THE RUSSIAN ECONOMY.   Term Paper ID:30332 Click to get this paper

Essay Subject: Discusses Russia's transition to a western-style Capitalist country after 1991.... More...

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Paper Abstract: Discusses Russia's transition to a western-style Capitalist country after 1991. Russian socialist system development of a market economy built on legal (collective farm markets) and illegal (underground) market economy. Population statistics. Economic data. GDP. Investing in Russia. Foreign trade. Russian budget deficits. Labor force. Exports/Imports. External debt. Paper Introduction: Since the time of the failed coup attempt in 1991, the Russian economy has been in a transition to a Western-style capitalist country. This only partially identifies the goal, since there are several different types of Western capitalist country. Each of the Western models is sufficiently similar, though, that the path taken by the Russian socialist system will be clearly in a new direction (Leitzel, 1995, 1). Russia developed a market economy and has included capitalist-style behavior for as much as 25 percent of all economic activity in the pre-reform USSR, some of which was even legal. The legal portion was dominated by collective farm markets. Prices at these markets were more or less unregulated. In addition, some 100,000 Soviet citizens engaged legally in small-scale crafts and trades. The rest of the Soviet market 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. CIA--The World Factbook 1999.www.odci.gov/cia/publications/factbook/rs.html. (1995). Foreign companies that invested in Russian firms serving thedomestic consumer market, including beer, tobacco and confectioners,survived the 1998 crash better than most because the collapse of the rublegave Russian producers a captivemarket and Russians simply could not afford imported goods. ECONOMIC DATA Russia is still struggling to establish a modern market economy andachieve strong economic growth. The rest of the Soviet market economy wastechnically illegal and so hidden and described as the "undergroundeconomy" (Leitzel, 1995, 27). By the end of 1997, inflation had been brought undercontrol, the ruble was stabilized, and an ambitious privatization programhad transferred thousands of enterprises to private ownership. The banking system is technically insolvent and has huge off-balance-sheet long ruble, short dollar positions (Hanke, 1998, 15 ).There has also been a large annual decline in population, estimated by someobservers at 8 , people, caused by environmental hazards, the declinein health care, and the unwillingness of people to have children.GDP (real growth rate): -5% (1998 est.)GDP (per capita): purchasing power parity--$4, (1998 est.)GDP--composition by sector: agriculture: 7% industry: 39% services: 54% (1997)Population below poverty line: 28.6% (1998 est.)Household income or consumption by percentage share: lowest 1 %: 3% highest 1 %: 22.2% (1993)Inflation rate (consumer prices): 84% (1998 est.)Labor force: 66 million (1997)Unemployment rate: 11.5% (1998 est.) with considerable additional underemploymentBudget: revenues: $4 billion expenditures: $63 billionIndustries: complete range of mining and extractive industries producingcoal, oil, gas, chemicals, and metals; all forms of machine building fromrolling mills to high-performance aircraft and space vehicles;shipbuilding; road and rail transportation equipment; communicationsequipment; agricultural machinery, tractors, and construction equipment;electric power generating and transmitting equipment; medical andscientific instruments; consumer durables, textiles, foodstuffs,handicraftsIndustrial production growth rate: -5.5% (1998 est.)Agriculture--products: grain, sugar beets, sunflower seed, vegetables, fruits; beef, milkExports: $71.8 billion (1998 est.)Exports--commodities: petroleum and petroleum products, natural gas, woodand wood products, metals, chemicals, and a wide variety of civilian andmilitary manufacturesImports: $58.5 billion (1998 est.)Imports--commodities: machinery and equipment, consumer goods, medicines,meat, grain, sugar, semi-finished metal productsImports--partners: Europe, North America, Japan, and less developedcountriesDebt--external: $164 billion (year end 1998)(CIA -- The World Factbook 1999). Considerable progress was made in the Russian economy immediatelyafter the dissolution of the Soviet Union: "In less than five years, mostwholesale and retail prices have been freed and store shelves are full"(Bush, 1996, 3 ). "Capitalism without Banks."Forbes, 15 -151. Prices at these markets were more or lessunregulated. Indicators show that real disposable incomes have fallen more than 5 percent since 1991. The transition has built on both the legaland the illegal market economy. The federal budget deficit was over 3 percent of GDP in1991 and dropped to 3.5 percent in 1995, according to the Russiangovernment. Since