Past, Present and Future
Edited by D. S.P. Rao and Bart van Ark
Chapter 5: Analysis of Russian Performance since 1990 and Future Outlook
This chapter reviews the anatomy of Russia’s economic performance 1991– 2005 decomposing GDP statistical data into principal utilization components. It accounts for the long depression of 1991–1998 and the subsequent economic expansion of 1999–2005. Dependency on fuel and metals exports is traced to the practical disappearance of government defence expenditure and sharp decline in capital investment. The deceleration inertia in the economy is explained by the persistent narrowness of the domestic market caused by the combination of low wages and the skewed distribution of gross profit. The average annual growth rate is decomposed into principal production factors. This analysis is used as a basis for determining future growth for 2004–2015 and subsequently for 2016–2030. Projected growth in Russia’s GDP is compared with projected data for 14 other nations and world GDP. In this projection Russia moves from its current tenth place in the world to fifth place in 2030 after China, USA, India, and Japan. 2.2 PERFORMANCE IN 1991–2005 From the standpoint of Russian economic dynamics, two periods may be clearly distinguished: (i) the overall decline of production in 1992–1998, with a short pause in the stagnation year of 1997; and (ii) the overall growth of production, starting in 1999.
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