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Essay Subject: Examines economics & politics after Soviet break-up. Resources, fiscal policy, industry & investment, taxes.... More...

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Paper Abstract: Examines economics & politics after Soviet break-up. Resources, fiscal policy, industry & investment, taxes. Paper Introduction: Introduction With the breakup of the Soviet Union, there has been considerable interest in the future of the Russian Republic. Composed of the greater part of the Soviet Union, and headed by an embattled Boris Yeltsin, this republic has received the bulk of the world's attention and assistance as the former Soviet republics try to build new economies. Much has been made of the Russian republic's attempts at capitalism, which has been accompanied by a significant increase in the level of organized crime and by an increase not only of middle class citizens, but also of those who fall below the poverty line. This research examines the current state of economic development in Russia and considers the nation's future direction. Gross Domestic Product and the New Independent States The stress of moving Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. The result is that a number ofRussian companies have registered in other locations, such as Cyprus, andforeign investors are wary of investing directly in Russianenterprises.[13] Conclusion Although Russia has made considerable inroads toward a free marketsystem, and although it has perhaps the best chance of any of the formerSoviet republics to succeed in this endeavor, it is encumbered by aneconomy which has proven more difficult to move to a capitalist system thanmany, including Yeltsin, considered. There is considerable speculation inthe nation with many working only to get rich, and considerable waste asmany turn to the underground economy to avoid paying taxes in a system thatis cumbersome and difficult to understand. [3]Ibid., 7. Managers and bureaucratsthroughout the economy, particularly in the banking sector, embezzled moneyand invested it in GKOs and doubled the market for government securities tomore than $42 billion at the end of the year. [8]Peter Millar and Rupert Wright, "Boris's Billion Dollar Bankers,"The European, 25 September 1997, 1 . [12]"From Marx, Maybe to Market," S11. In addition to resource-based industries, it has developedlarge manufacturing capacities, particularly in machinery. [4]Ibid. Much has been madeof the Russian republic's attempts at capitalism, which has beenaccompanied by a significant increase in the level of organized crime andby an increase not only of middle class citizens, but also of those whofall below the poverty line. Jointventures between Russian companies and foreign companies are increasing,and are concentrated in the service sector where foreign companies perceiveless risk than in other sectors of the economy.[8] Russia has liberalized domestic trade and eliminated many non-tariffrestrictions on foreign trade. ----------------------- [1]Background Notes: Russia, Washington, DC: U.S. Oil and gas continue, however, to be the source of hard currency forRussia, which remains a leading producer and exporter of minerals, gold andfuels. Despitethese optimistic projections, there are very real problems with the GKOs.In 1996, for example, yields on government securities reached as high as35 percent and inflation dropped to 22 percent. Domestic investment is also slow to move into the capitalisticeconomy and presents a significant impediment to economic growth. This relativelylow inflation indicated that the nation had achieved some level of economicstability. Russia has had atrade surplus since 1993 with major trading partners in Europe and theUnited States. [11]"Russian Outlook Improving, But Still Uncertain," American MetalMarket, 17 June 1997, 29A. A currency "corridor" andother mechanisms have been used by the government since July 1995 tomaintain the ruble's stability and to help keep inflationary fears low.The average exchange rate for the ruble was 512 per dollar during 1996.[5] Fiscal Policy The 1996 budget provided a strong foundation for the government'seconomic stabilization program. The country hasestablished new ties in the world economy while maintaining links totraditional trading partners, although in a more limited capacity than inyears past. Russia also continues to supply large amounts ofenergy to the NIS at a discount.[1 ] Russia and the United States are also working to advance bilateral co-operation through eight working committees and several working groups knownas the U.S.-Russian Joint Commission on Economic and TechnologicalCooperation (the Gore-Chernomyrdin Commission). [6]"Boost for Reform," The Economist, 27 September 1997, 55. Total GKOsoutstanding reached nearly nine percent of GDP by December 1996. "Battle of the Bankers." Time, 2 October 1997, 66-68."Russian Outlook Improving, But Still Uncertain." American Metal Market, 17 June 1997, 29A-3 A."What's in a Nought?" The Economist, 9 August 1997, 63. Introduction With the breakup of the Soviet Union, there has been considerableinterest in the future of the Russian Republic. Unemployment was 9.3 percentof the nation's workforce during 1996, but this figure is calculated tounderestimate true unemployment because it does not take into account thoseworkers who are employed only part-time or those workers on voluntaryleave.