has used its stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club creditors and the IMF. Foreign debt is approximately one-third of GDP. The state component of foreign debt has declined, but commercial debt to foreigners has risen strongly. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $470 billion at yearend 2007, the third largest reserves in the world. During PUTIN's first administration, a number of important reforms were implemented in the areas of tax, banking, labor, and land codes. These achievements have raised business and investor confidence in Russia's economic prospects, with foreign direct investment rising from $14.6 billion in 2005 to approximately $45 billion in 2007. In 2007, Russia's GDP grew 7.6%, led by non-tradable services and goods for the domestic market, as opposed to oil or mineral extraction and exports. Rising inflation returned in the second half of 2007, driven largely by unsterilized capital inflows and by rising food costs, and approached 12% by year-end. In 2006, Russia signed a bilateral market access agreement with the US as a prelude to possible WTO entry, and its companies are involved in global merger and acquisition activity in the oil and gas, metals, and telecom sectors. Despite Russia's recent success, serious problems persist. Oil, natural gas, metals, and timber account for more than 80% of exports and 30% of government revenues, leaving the country vulnerable to swings in world commodity prices. Russia's manufacturing base is dilapidated and must be replaced or modernized if the country is to achieve broad-based economic growth. The banking system, while increasing consumer lending and growing at a high rate, is still small relative to the banking sectors of Russia's emerging market peers. Political uncertainties associated with this year's power transition, corruption, and lack of trust in institutions continue to dampen domestic and foreign investor sentiment. President PUTIN has granted more influence to forces within his government that desire to reassert state control over the economy. Russia has made little progress in building the rule of law, the bedrock of a modern market economy. The government has promised additional legislative amendments to make its intellectual property protection WTO-consistent, but enforcement remains problematic."

Document(s): CIA World Factbook: Russia

03.06.2005 - Source: Council of Europe - Parliamentary Assembly

General economic trends ("Honouring of obligations and commitments by the Russian Federation [Doc. 10568]") [#32710], [ID 11040]

"43. On the economic front, Vladimir Putin's first term of office ended on a positive note with very favourable trends being noted in all macro-economic indicators. Since 1998 the GDP has grown by 40% and industrial production by 45%. Growth remains sustained, at an annual rate of a little over 6% since 1999 and standing at 7% in 2003.The budget and external accounts are in surplus, and public debt is diminishing. The surplus of the state budget stood at 1.4% of the GDP in 2002 and 1.7% in 2003, with the surpluses being transferred to a budgetary stabilisation fund. The current-account trade surplus, due primarily to exports of energy products, has meant that currency reserves could be built up fairly quickly. By making reimbursements ahead of schedule, Russia has managed to reduce its foreign debts significantly; they now stand at below 40% of the GDP. Some of the more tangible signs of the 1998 crisis have now disappeared. There are no longer any wage arrears in the civil service and trade in the form of bartering now represents only 15% of all transactions, instead of two thirds during the crisis.

44. The excellent results in the Russian economy are due to a large extent to the energy sector, as a consequence of an increase in the volume of exports and higher oil prices. Official figures indicate that the oil and gas sectors alone account for 12% of the GDP, almost 40% of tax revenue and about half of all exports. A one dollar increase in the price of a barrel would accordingly represent 0.5% of the GDP and about an additional 6% of budgetary income. World Bank experts consider that the energy sector accounts for almost 25% of the GDP, which would indicate even greater reliance by the economy on energy exports and price fluctuations.

45. On the more negative side, many basic infrastructures are in a state of decay and community needs are considerable in the health, housing, transport and environment sectors. In spite of the emergence of a middle class, a large proportion of the population lives a somewhat hand-to-mouth existence. The situation of academics and those in the non-commercial sectors has to a certain extent taken a backward step, and a number of safety nets have disappeared with the demise of the Soviet Union. More than a quarter of the population is living below the poverty threshold28. The deteriorating social conditions – together with the trauma provoked by the terrorist attacks – are the main reason behind the sharp rise in racist and xenophobic incidents. We therefore fully support the government's policy, which considers the fight against poverty as one of its three top priorities."

