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Russia and Economy
Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is
the largest country in the world, covering over 17 million square kilometres (6.6×106 sq mi),
and encompassing more than one-eighth of the Earth's inhabited land area. Russia extends
across eleven time zones, and has borders with sixteen sovereign nations. It has a
population of 146.2 million; and is the most populous country in Europe, and the ninth-most
populous country in the world. Moscow, the capital, is the largest city in Europe, while Saint
Petersburg is the nation's second-largest city and cultural centre. Russians are the
largest Slavic and European nation; they speak Russian, the most spoken Slavic language,
and the most spoken native language in Europe.
 The Russian republic, by virtue of its great size and abundant natural resources, played a leading role
in the economy of the Soviet Union. In the first decades of the Soviet regime, resources made
possible great economic advances, including the rapid development of mining, metallurgy, and heavy
engineering, the expansion of the railway network, and a massive increase in the energy supply. In
addition to further growth in established industries—especially in the production of oil, gas, and
electricity and in the chemical industries—there was a marked diversification in industrial output,
including a limited expansion in consumer goods.
 The economic foundation of the country itself remained similar to that which had been developed
during the Soviet period. For purposes of description it is convenient to refer to the official set of 11
traditional economic regions into which Russia is divided.
 Russian economy enjoys a number of strong strengths. Russia is the largest nation in the world in
terms of landmass with abundant oil, gas and other natural resources, low debt and high labour
participation. Its leading global position in space technology indicates untapped potential in other
sectors. Russia is the 6th largest economy in the world in GDP based on purchasing power parity and
has the 9th largest population. Russia also represents the largest retail trade market in Europe.
 There falls many sectors in Russia like Energy, Mining, Agriculture, Aerospace, Chemical industries,
Defence industries, Electronics and services like Retail, Telecommunication, Transportation,
Construction, Insurance, Information technology and tourism.
 Russia is a multinational state and the inhabitants of Russia are quite diverse. Most are ethnic
Russians, but there also are more than 120 other ethnic groups present , speaking many languages
and following disparate religious and cultural traditions. Most of the Russian population is
concentrated in the European portion of the country, especially in the fertile region
surrounding Moscow, the capital and St. Petersburg (formerly Leningrad) are the two most important
cultural and financial centres in Russians are also populous in Asia, however; beginning in the 17th
century, and particularly pronounced throughout much of the 20th century, a steady flow of ethnic
Russians and Russian-speaking people moved eastward into Siberia, now flourished
 Russia is a secular state by constitution, and its largest religion is Christianity. It has the
world's largest Orthodox population. As of a different sociological surveys on religious adherence;
between 41% to over 80% of the total population of Russia adhere to the Russian Orthodox Church,
the 2010 Census, roughly 81% of the population were ethnic Russians, and rest of the 19% of the
population were peoples of diverse origins, while roughly 85% of Russia's population was of European
descent, of which the vast majority were Slavs, with a substantial minority of Finno-Ugric, Germanic,
and other peoples.
 There are 22 republics in Russia, designated to have their own ethnicities, cultures, and languages.
In 13 of them, ethnic Russians consist a minority. According to the United Nations, Russia's immigrant
population is the third-largest in the world, numbering over 11.6 million; most of which are
from post-Soviet states, mainly Ukrainians.
Russia Today
 The economy of Russia is an upper-middle income mixed and transition economy, with enormous
natural resources, particularly oil and natural gas. It is the fifth-largest economy in Europe, the
world's eleventh-largest economy by nominal GDP and the sixth-largest by PPP. The current
population of Russia is 146,749000 (2020) with a GDP of $1.710 trillion (nominal, 2021 est.) and
$4.328 trillion (PPP, 2021 est.). The GDP growth seen in 2018, 2019, 2020, 2021 are 2.5%, 1.3%, -
6.6%,and 4.1%. The GDP per capita of country stands at $11,654 (nominal, 2021 est.) and $11,654
(nominal, 2021 est.). The estimated inflation rate of Russia by 2020 is 3.2%. The major sectors
contribution to GDP are Agriculture (4.7%), Industries(32.4%), Services(62.3%).