thecrash, the fastest growing Russian sectors are in machinery, forestry,textiles, food and construction materials, once again concentrating onserving the domestic market (Stratfor's Intelligence, 2 ). In 1996, monthly inflation was kept below 3 percent.Foreign trade suffered greatly with the severance of Russia from the otherformer Soviet republics but then largely recovered. (1998, September 7). POPULATION STATISTICSPopulation: 146,393,569 (July 1999 est.)Age structure: -14 years: 19% (male 14,224, 33; female 13,666,44 )15-64 years: 68% (male 48,4 7,4 9; female 51,768,664)65 years and over: 13% (male 5,698,356; female 12,628,667) (1999 est.)Population growth rate: - .33% (1999 est.)Birth rate: 9.64 births/1, population (1999 est.)Death rate: 14.96 deaths/1, population (1999 est.)Net migration rate: 2. Among the ongoing problems are an undeveloped legal and financialsystem, poor progress on restructuring the military-industrial complex, andpersistently large budget deficits, largely reflecting the inability ofsuccessive governments to collect sufficient taxes. However, the Asian financial crisis in 1998 contributedto a sharp decline in Russia's earnings from oil exports and resulted in anexodus of foreign investors. Firms selling largely within Russia itselfare problematic and face uncertainties in terms of the buying power of thepeople, which will be curtailed for some time. Hanke, S.H. FUNCTIONAL STRATEGY Companies investing in Russia should do so in firms that are in thefastest growing sectors and that have trade ties and trade growth for nowand in the immediate future. Yearly inflation was 2,65 percent in 1992 and was reduced to131 percent by 1995. References Bush, K. The size of defensespending fell from over 2 percent of GDP in the 198 s to around 5 percenttoday. The changes have been considerable, but the country has much moreto do if it is to become a capitalist economy (Bush, 1996, 3 ). You cannot run a capitalist system without banks, and Russia has no real banks. As one analyst wrote, Russia's problems are beyond solving by IMF loans or devaluations. An American company canbest compete by helping develop an economic sector for foreign trade, whilethe development of a Russian market will take much more time and may bedependent on how much exporting Russia can manage to achieve in the nextdecade or so in order to raise the living standards of the Russian worker.The low population growth at the present time seems to presage furtherproblems down the road, though this situation could change at any time ifthe economy experiences greater stability. (1996, September). "A new new economic plan?" The World &I, 3 -37. Russian GDP has contracted an estimated43% since 1991, despite the country's wealth of natural resources, its well-educated population, and its diverse, although increasingly dilapidated,industrial base. Some 55.2 million people, nearly 38 percent of theRussian population, earned incomes below the official poverty line in thefirst quarter of 1999. Russia developed a market economy and has included capitalist-stylebehavior for as much as 25 percent of all economic activity in the pre-reform USSR, some of which was even legal. 5 male(s)/femaleunder 15 years: 1. Stratfor Intelligence, www.stratfor.com/CIS/countries/Russia/russia2 /economy7.htm. Someimportant market-oriented laws were also passed, including a commercialcode governing business relations and an arbitration court for resolvingeconomic disputes. The private sector then accounted for more than 6 percent of GDP. In addition, some 1 , Soviet citizens engaged legally insmall-scale crafts and trades. New York: Routledge. Russian economic reform. "Russia" (2 ). Unemployment hassoared. Since the time of the failed coup attempt in 1991, the Russianeconomy has been in a transition to a Western-style capitalist country.This only partially identifies the goal, since there are several differenttypes of Western capitalist country. Leitzel, J. Each of the Western models issufficiently similar, though, that the path taken by the Russian socialistsystem will be clearly in a new direction (Leitzel, 1995, 1). In August 1998, the government allowed theruble to fall precipitously and stopped payment on $4 billion in rublebonds. 5 migrant(s)/1, population (1999 est.) Sex ratio:at birth: 1. Inflation reached 84 percent in 1998, and wasexpected to totalsomewhere between 45 and 1 3 percent for 1999. 4 male(s)/female15-64 years: .94 male(s)/female65 years and over: .45 male(s)/femaletotal population: .88 male(s)/female (1999 est.)Infant mortality rate: 23 deaths/1, live births (1999 est.) Lifeexpectancy at birth:total population: 65.12 yearsmale: 58.83 yearsfemale: 71.72 years (1999 est.)Total fertility rate: 1.34 children born/woman (1999 est.)(CIA -- The World Factbook 1999). The legal portion was dominatedby collective farm markets. "Russia" (1999). 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.