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
6) Aslund, Anders. How Russia Became a Market Economy. R.R. Donnelley and Sons Co. Harrisonburg, Virginia. 1995. Russia must figure a way to draw in corporations from the rest of the world. This would greatly assist the economy and increase the gross domestic product by large quantities. The big concern for foreign investors entering this market is, amongst other things, the "Russian Mafia." Threats to the security of the investment whether it is a joint venture or a wholly owned subsidiary can come from outside the business, but also from within. Though there is absolutely a Mafia influence with Russian business there are also hundreds of multi-national corporations that successfully do business there. Issues of security and too much reliance on partners are the bases of the Mafia issues in Russia (Shaw, 1999). 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. 5) Russian and Eurasian Program. March 12, 2000. www.csis.org/ruseara/rus_econ.html all goods instantly creating a free market in which the people could learn capitalism first hand. The IMF study also addressed the problem of Russia's deficit, suggesting cuts in price subsidies and low-priority expenditures, such as administration. The Russian government set a target deficit of two and one half to three percent of the gross domestic product. This level has not yet been met but progress is being made (LoBue, 1997). If economic growth is to be maintained the efficiency of the economy, as a whole, must be improved thr
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Approximate Word count = 1170
Approximate Pages = 5 (250 words per page double spaced)
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