 The economic development of the country has been uneven geographically; with the country's
capital Moscow contributing a very large share of the country's GDP.
 Soon after independence, the Russian government announced a much more ambitious program of
political and economic reform. The program included a transformation of the economy from the
principles of state planning and administrative direction to market-based economics.
 Some of global economic alliances Russia belongs to are BRICS, G20, G8, CIS, OSZE, UN, UNESCO
AND WTO.
 According to the Russian economic ministry in July 2014, GDP growth in the first half of
2014 was 1%. The ministry projected growth of 0.5% for 2014. The Russian economy grew
by a better than expected 0.6% in 2014. Russia is rated one of the most unequal of the
world’s major economies.
 Under President Vladimir Putin, the Russian economy has gone through two distinct
periods. From 1999-2008, Russia boomed with an average growth of 7 percent a year.
Since 2009, Russia’s economy has stagnated with an average annual growth of 1 percent.
The coronavirus and the oil price war have brought Russia into a new economic crisis.
 Russia has a mixed economy. It's come a long way since the 1991 breakup of the Soviet
Union and its command economy. The Russian economy is volatile. Since 1989 its
institutional environment was transformed from a socialist command economy to a
capitalistic market system. Its industrial structure dramatically shifted from over-
investment in manufacturing and agriculture to market services and mining, especially oil
and gas. It is seen as there are four main characteristics of the Russian economy that have
shaped the system and persisted despite the political upheavals. First of all the weakness of
the legal system means that impartial courts do not rule and contracts are problematic.
Second is the underdevelopment of modern economic activities. Third is technological
underdevelopment. And fourth lower living standards compared to Western Europe and
North America.
 Today, the government only owns the oil and gas industries. Gazprom is Russia’s state-owned
gas company and owns the world's largest gas reserves. But the reserves are declining and
prices have fallen. The other former state industries have been privatized. It is believed by
experts that Russia's economy is controlled by a small circle of powerful Oligarchs of the
former Soviet republics who rapidly accumulated wealth during the era of Russian
privatization in the aftermath of the dissolution of the Soviet Union in the 1990s.
 In 2019 Russia was the number 11 economy in the world in terms of GDP (current US$), the
number 13 in total exports, the number 21 in total imports, the number 65 economy in terms of
GDP per capita (current US$) and the number 44 most complex economy according to the
Economic Complexity Index (ECI).
 The value of merchandise exports from Russia totaled $ 426 billion in 2019. Overall commodity
exports from Russia decreased by 5.48% compared to 2018. Merchandise exports decreased by $
24 billion (the value of merchandise exports from Russia amounted to $451 billion in 2018).
• Imports: The top imports of Russia are Cars ($11B), Packaged Medicaments ($10.2B), Vehicle
Parts ($8.21B), Broadcasting Equipment ($6.75B), and Planes, Helicopters, and/or
Spacecraft($4.81B)
• Exports: The top exports of Russia are Crude Petroleum ($123B), Refined
Petroleum ($66.2B), Petroleum Gas ($26.3B), Coal Briquettes($17.6B), and Wheat ($8.14B
• Russia's imports (2019) by country: China with a share of 21% (54 billion US$), Germany with
a share of 10.1% (25 billion US$), Belarus with a share of 5.52% (13.6 billion US$), USA with a
share of 5.43% (13.4 billion US$), Italy with a share of 4.41% (10.9 billion US$), Japan with a
share of 3.62% (8.96 billion US$), France with a share of 3.47% (8.59 billion US$), Korea with a
share of 3.23% (8 billion US$), Kazakhstan with a share of 2.31% (5.71 billion US$), Poland with
a share of 2.05% (5.07 billion US$)
 Russia's exports (2019) by country: China with a share of 13.4% (57 billion US$), Netherlands
with a share of 10.4% (44 billion US$), Germany with a share of 6.57% (28 billion US$), Belarus
with a share of 5.08% (21 billion US$), Turkey with a share of 4.95% (21 billion US$), Korea
with a share of 3.83% (16.3 billion US$), Italy with a share of 3.36% (14.3 billion US$),
Kazakhstan with a share of 3.34% (14.2 billion US$), United Kingdom with a share of 3.11%
(13.2 billion US$), USA with a share of 3.09% (13.1 billion US$)
USSR
USSR
 The Soviet Union, officially the Union of Soviet Socialist Republics, (USSR), was a socialist state that
spanned most of Europe and Asia during its existence from 1922 to 1991. It was nominally
a federal union of multiple national republics; in practice its government and economy were
highly centralized until its final years. The country was a one-party state prior to 1990 governed
by Communist Party of the Soviet Union.
