Russian Economy
The transformation of Russia into a market economy has been damaged by controversy in both Russia and the West. Things took a drastic turn with the events that happened in the Soviet Union on August 19-21, 1991. These three days ended the era of communism in the USSR. Three big transitions were made simultaneously in those three days, the emergence of Russia as a free state, the building of democracy, and the transition to a market economy. For seventy years its communist government sheltered the economy of Russia, but with the dissolution of the Soviet Union the economy was left without the guidance for which it relied so heavily. Control of the economy was thrust into the inexperienced hands of the general population, who had lived for three generations under a system in which they had no need to make decisions about business (Aslund, 1995). In July 1990, leaders of the Group of Seven industrial nations and the president of the European Community asked the International Monetary Fund (IMF) and other United Nations economic agencies to study the Russian economy and propose a more effective method of reform for their economy. The committee strongly suggested that the Russians immediately release price controls on almost
1) Liv*censored*s, Alexander. "The Russian Economy: Problems and Prospects" A Seminar with Minister Alexander Liv*censored*s. The Nixon Center, Washington, DC. December 1, 1999. www.nixoncenter.org ------------------------------------------------------------------------ 3) Shaw, Britt. "Crime and Corruption in the Russian Economy." 1999. The August 1998 ruble devaluation, higher oil prices, effective government policy, and economy's low base has increased the demand for domestically produced goods which accounted for about seventy percent of the improvement of the economy. High oil prices on international markets accounted for most of the remainder. Russian government sees stimulating investments as its primary goal. Efforts to promote investment will be aided to the new relatively political stability and the fact that Russia has become increasingly self-sufficient economically (Russian and Eurasian Program, 2000). If economic growth is to be maintained the efficiency of the economy, as a whole, must be improved through the expansion of investment, and structural change in industry and regional economies. In order for this to happen corporate activity must be conducted related to the principles of a market economy, and capital and labor must be used more efficiently. Key policy directions that should be taken are the elimination of the systems and practices that permit inefficient economy activity in the past, the creation of an economic environment, and the introduction of structures that increase the incentives for rational economic activity (Hoshino Committee on Economic Reform in Russia, 1996).
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Approximate Word count = 1170
Approximate Pages = 5 (250 words per page double spaced)
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