Russia's Economic Performance

Russia has emerged over the past 2 decades to become the 9th largest economy in the world today after radical economic reforms were implemented during the collapse of the Soviet Union in 1991. Under the Soviet Union, Russia had adopted a centrally planned economy that restricted free enterprise and international trade. | As Russia's economy has grown dramatically over the past 2 decades, so too has the quality of life in both economic and health related aspects. GDP per capita has increased at the same rate as the national GDP resulting in a growth of 47 million middle or working class people. | The fall of the Soviet Union brought about a transition into a more market based and globally integrated economy. Since then, Russia has seen stark increases in both GDP and GDP growth as exports of energy such as oil and gas, retrieved revenues of up to 20% of the GDP. | Living standards have also increased as indicated by the HDI index ranking them 66th in the world. Poverty rates have lowered from 40% to 13%, education and health are easily obtained and the establishment of a strong industrial sector has led to more jobs and income. | During the GFC however, Russia recorded a negative 8% growth in GDP as oil prices plummeted across the world. Their reliance on exporting raw resources led to a year long recession yet Russia was able to recover through the excess income being stored in a previous macroeconomic policy called the "Stabilization Fund of Russia". The GDP outlook suggests the growth trend will be at around 3-4% for future years. | While Russia's economic growth and higher quality of life has seen beneficial implications upon their society, the distribution of wealth is unbalanced resulting in the rich getting richer and the poor struggling to cope with the inflated costs of living. The income disparity has seen the gap between the rich and poor widen every year with only 20% of the population successfully prospering from the switch to a market economy. |