 The Soviet Union had its roots in the October Revolution of 1917 when the Bolsheviks, headed
by Vladimir Lenin, overthrew the Provisional Government that had earlier replaced the monarchy of
the Russian Empire. They established the Russian Soviet Republic, The Red Army expanded and
helped local Bolsheviks take power, establishing Soviet. By 1922, the Bolsheviks had emerged
victorious, forming the Soviet Union with the unification of
Russian, Transcaucasian, Ukrainian and Byelorussian republics. The New Economic Policy (NEP),
which was introduced by Lenin, led to a partial return of a free market and private property; this
resulted in a period of economic recovery.
 Beginning in 1928, the course of the Soviet Union's economy was guided by a series of five-year
plans under Stalin’s rule. By the 1950s, the Soviet Union had rapidly evolved from a mainly agrarian
society into a major industrial power. By the 1970s the Soviet Union entered the Era of Stagnation.
The complex demands of the modern economy and inflexible administration overwhelmed and
constrained the central planners. The volume of decisions facing planners in Moscow became
overwhelming.
 From 1975 to 1985, corruption and data fiddling became common practice
among bureaucracy to report satisfied targets and quotas thus entrenching the crisis. Starting in
1986, Mikhail Gorbachev attempted to address economic problems by moving towards a market-
oriented socialist economy. Gorbachev's policies failed to rejuvenate the Soviet economy;
instead, a process of political and economic disintegration culminated in the breakup of the
Soviet Union in 1991.
 After the collapse of the Soviet Union in 1991 and collapse of Soviet Russia's controlled economy,
a new Russian Federation was created under Boris Yeltsin in 1991. The Russian Federation had
multiple economic reforms, including privatization and market and trade liberalization because
of collapse of communism. The economy is much more stable than in the early 1990s, but
inflation still remains an issue for Russia. Historically and currently, the Russian economy has
differed sharply from major developed economies in terms of a weak legal system,
underdevelopment of modern economic activities, technological backwardness, and lower living
standards. Since then, Russia underwent a radical transformation, moving from a centrally
planned economy to a globally integrated market economy. Corrupt and
haphazard privatization processes turned over major state-owned firms to politically connected
"oligarchs", which has left equity ownership highly concentrated. In 2007 the World
Bank declared that the Russian economy achieved "unprecedented macroeconomic stability".
Until October 2007, Russia maintained impressive fiscal discipline with budget surpluses every
year from 2000.
Russia has seen many Economical changes and introduction of numerous policies and reforms throughout
history ranging from Soviet period to today’s Russia.
 10 Years of Economic Growth was introduced in beginning in 1999 and through mid-2008, Russia’s
economic fortunes reversed on many accounts. The radical improvement was arguably a factor in the wide
popularity that Putin enjoyed during his term. At the same time, improved economic conditions brought a
significant degree of economic stability to Russia. Two fundamental and interdependent goals —
macroeconomic stabilization and economic restructuring — the transition from central planning to a
market-based economy. The former entailed implementing fiscal and monetary policies that promote
economic growth in an environment of stable prices and exchange rates. The latter required establishing
the commercial, and institutional entities — banks, private property, and commercial legal codes— that
permit the economy to operate efficiently.