[2] Natural Resources Russia has a considerable supply of natural resources, with highconcentrations of minerals in the Ural mountains and large supplies of oil,gas, coal and timber reserves in Siberia and the Russian Far East.However, many of these reserves are located in remote and unfavorable areasthat are difficult to develop and which are located far from Russian ports. Foreign direct investment in Russia was estimated at $11 billion in1995, a figure that is well below the nation's potential. State-subsidized imports were phased out in1994 along with the system of quotas and licensing for exports. However, the government experienced severerevenue shortfalls that resulted in higher than expected deficits (reaching6.1 percent of GDP). [9]Background Notes, 7. [13]Paul Quinn-Judge, "Battle of the Bankers," Time, 2 October 1997,66. Analysts calculate that although themagnitude of the decline may be in question, there is little question thatthe nation's economy is on a downward trend. [1 ]Ibid. However, problems arise because much ofthe tax burden is placed on companies. Toincrease foreign trade in the future, Russia applied in June 1993 to theGeneral Agreement on Tariffs and Trade (GATT), a predecessor to the WorldTrade Organization (WTO). Livestock farming is conductedin the north while the southern regions and Siberia produce grain.Agricultural production within Russia accounts for more than one-half ofthat for the entire NIS (primarily grain and potatoes). Gross Domestic Product and the New Independent States The stress of moving from a centrally planned economy to a free markethas proven difficult, but not impossible, for Russia. Department of State, June 1997."Boost for Reform." The Economist, 27 September 1997, 55-56."From Marx, Maybe to Market." The Economist, 12 July 1997, S11-S13.Millar, Peter and Rupert Wright. This research examines the current state ofeconomic development in Russia and considers the nation's future direction. BibliographyBackground Notes: Russia. This broughtgreater stability to the historically unstable ruble, but at the expense ofdestabilizing other currencies in the region. These analysts estimate that thenation is able to collect only 5 percent to 6 percent of the taxes thatare due, with the result that government programs are cut over the courseof the year as the revenue inflow falls short of the budgetprojections.[12] The overall tax burden is not excessive in Russia; at 31.2 percent ofGDP in 1994, it was slightly lower than that of the United States and muchlower than most European nations. Russiacontributes one-fourth of the world's production of fresh and frozen fish,and approximately one-third of the world's supply of canned fish.[3] Because of its terrain, there are relatively few areas which aresuitable for agriculture within Russia. In addition, the commission provides for high-leveldiscussions of high priority security and economic issues.[11] Taxation While the Russian economy has recovered and is in a stage ofrebuilding, there are significant problems which could impede the nation'sprogress if strong measures are not undertaken soon. Foreign direct investment hasbeen slow to materialize as foreigners weigh the cost of taxation, and theagricultural sector remains mired in what is left of the centrally plannedeconomy. [2]Ibid. Clearly, the nation has much work ahead of it if it is going tomake the free market work for Russians. [7]"From Marx, Maybe to Market," The Economist, 12 July 1997, S11. Composed of the greaterpart of the Soviet Union, and headed by an embattled Boris Yeltsin, thisrepublic has received the bulk of the world's attention and assistance asthe former Soviet republics try to build new economies. Russiainherited much of the defense industrial base of the Soviet Union;converting this to civilian use is a primary goal of the Yeltsingovernment. The transitionfrom a centrally planned economy to a market economy has been keenly feltin the agricultural sector, which has yet to fully undergo the radicalreform necessary for success.[4] Monetary Policy Inflation reached a high of 3 percent per month in January 1993;since that time, monthly inflation has steadily declined and ranged frombetween zero and two percent per month by the end of 1996. "Boris's Billion Dollar Bankers." The European, 25 September 1997, 8-12.Quinn-Judge, Paul. First, there is theproblem of the budget which began 1997 with an official deficit of ninepercent. The United States supports Russia's efforts tojoin the WTO, and Clinton and Yeltsin agreed to set 1998 as a target datefor Russia to gain admittance.[9] Currently, Russia's average tariff is 13 percent. Department ofState, June 1997, 6. Russia is responsible for more than one-half of the populationof the New Independent States (NIS), a coalition of members of the formerSoviet Union, and accounts for more than 6 percent of the gross domesticproduct (GDP) of the NIS.[1] Russia's own GDP fell approximately 38.5 percent between 1992 and1997, although these official statistics may not reflect significantactivity in the black market. China and Japan also have a strong trading presence inRussia, and the nation has a strong presence in the industrialized productsmarkets in the NIS. Russia also has large stocks of fish and its fishing industry ranksonly behind Japan, the United States and China in the world. The country is also burdened withan arid climate and inconsistent rainfall. The UnitedStates was the largest foreign investor, providing $2 billion of the totalinvestment. Washington, DC: U.S. The problem here is that the statistic is generally consideredunreliable and too low by most analysts. In mid-1993, Russia abolished the "ruble zone," which forcedother former Soviet republics to issue their own currency. In the meantime, workers ina number of industries had failed to receive their paychecks as funds werediverted to government securities.[7] Industry and Investment Russia is easily one of the most industrialized of the former Sovietrepublics. [5]"What's in a Nought?" The Economist, 9 August 1997, 63. The committees addressissues in the fields of science and technology, business development,space, energy policy, environmental protection, health, defense conversionand agriculture. The shortfall is generally attributed to a fall inoutput, an increase in the activity in the gray and black market, and anoverall cumbersome and unwieldy tax system which has rates high enough toencourage significant levels of tax evasion.[6] The government issues securities (GKO) which has grown in conjunctionwith the government's needs for noninflationary financing. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.