What political impediments exist to the reform of the Russia

After the collapse of the Soviet Union, in 1992 Russia inherited a failing economy. Although post-soviet Russia is rich in raw materials and minerals, such as, crude oil and gas, the economy was still in a downwards spiral. In 1992 Russia’s Economy had reached its lowest in many years, Russia’s annual percentage growth of GDP reach a dramatic –18.5% , GDP according to one report fell as much as 83% and capital investment by also fell by 90% . Except for energy resources, Russian produces very little apart from is key raw materials and most of the consumer goods are imported, especially in the large cities. This means large amount of revenue is going out of Russia rather than coming in. The failing economy also had serious spin off effects on other parts of Russia, including; a huge increase in poverty; a large increase in unemployment; malnutrition has become the normal attire amongst school children; and a worryingly large drop in life expectancy, in 1992, it was recorded that the life expectancy for men dropped to 58.

The structure of Russia’s economy before reform was mainly state owned, with 85% of the activity being state owned industry o

As Russia was in such a bad state, it is going to take such a long time to get it back on track. For example, as of 1992, ‘Russia’s total foreign debt amounted to $74,3 billion and it was expected to increase to around $80 billion by the end of 1992’ , despite the reform. Even if economic growth were miraculously to resume tomorrow, Russia would need decades to regain what it has lost in the nineties and nothing can retrieve the millions of lives already lost due to the rapid increase of poverty, poor standards of living, cut short by the “transition from Communism to free-market capitalism” . In his article “Why Call it Reform”, Professor Stephen Shenfield’s suggests: “an even greater and possibly inescapable economic and social disaster is rapidly approaching.” Russian’s economy at present is 16th in the world, compared with that of the Soviet in its day was 2nd and in proportion to Russia’s size it should be much higher in ranking. The economy of Russia is also now equivalent to that of Mexico. As the rate of reform to improve the economy has turned out to be so slow, it is predicted that it will take until 2025 for Russia to reach the size of Great Britain’s economy.

Russia also has the additional problem of being in the process of democratisation, while being in the process of economic reform.

Russia’s declining production of crude oil, a key export, contributed to the slow growth in exports, this was an impediment to the reform, because one of the ideas to reform was to boost exports, to increase GDP. The reduction in crude oil had such an effect because Russia relies heavily on its raw material production for the majority of its exports. Raw materials, especially oil, natural gas, metals, and minerals, have dominated Russia's exports, it is suggested that these raw materials account for “65 percent of total exports in 1993” . And “in 1995 ten commodities, all of which are raw materials, accounted for 70 percent of Russian exports.”

Some topics in this essay:
Russia’s Economy, Soviet Union, Stephen Shenfield’s, Russia Ruble, Economic Relations, Seven Russia, Investment Russia, , foreign investment, raw materials, reform russia, russian economy, Organization OECD, crude oil, economic reform, World Bank, economic reform russia, russia’s economy, life expectancy, black market, foreign debt, investors privatisation process, foreign investment russia, size russian economy, foreign investors privatisation,