 On 1 January 2004, the Government of Russia established the Stabilization Fund or Wealth Fund of the
Russian Federation as a part of the federal budget to bring stability and reduce the chance of inflation or
any possible financial crisis.
 Russia was expected to have a Government Budget deficit of $21 billion in 2016. The
budget deficit narrowed to 0.6% of GDP in 2017 from 2.8% in 2016 under Fiscal Policy.
 During Putin’s first presidential term (2000-2004), his government initiated some
critical economic reforms as Structural Economic Reforms that helped Russia emerge
from the post-1998 financial crisis period more stable and stronger. During this period,
reformers seemed to play the dominant role in economic policymaking.
Some other policies introduce for the welfare of the society are:
 The constitution of Russia guarantees free, universal health care for all Russian
citizens, through a compulsory state health insurance program.
 In the 2000s, in order to create higher education and research institutions of
comparable scale in Russian regions, the government launched a program of
establishing federal universities, mostly by merging existing large regional
universities and research institutes and providing them with special funding.
 Forecasts point to moderate acceleration in economic activity growth, from the 1.5% estimated for
2017 to around 2% in 2018 and 2019, forecasted 3.2 percent in 2021, followed by 3.2% and 2.3% in
2022 and 2023, respectively with a gradual decline during pandemic .Medium-term projections
suggest Russia will post the smallest GDP growth of all major emerging economies in 2017-2027.
 Three key factors weigh heavy on the Russian economy: its dependence on commodities,
demographic decline and institutional quality with room for improvement. The first factor come as
most analysts predict moderate price rises in oil for the years of Putin’s presidency, for which
referendum passed, allowing him to remain in power until 2036.
 Such proactive foreign policies are strongly supported by Russians, 87% of whom agree with the
President’s current approach to foreign affairs. The use of the economy for political aims is
therefore unlikely to change over the next few years. A logical response by economic policy would
be to promote far-reaching structural reforms.
Спасибо (Spasiba)

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Economy of Russia

  • 1.
  • 3. Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the largest country in the world, covering over 17 million square kilometres (6.6×106 sq mi), and encompassing more than one-eighth of the Earth's inhabited land area. Russia extends across eleven time zones, and has borders with sixteen sovereign nations. It has a population of 146.2 million; and is the most populous country in Europe, and the ninth-most populous country in the world. Moscow, the capital, is the largest city in Europe, while Saint Petersburg is the nation's second-largest city and cultural centre. Russians are the largest Slavic and European nation; they speak Russian, the most spoken Slavic language, and the most spoken native language in Europe.
  • 4.  The Russian republic, by virtue of its great size and abundant natural resources, played a leading role in the economy of the Soviet Union. In the first decades of the Soviet regime, resources made possible great economic advances, including the rapid development of mining, metallurgy, and heavy engineering, the expansion of the railway network, and a massive increase in the energy supply. In addition to further growth in established industries—especially in the production of oil, gas, and electricity and in the chemical industries—there was a marked diversification in industrial output, including a limited expansion in consumer goods.  The economic foundation of the country itself remained similar to that which had been developed during the Soviet period. For purposes of description it is convenient to refer to the official set of 11 traditional economic regions into which Russia is divided.  Russian economy enjoys a number of strong strengths. Russia is the largest nation in the world in terms of landmass with abundant oil, gas and other natural resources, low debt and high labour participation. Its leading global position in space technology indicates untapped potential in other sectors. Russia is the 6th largest economy in the world in GDP based on purchasing power parity and has the 9th largest population. Russia also represents the largest retail trade market in Europe.  There falls many sectors in Russia like Energy, Mining, Agriculture, Aerospace, Chemical industries, Defence industries, Electronics and services like Retail, Telecommunication, Transportation, Construction, Insurance, Information technology and tourism.
