Russia: Economic and Political Outline

Economic Overview

Russia was hit hard by the international financial crisis and in 2009 reached a record recession since the fall of the Soviet block (-7.9%). The recovery in 2010-2011 was strong (4.3% growth according to estimates), driven by fuel exports and domestic demand stimulated by the increase in salaries. The unfavorable international context caused by the eurozone crisis and the political uncertainty in Russia should have an effect on both investors nad consumers and slow down growth in 2012 (3.3%).

Russia benefits from steady economic growth, nonexistent budget deficit and a government debt nearing zero. However, because of its dependence on hydrocarbons, the Russian economy remains vulnerable to external shocks and will be affected by the instability of financial markets and the recession in the eurozone. Before the 2012 election a number of popular measures have been taken, such as rising wages, pensions and social benefits. The fight against inflation and capital flight remains the government's priority, as well as economic diversification and support for the agricultural sector. In the longer term, the problem of demographic decline will become pressing.

The unemployment rate, which risen as an effect of the 2008/9 crisis, has now decreased to near pre-crisis levels (6.3% in January 2012). Social inequalities are still marked, particularly between big cities and rural areas. Despite the appearance in towns of a middle class, the poverty rate is still at 16%.

Main Sectors of Industry

Russia has a wealth of natural resources. It is the leading producer of natural gas and the second producer of oil in the world, as well as being one of the main producers and exporters of diamonds, nickel and platinum.
Despite its large surface area, Russia has a relatively small amount of arable land because of unfavorable climatic conditions. The country nevertheless owns 10% of the global agricultural lands. The northern regions of the country concentrate mainly on livestock and the southern regions as well as western Siberia produce cereals.
Industry represents more than a third of Russia's GDP and employs up to 30% of the population. The country inherited most of the Soviet Union's industrial bases. The most well developed sectors are chemicals, metallurgy, mechanical construction and defense sectors.
The service sector employs more than 60% of the population and generates slightly under 60% of the GDP. After the 1998 financial crises, the banking sector has not yet undergone a complete restructuring. Given the size of the country, the transport, communications and also trade sectors are particularly significant.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

50.5/100

Position:

Mostly unfree

World Rank:

139/179

Regional Rank:

40/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Gouvernement Russe
Ministère de l'Agriculture
Ministère du Développement économique et du Commerce
Ministère des Affaires étrangères
Ministère des Finances

Statistical Office

Goskomstat

Central Bank

Russian Central Bank

Stock Exchange

Russian Trading System
Moscow Interbank Currency Exchange

Other Useful Resources

Douma
Council of the Federation

Main Online Newspapers

St Petersburg Times
The Moscow Times
Kommersant
Expert (in Russian)
RIA-Novosti (in French)

Political Outline

Type of State

Federal republic based on parliamentary democracy. Presidential government.

Executive Power

The President is the Head of State. He is elected by universal suffrage for four years.The real center of power in the country, he is the commander-in-chief of the army. The Prime Minister is the head of the government. He is appointed by the President, with the approval of the lower house of Parliament, and manages the everyday business of the country.

Legislative Power

Russia has a two-chamber legislative power. The Parliament, called the Federal Assembly, is composed of: the Council of the Federation (upper chamber), which has 78 seats and the members are appointed by the regional governors and legislative institutions, for a four-year term of office; and the State Douma (lower chamber), which has 450 seats; its members are elected by direct universal suffrage from partisan lists, for a four-year term.

Main Political Parties

Russia is a State with one dominant party - United Russia (a centrist party) which is in power. Opposition parties are authorized but they do not really have any chance of gaining power. The other important parties in the country are:
- The CPRF (Communist Party of the Russian Federation) – a nationalist and communist party;
A Just Russia (born of the merger between Rodina, the Russian Life party and the Russian Pensioners' party in 2006) - a center-left party, an ally of United Russia;
The LDPR (Liberal Democratic Party of Russia) - an extreme right nationalist political party;
- The SPS (Union of right-wing forces) - associated with reforms leading towards the free market economy and privatization, it supports western-style capitalism.

Current Political Leaders

President: Dmitri MEDVEDEV (elected on May 2008) – Independent
Prime Minister: Vladimir PUTIN (since May 2008) – Last president. United Russia Party President.

Next Election Dates

Presidential election: March 2018

Indicator of Freedom of the Press

World Rank:

142/179

Evolution:

2 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).