Pop russia adios

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  • Publicado : 3 de noviembre de 2010
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The overall state of your economy
The city of Moscow is without doubt the political, economic and financial centre of Russia. There are numerous investment opportunities available in Russia’s regions outside of Moscow. However, finding attractive investment locations in a country as large and diverse as Russia is a challenge. The economic crisis that affected all post-Soviet countries in1990 was worse than the Great Depression in the countries of Western Europe and the United States in the 1930s. With the turn of the century, rising oil prices, increased foreign investment, higher domestic consumption and improved political stability reinforced Russia's economic growth. Russian economic growth and investment accelerated notably in early 2007. Because we know that the periodduring 1999 to 2007 was characterized by strong growth in most economic sectors for Russia. The growth is mainly due to non-tradable services and goods for the domestic market. During 2008 the growth has been quite positive. But that change when the second wave of the global financial crisis affected the Russian banking. Currently, the crisis affects the banking system but its effects are not as severeas before, so it can not affect the economy so much like in others. Russia has not achieved stable economic growth, which is related to the lack of development of domestic demand. Russia's economy will begin to grow in 2010, although there is no reason to calm down because even their government is sure about the growing, the economic crisis has not gone.

The government has learned to bewarned of the economic crisis because during 2009 their perspectives got worst day by day; the impact of the crisis added to the serious structural weaknesses in the economy of Russia, which were not only addressed and corrected. The reasons of one economic problem in the Republic of Russia was during 2009, as we wrote before, and the real reasons that lead Russia to this kind of situation werehigh dependence on commodity exports, especially oil; the production of raw materials accounts for over 60% of industrial production, that mean that it is very important for the Russian economy because is more than the half of what they obtain. Another reason was low competitiveness of industrial sectors oriented to domestic market because the appreciation of the currency in real terms hasdeteriorated significantly compared to imported products. Another motive was the absence of an efficient financial system, capable of transforming savings into investment because capital investment was well below the real needs of industry. Also the uncontrolled inflation, meaning it was threatening the increase in incomes; Private enterprise was limited, poor protection of property rights and stiflingbureaucracy and corruption levels.

The crisis can be overcome in a long-term sustainable growth will only be possible if there are structural reforms necessary to achieve a diversified economy. Large investments needed to address obsolescence and poor state of infrastructure if we are considering the size of the country of Russia; also we need the volume of investment needed to carry out themodernization and renovation. We should put effort in areas like agriculture, livestock, fishing, mining, manufacture, construction, communications and trade. But if we need to put effort on these we should consider the increase of price as one of the major macroeconomic imbalances, and its direct impact on the population, is also one of the main potential sources of instability.

Anotherproblem is also that the forest industry has decreased since 1990; the only industry that can help to the economy in Russia is the pulp and paper industry. Russia is the second largest producer of oil, so it is very important the export and import of oil. So Russia should be interest in the trade for its consumer goods and agri-food and machinery and equipment for the food industry, textile and...
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