  • 5.
  • 6.  Russia is a multinational state and the inhabitants of Russia are quite diverse. Most are ethnic Russians, but there also are more than 120 other ethnic groups present , speaking many languages and following disparate religious and cultural traditions. Most of the Russian population is concentrated in the European portion of the country, especially in the fertile region surrounding Moscow, the capital and St. Petersburg (formerly Leningrad) are the two most important cultural and financial centres in Russians are also populous in Asia, however; beginning in the 17th century, and particularly pronounced throughout much of the 20th century, a steady flow of ethnic Russians and Russian-speaking people moved eastward into Siberia, now flourished  Russia is a secular state by constitution, and its largest religion is Christianity. It has the world's largest Orthodox population. As of a different sociological surveys on religious adherence; between 41% to over 80% of the total population of Russia adhere to the Russian Orthodox Church, the 2010 Census, roughly 81% of the population were ethnic Russians, and rest of the 19% of the population were peoples of diverse origins, while roughly 85% of Russia's population was of European descent, of which the vast majority were Slavs, with a substantial minority of Finno-Ugric, Germanic, and other peoples.  There are 22 republics in Russia, designated to have their own ethnicities, cultures, and languages. In 13 of them, ethnic Russians consist a minority. According to the United Nations, Russia's immigrant population is the third-largest in the world, numbering over 11.6 million; most of which are from post-Soviet states, mainly Ukrainians.
  • 8.  The economy of Russia is an upper-middle income mixed and transition economy, with enormous natural resources, particularly oil and natural gas. It is the fifth-largest economy in Europe, the world's eleventh-largest economy by nominal GDP and the sixth-largest by PPP. The current population of Russia is 146,749000 (2020) with a GDP of $1.710 trillion (nominal, 2021 est.) and $4.328 trillion (PPP, 2021 est.). The GDP growth seen in 2018, 2019, 2020, 2021 are 2.5%, 1.3%, - 6.6%,and 4.1%. The GDP per capita of country stands at $11,654 (nominal, 2021 est.) and $11,654 (nominal, 2021 est.). The estimated inflation rate of Russia by 2020 is 3.2%. The major sectors contribution to GDP are Agriculture (4.7%), Industries(32.4%), Services(62.3%).  The economic development of the country has been uneven geographically; with the country's capital Moscow contributing a very large share of the country's GDP.  Soon after independence, the Russian government announced a much more ambitious program of political and economic reform. The program included a transformation of the economy from the principles of state planning and administrative direction to market-based economics.  Some of global economic alliances Russia belongs to are BRICS, G20, G8, CIS, OSZE, UN, UNESCO AND WTO.
  • 9.  According to the Russian economic ministry in July 2014, GDP growth in the first half of 2014 was 1%. The ministry projected growth of 0.5% for 2014. The Russian economy grew by a better than expected 0.6% in 2014. Russia is rated one of the most unequal of the world’s major economies.  Under President Vladimir Putin, the Russian economy has gone through two distinct periods. From 1999-2008, Russia boomed with an average growth of 7 percent a year. Since 2009, Russia’s economy has stagnated with an average annual growth of 1 percent. The coronavirus and the oil price war have brought Russia into a new economic crisis.
  • 10.  Russia has a mixed economy. It's come a long way since the 1991 breakup of the Soviet Union and its command economy. The Russian economy is volatile. Since 1989 its institutional environment was transformed from a socialist command economy to a capitalistic market system. Its industrial structure dramatically shifted from over- investment in manufacturing and agriculture to market services and mining, especially oil and gas. It is seen as there are four main characteristics of the Russian economy that have shaped the system and persisted despite the political upheavals. First of all the weakness of the legal system means that impartial courts do not rule and contracts are problematic. Second is the underdevelopment of modern economic activities. Third is technological underdevelopment. And fourth lower living standards compared to Western Europe and North America.  Today, the government only owns the oil and gas industries. Gazprom is Russia’s state-owned gas company and owns the world's largest gas reserves. But the reserves are declining and prices have fallen. The other former state industries have been privatized. It is believed by experts that Russia's economy is controlled by a small circle of powerful Oligarchs of the former Soviet republics who rapidly accumulated wealth during the era of Russian privatization in the aftermath of the dissolution of the Soviet Union in the 1990s.