Document(s): Open document

2004 - Source: Universität Bremen - Forschungsstelle Osteuropa

Development of the Russian economy ("Entwicklung der russischen Wirtschaft") [ID 11042]

Document(s): Entwicklung der russischen Wirtschaft

05.2003 - Source: US Department of State

Background information on people, history, political and economic situation ("Background Note: Russia") [#15322], [ID 11043]

"GDP (2005): $740.7 billion.
Growth rate (2005): 6.4%.
Natural resources: Petroleum, natural gas, timber, furs, precious and nonferrous metals.
Agriculture: Products--Grain, sugar beets, sunflower seeds, meat, dairy products.
Industry: Types--Complete range of manufactures: automobiles, trucks, trains, agricultural equipment, advanced aircraft, aerospace, machine and equipment products; mining and extractive industry; medical and scientific instruments; construction equipment.
Trade (2005): Exports--$245 billion: petroleum and petroleum products, natural gas, woods and wood products, metals, chemicals. Major markets--EU, CIS, China, Japan. Imports--$125 billion: machinery and equipment, chemicals, consumer goods, medicines, meat, sugar, semi-finished metal products. Major partners--EU, U.S., NIS, Japan, China. U.S. exports--$3 billion. Principal U.S. exports (2005)--oil/gas equipment, poultry, inorganic chemicals, tobacco, aircraft, medical equipment, autos/parts. U.S. imports--$11.8 billion. Principal U.S. imports (2005)--oil, aluminum, chemicals, platinum, iron/steel, fish and crustaceans, knit apparel, nickel, wood, and copper."

Document(s): Open document

23.01.2003 - Source: Amnesty International

Amnesty International: Report on business climate, economy and corruption in the Russian Federation ("Doing business in the Russian Federation: The human rights approach") [#10465], [ID 11044]

Document(s): Open document
00978rus.pdf

03.2002 - Source: Friedrich Ebert Stiftung

Economic developments ("Wirtschaftsaufschwung, Modernisierung und Elitenwandel in Russland") [ID 11045]

"Ab 1999 begann eine bis heute andauernde Phase der wirtschaftlichen Erholung.
Die russische Wirtschaft zeigte 2000 erstaunliche Wachstumsraten. Die Konjunktur
schwächte sich zwar im Jahre 2001 fühlbar ab, und das erwartete Wachstumsziel wurde nicht erreicht, aber dennoch wurden reale Zuwächse in allen Wirtschaftsbereichen erzielt, die deutlich über dem europäischen Durchschnitt lagen. Sorge bereitet allerdings die konjunkturelle Entwicklung seit dem zweiten Halbjahr 2001, denn seither verlangsamt sich das Wachstumstempo der Wirtschaft erheblich. Ungeachtet der rezessiven Tendenzen in der Weltwirtschaft und bei den europäischen Haupthandelspartnern und trotz des Preisverfalls bei Rohstoffen und Energieträgern erwies sich die extrem außenhandelsabhängige russische Wirtschaft als bemerkenswert widerstandsfähig. Folgende Zahlen sollen dies belegen:
Das Bruttosozialprodukt wuchs im Vergleich zum Vorjahr um 5,2% (Januar bis November 2001). 2000 wurde noch ein gewaltiger Wachstumssprung von 8,3% erzielt. Für 2002 wird ein Wachstum von ca. 5% erwartet. Die Wachstumsrate der industriellen Produktion fiel zwar von 11.9% im Jahre 2000 auf ca. 4,9% im Jahre 2001. Dabei war allerdings erfreulich, dass die landwirtschaftliche Produktion um 6,8% wuchs. Für 2002 wird mit einem durchschnittlichen industriellen Wachstum von 3 bis 4% gerechnet. Allerdings schwächten sich die Kapitalinvestitionen ab. Erreichten sie 2000 einen Rekordzuwachs von 17,7%, so verzeichneten sie 2001 nur einen Zuwachs um 8,7%. Von der als Folge von Einkommenssteigerungen und Steuererleichterungen wachsenden Binnennachfrage profitierte auch der Handel. Innerhalb des ersten Halbjahres hat sich der Einzelhandelsumsatz um mehr als 10 Prozent erhöht."

Document(s): Wirtschaftsaufschwung, Modernisierung und Elitenwandel in Russland

05.2000 - Source: US Department of State

US State Department: The Russian Economy ("Background Notes - Russian Federation (data as of May 2000)") [ID 11046]

"The Russian economy has undergone tremendous stress as it has moved from a centrally planned economy toward a free market system. Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short term borrowing to finance budget deficits led to a serious financial crisis in 1998. 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. However, Russia 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. In 1999, with limited access to financing from international financial institutions or bilateral sources, the GOR serviced around half its external debt payments due, and sought delays in servicing Soviet-era debt pending negotiations in the Paris and London Clubs. In early 2000 Russia negotiated a 35% write off of its commercial debt with the London Club. Russia's current Paris Club agreement expires at the end of 2000."

Document(s): Background Notes - Russian Federation (data as of May 2000)