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Economy of Russia at nowadays

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Economy of Russia at nowadays.

The economy of Russia at nowadays is an economy organized on market capitalist principles, within which private, state-owned and mixed enterprises of various organizational and legal forms operate. Among this are dominated by enterprises with national, but there are also with foreign capital. At the end of 1991, the government set a course for radical economic transformation and the most rapid transition to a market economy. As a result of large-scale privatization in Russia, by 1995, a small layer of owners had formed, which owns the overwhelming majority of enterprises. At the beginning of 2006, the share of private capital accounted for 77% of all fixed assets and only 23% remained in the hands of the state. The process of privatization of property in the country continues. The formation of a market economy in Russia took place in two stages. The first stage (1990–1998) was characterized by:

– chaotic retreat of the state from previously occupied positions in the economy;
– the rapid rise in prices;
– a significant decline in production and investment;
– lack of contractual discipline among enterprises;
– rapid build-up of the state’s foreign and domestic debt;
– the accumulation of payables;
– annual budget deficit.

Errors in economic policy in the 90s were partly due to the lack of international experience of such large-scale transformations. The situation was aggravated by the incompetence of economic managers, the inability of most of them to work effectively in market conditions. The entrepreneurial initiative of citizens was hampered by the corruption of the bureaucracy at all levels of government that was poorly controlled by the supervisory authorities. These circumstances led the Russian economy to a severe crisis (August 1998), as a result of which government securities were no longer serviced, there was a significant devaluation of the ruble and the standard of living of the population decreased even more. The way out of the crisis at the end of 1998 was marked by the onset of the second stage (1999–2001) of the transition period. The increase in the competitiveness of domestic products at a price due to the devaluation of the ruble, and the rise in world prices for hydrocarbons almost coincided in time, which contributed to overcoming the downward trend in the Russian economy. The sustainability of this process was ensured by the consistent and tight fiscal policy of the Government of the Russian Federation, which provides for a surplus of the federal budget, as well as by accumulation by domestic entrepreneurs of the necessary business experience in market conditions.

Economic map of Russia

Economic map of Russia

The principal achievement of the second stage was the rapid growth of real savings of the population on ruble and foreign currency deposits, which are also an important source of investment in the country’s economy. Began the process of returning funds back to Russia. Currently, the process of withdrawing economic activity from the shadow economy, which until 2000, according to some expert estimates, made more than 40% of Russia’s total production of goods and services, is actively underway. Now in the country begins the third stage of economic development, the essence of which consists in the beginning of the transition from a raw material orientation to an innovative, high-tech one. This transition is facilitated by record-high energy prices, in the total exports of which Russia ranks first in the world. The gross domestic product is growing steadily, the export of goods and services exceeds their import. In the production of certain types of industrial products, Russia restored the level previously reached in 1990 or began to approach it. As a result, Russia has practically paid off its previously accumulated foreign debts and accumulated significant financial reserves. However, this process is accompanied by a high level of inflation (more than 10% per year), which inhibits the growth of the population’s standard of living.

Structural transformations economy of Russia at nowadays are accompanied by the formation of economic legislation that meets modern world standards. The country has adopted key laws and codes for a market economy: Civil, Tax, Labor, Land, Customs, Town Planning, Water, Forest, Air, Laws on the Government, Central Bank, Banks and Banking, the basics of insurance, securities market, non-state pension funds, joint-stock companies, limited liability companies, insolvency (bankruptcy), licensing of audit activities, foreign investments, subsoil, state registration of legal . Their faces, etc. Fundamentals of economic structure of the country are defined by the Constitution, implying, in particular:

– the unity of the economic and legal space in the country;
– equal rights for various forms of ownership;
– inviolability of private property and property of citizens;
– guarantee of the right to business and other economic activities not prohibited by law;
– the obligation to pay taxes and other key economic standards economy of Russia at nowadays.

The growth rates of the Russian economy in 1999–2005, the emergence of a powerful private sector, the attainment of certain qualitative macroeconomic characteristics, the creation of a legislative infrastructure of a market economy, allow to conclude that the transition period from a planned, socialist to a market capitalist economy is over. The formal confirmation of this fact was the recognition by the European Union (in 2002) of the market character of the Russian economy. Today, one of the most important tasks is to ensure the development of entrepreneurship and a system of market relations in the economic sector, whose business entities are small and medium-sized businesses. As practice has shown, in all successful transition economies small and medium-sized businesses served as the main engine of growth, which absorbed the resources of the former public sector and showed noticeable dynamics in the context of competition and tight budget constraints. In the Russian Federation, by 2006, small and medium businesses became a force that plays a significant role not only in the socio-economic, but also in the political life of the country. This situation is due to the fact that small and medium businesses have provided further strengthening of market relations based on democracy and private property. In their economic situation and living conditions, private entrepreneurs are close to a large part of the population and form the basis of the middle class, which is the guarantor of social and political stability.