  • 11.  In 2019 Russia was the number 11 economy in the world in terms of GDP (current US$), the number 13 in total exports, the number 21 in total imports, the number 65 economy in terms of GDP per capita (current US$) and the number 44 most complex economy according to the Economic Complexity Index (ECI).  The value of merchandise exports from Russia totaled $ 426 billion in 2019. Overall commodity exports from Russia decreased by 5.48% compared to 2018. Merchandise exports decreased by $ 24 billion (the value of merchandise exports from Russia amounted to $451 billion in 2018). • Imports: The top imports of Russia are Cars ($11B), Packaged Medicaments ($10.2B), Vehicle Parts ($8.21B), Broadcasting Equipment ($6.75B), and Planes, Helicopters, and/or Spacecraft($4.81B) • Exports: The top exports of Russia are Crude Petroleum ($123B), Refined Petroleum ($66.2B), Petroleum Gas ($26.3B), Coal Briquettes($17.6B), and Wheat ($8.14B
  • 12. • Russia's imports (2019) by country: China with a share of 21% (54 billion US$), Germany with a share of 10.1% (25 billion US$), Belarus with a share of 5.52% (13.6 billion US$), USA with a share of 5.43% (13.4 billion US$), Italy with a share of 4.41% (10.9 billion US$), Japan with a share of 3.62% (8.96 billion US$), France with a share of 3.47% (8.59 billion US$), Korea with a share of 3.23% (8 billion US$), Kazakhstan with a share of 2.31% (5.71 billion US$), Poland with a share of 2.05% (5.07 billion US$)  Russia's exports (2019) by country: China with a share of 13.4% (57 billion US$), Netherlands with a share of 10.4% (44 billion US$), Germany with a share of 6.57% (28 billion US$), Belarus with a share of 5.08% (21 billion US$), Turkey with a share of 4.95% (21 billion US$), Korea with a share of 3.83% (16.3 billion US$), Italy with a share of 3.36% (14.3 billion US$), Kazakhstan with a share of 3.34% (14.2 billion US$), United Kingdom with a share of 3.11% (13.2 billion US$), USA with a share of 3.09% (13.1 billion US$)
  • 13. USSR
  • 14. USSR  The Soviet Union, officially the Union of Soviet Socialist Republics, (USSR), was a socialist state that spanned most of Europe and Asia during its existence from 1922 to 1991. It was nominally a federal union of multiple national republics; in practice its government and economy were highly centralized until its final years. The country was a one-party state prior to 1990 governed by Communist Party of the Soviet Union.  The Soviet Union had its roots in the October Revolution of 1917 when the Bolsheviks, headed by Vladimir Lenin, overthrew the Provisional Government that had earlier replaced the monarchy of the Russian Empire. They established the Russian Soviet Republic, The Red Army expanded and helped local Bolsheviks take power, establishing Soviet. By 1922, the Bolsheviks had emerged victorious, forming the Soviet Union with the unification of Russian, Transcaucasian, Ukrainian and Byelorussian republics. The New Economic Policy (NEP), which was introduced by Lenin, led to a partial return of a free market and private property; this resulted in a period of economic recovery.  Beginning in 1928, the course of the Soviet Union's economy was guided by a series of five-year plans under Stalin’s rule. By the 1950s, the Soviet Union had rapidly evolved from a mainly agrarian society into a major industrial power. By the 1970s the Soviet Union entered the Era of Stagnation. The complex demands of the modern economy and inflexible administration overwhelmed and constrained the central planners. The volume of decisions facing planners in Moscow became overwhelming.
