The Russian Crisis (original) (raw)

The Russian Crisis: Perils and Prospects of Post-Soviet Transition

1999

Since 1992, the rhetoric of Russian economic reformers has been one of full-speed ahead to a freemarket economy. The reality, however, has diverged significantly from this rhetoric at both a broad "rules of the game" level and specific "policy within rules" level. The resulting ambiguity of the economic environment and the lingering effects of the previous system which is supposed to be reformed has led to a continued deterioration of the Russian economy. This paper offers a modified defense of "shock therapy" as a path to a cure for Russia's economic malaise, as opposed to the cure itself.

The Russian economy and the current crisis

European View, 2009

The article describes the measures taken by government officials to aid Russia's economy in emerging from the depths of the financial crisis. The authors describe the complexity of this task by focussing on how objective policy-making is complicated by the personal interests of Russian political and business leaders. The political considerations involved in Russian recapitalisation schemes serves as the main political focus in the creation of a desirable recovery strategy. Elements crucial to the recovery of the Russian economy are discussed, including government efforts to support medium and small business, and the unique Russian strategy of dealing with system-forming enterprises.

Russian Economic Reform in 1992: The Threat to Stabilization

Business Strategy Review, 1993

ABSTRACT By the end of 1992, Russia stood at the brink of hyperinflation. This article identifies the main cause as an uncontrolled increase in the money supply related to the budget deficit, and central bank credits to enterprises, and to the rouble zone. These create a vicious inflationary cycle, which will be difficult to break since the political forces representing old Soviet economic structures have undermined stabilization policies. The article concludes that though macro-economic stabilization is not a sufficient condition for the market-oriented transformation of the Russian economy, it remains a necessary one, without which the reform will fail.

Market Reforms in Russia - Problems and Prospects

SSRN Electronic Journal, 2000

The author analyses the economic reforms that have been implemented in Russia since 1991. In his opinion initial attempts to introduce market reforms by applying the shock therapy and forced-pace privatisation of state-owned enterprises caused high political and social costs to the Russia's fragile democracy. Therefore the radical reform policy was temporarily suspended, while the transition to a market economy was proceeded inconsistently and often unevenly. After the acute financial crisis took place in August 1998 the reform policy has been given new impetus. In the last few years substantial progress has been made in the process of privatisation, implementation of reforms in the financial sphere, energy sector, in the approach to the agriculture, in the employment policy, in making changes of the tax and pension systems. All these changes contributed to attaining the sustainable economic growth. The author concludes that for the persisting crisis in a number of areas, the future of the Russian market reforms still remains largely uncertain. Today's Russia between 1922 and 1991 was the largest and most populous constituent republic of the Soviet Union. It declared its sovereignty on 12 June 1990 and on 8 December 1991 became a founding member of the Commonwealth of Independent States (CIS). In the United Nations, Russia took the seat of the USSR on 24 December 1991, and with the latter's dissolution the next day turned into a full-fledged sovereign state. In April 1992, it joined the European Bank for Reconstruction and Development (EBRD), in June the International Monetary Fund (IMF) and the World Bank (IBRD), and in November 1998 the Asia-Pacific Economic Cooperation (APEC). From July 1991 to December 1999, Russia's president was Boris Yeltsin, whose wide-ranging authority was further enhanced by the constitution adopted in December 1993. 2 The contradictory character of market reforms in the nineties can be attributed not to a little extent to the emergence of the so-called 'family', i.e. the elite around Yeltsin, and to the struggle for the redistribution of power and wealth. Yeltsin's heir, Vladimir Putin, who took over the presidency on 31 December 1999, has recently been trying to achieve change increasingly relying on his secret service, military and business associates in the formation of his political course vis-à-vis the 'family'. However, the situation is complicated by the fact that in the Russian Federation the government must, in the course of centralisation, consider the interests of regional elites, too. The present article is to analyse the economic processes of the past decade with the objective of giving a more or less comprehensive picture about the principal directions of market reforms, the situation in Russia's economy and the challenges it is now facing.

The Economic Crisis in Russia: Fragility and Robustness of Globalisation

2009

It is now clear that the global economic crisis has hit the Russian economy. The resulting shock clearly shows not only the global economic imbalance but also the distinct characteristics of emerging Russian markets. The Russian economy already changed its structure under the high economic growth of the early to mid-2000s, and has since then become too sensitive to the global market and the oil price. However, the Russian markets involve the strong hand of the government, and the anti-crisis policy gives this hand constancy. The crisis process and the anti-crisis measures characterize the Russian market institutions. The current paper investigates the characteristics of the Russian markets under both the economic growth period and the crisis period, and offers perspective on the market transition.

Domesticating Russia's Economic Crisis

International Economic Bulletin, 2009

In a recent conference in Moscow, participants were asked to suggest policies that could get Russia out of its economic crisis. None of them, economists included, said much about the economy. The focus, rather, was on politics; Russia, they said, needs better institutions, freer courts and media, an empowered parliament with fair elections, and so on.

Fifteen Years of Economic Reform in Russia

OECD Economics Department Working Papers, 2005

Fifteen years of economic reform in Russia: what has been achieved? What remains to be done? The paper provides an overview of the course of economic reform and the performance of the Russian economy since the early 1990s and an analysis of the structural reform challenges ahead. It assesses the contribution of institutional and structural reforms to economic performance over the period, before turning to the question of where further structural reforms could make the biggest contribution to improved performance. Three major conclusions emerge. First, there is still a great deal to be done to strengthen the basic institutions of the market economy. While the Russian authorities have embarked on some impressive-and often technically complex-'second-generation' reforms, many 'first-generation' reforms have yet to be completed. Secondly, the central challenges of Russia's second decade of reform are primarily concerned with reforming state institutions. Thirdly, the pursuit of reforms across a broad front could enable Russia to profit from complementarities that exist among various strands of reform.

The decline of the Russian economy. Effects of the non-reform agenda.

The objective of the article is to analyze the economic effects for Russia of pursuing political goals instead of reviving the economy and carrying out necessary reforms. The “non-reform agenda” since the mid-2000s means that for many years, the economy has been sliding due to structural problems and weak institutions. These tendencies were reinforced with the re-election of President Vladimir Putin for a third term in 2012 and his economic agenda. Since 2014 the additional problems of geopolitical tension, low oil prices and economic sanctions have resulted in the economy contracting. Despite the depressed economy the leadership keeps military expenditure at a high level. Import substitution as a means to mitigate the economic crisis is not convincing. Key words: Russia, economic decline, political versus economic goals, institutions, rent addiction, rent management, sanctions, import substitution.

Russia: Reform after the great recession

Russia has weathered the global crisis better than initially feared, in part due to its large anti-crisis package of measures. Russia is now likely to witness a robust but relatively jobless recovery from the Great Recession. But the crisis has brought to the fore the longstanding need to accelerate reforms to modernize public sector, strengthen financial sector, improve the investment climate, and advance diversification.