Business and World Economy – Russia

Russia is a big industrialized country occupying the area of 17098 square kilometers with the total population of 143,207 million people as for 2012.
The export of raw materials makes the biggest part of Russian revenue budget, which can be explained by the fact that a considerable amount of natural resources is located on its vast territory. Russia possesses 11% of oil, 30% of natural gas, 10% of coal mining, 14% of iron ore mining, and 10-15% of nonferrous metals and rare metal mining production.
In addition to mining and extractive industries, the following manufactures are also represented in Russia: all forms of machine building, including aircrafts and space vehicles, radar and missile production, shipbuilding (defense industry), road and rail transportation building, agricultural machinery, tractors and construction equipment, medical and scientific instruments, textiles, foodstuffs, etc.
One of the problems Russia is facing now is a strong dependency on export of raw materials that makes the country’s economy very sensitive to changes in prices for these products.
In order to decrease the level of commodity exports reliance, Russia has to try and focus on diversifying its economy. In other words, Russian revenues budget has to be able to rely on other sources of income except for the raw materials.
As a result, five directions of innovative development were approved by Dmitry Medvedev in 2009 and published in the article Forward Russia. They are energy and power saving, including development of new kinds of fuels, nuclear technologies, space technologies; medical technologies, and strategic informational technologies. One of the latest examples of innovation development is the foundation of the Skolkovo Centre in the Moscow region. Although some press reports mentioning the Skolkovo Centre and theft of 24 million Rubles (USD 746000.00) appeared in the past, the authorities agreed to invest 2.8 billion Euros during the next seven years into the project.
The authorities understand the need to adopt the innovation approach in every industry, using the technologies and experience of the partner countries.
At the same time, in order to find a way out of the problematic situation and attract foreign investment, the government has to work on improving the business climate for all the parties in general. The task could be done through the elimination of corruption, enforcement of the rule of law, liberalization of the trade and investment regimes, etc.
Russia exports natural gas, petroleum and its products, metals, wood and its products, chemicals, and many other civilian and military commodities. According to the information as of 2012, Russian main export partners were the Netherlands (14.4%), China (6.4%), Italy (5.3%), and Germany (4.5%).
The goods that Russia imports are vehicles, pharmaceutical products, plastic, machinery, semi-finished metal products, meat, fruits and nuts, optical and medical instruments, iron, and steel. The largest import partners in 2012 were China (15,5%), Germany (9.5%) and Ukraine (5.5%).
GDP growth from USD 76016.00 in 2005 to USD 1 857 770.00 in 2011 proves a stable increase of production inside the country. Russia holds seventh place in the world by this indicator and seventy-seventh by GDP per capita. It is believed that GDP per capita identifies the level of a country’s living standard. Although this marker does have a tendency for growth (from USD 5160.00 to USD 12586.00 in 2011), it is still far behind the value of GDP per capita of such countries as the USA, Canada, Australia, Germany, etc.
In general, the potential of Russia is enormous. However, it needs a clever and flexible management system that will be able to cope with the problems it meets on the way to further development.
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