  • 15.  From 1975 to 1985, corruption and data fiddling became common practice among bureaucracy to report satisfied targets and quotas thus entrenching the crisis. Starting in 1986, Mikhail Gorbachev attempted to address economic problems by moving towards a market- oriented socialist economy. Gorbachev's policies failed to rejuvenate the Soviet economy; instead, a process of political and economic disintegration culminated in the breakup of the Soviet Union in 1991.  After the collapse of the Soviet Union in 1991 and collapse of Soviet Russia's controlled economy, a new Russian Federation was created under Boris Yeltsin in 1991. The Russian Federation had multiple economic reforms, including privatization and market and trade liberalization because of collapse of communism. The economy is much more stable than in the early 1990s, but inflation still remains an issue for Russia. Historically and currently, the Russian economy has differed sharply from major developed economies in terms of a weak legal system, underdevelopment of modern economic activities, technological backwardness, and lower living standards. Since then, Russia underwent a radical transformation, moving from a centrally planned economy to a globally integrated market economy. Corrupt and haphazard privatization processes turned over major state-owned firms to politically connected "oligarchs", which has left equity ownership highly concentrated. In 2007 the World Bank declared that the Russian economy achieved "unprecedented macroeconomic stability". Until October 2007, Russia maintained impressive fiscal discipline with budget surpluses every year from 2000.
  • 16. Russia has seen many Economical changes and introduction of numerous policies and reforms throughout history ranging from Soviet period to today’s Russia.  10 Years of Economic Growth was introduced in beginning in 1999 and through mid-2008, Russia’s economic fortunes reversed on many accounts. The radical improvement was arguably a factor in the wide popularity that Putin enjoyed during his term. At the same time, improved economic conditions brought a significant degree of economic stability to Russia. Two fundamental and interdependent goals — macroeconomic stabilization and economic restructuring — the transition from central planning to a market-based economy. The former entailed implementing fiscal and monetary policies that promote economic growth in an environment of stable prices and exchange rates. The latter required establishing the commercial, and institutional entities — banks, private property, and commercial legal codes— that permit the economy to operate efficiently.  On 1 January 2004, the Government of Russia established the Stabilization Fund or Wealth Fund of the Russian Federation as a part of the federal budget to bring stability and reduce the chance of inflation or any possible financial crisis.
  • 17.  Russia was expected to have a Government Budget deficit of $21 billion in 2016. The budget deficit narrowed to 0.6% of GDP in 2017 from 2.8% in 2016 under Fiscal Policy.  During Putin’s first presidential term (2000-2004), his government initiated some critical economic reforms as Structural Economic Reforms that helped Russia emerge from the post-1998 financial crisis period more stable and stronger. During this period, reformers seemed to play the dominant role in economic policymaking. Some other policies introduce for the welfare of the society are:  The constitution of Russia guarantees free, universal health care for all Russian citizens, through a compulsory state health insurance program.  In the 2000s, in order to create higher education and research institutions of comparable scale in Russian regions, the government launched a program of establishing federal universities, mostly by merging existing large regional universities and research institutes and providing them with special funding.
  • 18.  Forecasts point to moderate acceleration in economic activity growth, from the 1.5% estimated for 2017 to around 2% in 2018 and 2019, forecasted 3.2 percent in 2021, followed by 3.2% and 2.3% in 2022 and 2023, respectively with a gradual decline during pandemic .Medium-term projections suggest Russia will post the smallest GDP growth of all major emerging economies in 2017-2027.  Three key factors weigh heavy on the Russian economy: its dependence on commodities, demographic decline and institutional quality with room for improvement. The first factor come as most analysts predict moderate price rises in oil for the years of Putin’s presidency, for which referendum passed, allowing him to remain in power until 2036.  Such proactive foreign policies are strongly supported by Russians, 87% of whom agree with the President’s current approach to foreign affairs. The use of the economy for political aims is therefore unlikely to change over the next few years. A logical response by economic policy would be to promote far-reaching structural reforms.