In 1990, the Russian Federation had a powerful diversified industry. A large share in the volume of industrial production was occupied by the processing industry, producing products with high added value. The sectoral structure of industry more or less corresponded to the tasks that the socialist, planned economy accomplished. Market reforms radically changed the conditions and principles of industry. In the first period, changes in the structure of industry evolved spontaneously, practically without government intervention. They were due to the different dynamics of the development of industries. The largest decline in production occurred in the manufacturing industry. This led to a sharp increase in the raw material orientation of Russian industry and the weighting of the industrial structure. Since 1999, the situation has begun to change slowly. With the growth of industrial production in general, higher growth rates are shown by manufacturing industries. The highest rates are characteristic for the chemical and petrochemical industry, food industry, building materials industry, ferrous and non-ferrous metallurgy. The production in machine building, in the light, microbiological industry is growing much slower. Gradually, the sectoral structure of industry is somewhat improving, but the state of 1990 is still far away. The state is making insufficient efforts to correct the structural misalignment that has taken place, and the structural shifts themselves are largely spontaneous, under the influence of the growth of the domestic economy of Russia at nowadays.

In general, over the past period, changes in the sectoral structure of the industry of economy of Russia at nowadays were negative. The share of industries in the fuel and energy complex and industries, which provide mainly primary processing of raw materials, has increased. The production volumes of a number of high-tech products have sharply decreased. The country has lost some of the advanced technology and highly skilled workers, technicians and engineers. The greatest changes occurred in the number of people employed in the manufacturing industry and agriculture, in which employment fell. The number of personnel in trade, financial activities and a number of other sectors that relate to the service sector has grown. The main part of the growth of gross domestic product in the country in recent years is provided by the industry of intangible production. In industry, gross domestic product production is growing more slowly. The main reason for this is the narrowness of the domestic market due to the insufficient growth of incomes of the population. The second reason is fierce competition in the foreign market, which does not allow for an increase in exports of manufactured goods. Industry placement is a spatial form of production development. Factors of industrial development are a set of conditions that determine the specific location of any production. These include:

– natural conditions and resources that play a certain role in the placement of the extractive industry;
– socio-economic, determining the geography of the population distribution and its territorial concentration;
– technical and economic, determining the costs of production and sale of raw materials, materials and finished products. These include: material consumption, water intensity, energy intensity, labor intensity, high technology, capital intensity, capital intensity, transportation costs, profitability;
– organizational, economic, determining the specifics of production, cooperation and combination of production;
– economic and geographical position;
– features of socio-historical development.

Currently, the ranking of the main factors of production has the following form: fuel and energy factor, fuel and raw materials factor, labor force resources, orientation to the area of ​​consumption of finished products, the possibility of developing cooperation, scientific centers. The peculiarity of the sectoral structure economy of Russia at nowadays is the increased share of production of goods and the low share of production of services. The largest percentage in the gross domestic product is occupied by industry – more than 30%, second place is trade and public catering, followed by transport, agriculture, construction, and communications. In the service sector, the most dynamically developing branches of trade and public catering. Those industries that received special attention in the years of socialism: transport, science and scientific services, and education received the greatest development in Russia. The rest of the service sectors need to be reformed to meet the requirements of the market and Russian specifics.

The importance of transport as an important component of the economic complex of the Russian Federation is determined by its role in the territorial division of social labor: the specialization of regions, their complex development is impossible without a transport system. Transport is a material carrier of connections between regions, branches, enterprises. The transport factor affects the location of production, without taking it into account it is impossible to achieve a rational distribution of productive forces. When placing production takes into account the need for transportation of a mass of raw materials and finished products, their transportability, availability of transport routes, their throughput, etc. Depending on the influence of these components, the placement of enterprises is calculated. Rationalization of transportation affects the production efficiency of both individual enterprises and regions and the country as a whole. Transport is also important in solving social and economic problems. Provision of the territory with a well-developed transport system is one of the important factors in attracting the population and production, as well as an important advantage for locating productive forces. Transport provides employment to 6.3% of the average annual number of all employed in the economy of Russia at nowadays.

The specifics of transport as a sphere of the economy is that it does not itself produce products, but only participates in its creation, providing production and supplying finished products to the consumer with raw materials, materials, equipment. The transport factor is particularly important in our country with its vast territory and the uneven distribution of resources, population and basic production assets. Transport creates the conditions for the formation of a local, regional, national market. In the conditions of transition to market relations, the role of rationalization of transport increases significantly. On the one hand, the efficiency of the enterprise depends on the transport factor, which in the market conditions is directly related to its viability, and on the other hand, the market itself involves the exchange of goods and services, which is impossible without transport, and therefore the market itself is impossible. Therefore, transport is an essential component of market infrastructure. The level of development of the transport system of the Russian Federation has huge differences by region. The availability of communication paths in both the total length and density differs ten or more times. The most developed transport systems are the Central, North-West (except for the north of the European part of Russia), the Southern and Volga federal districts, the least developed are the Far Eastern and Siberian federal districts. Information and communication technologies and services are currently a key factor in all areas of the socio-economic development. They have become critical for improving the efficiency of public administration, ensuring national security, targeted social assistance, and improving education and health care systems. The role of information as an economic resource is growing steadily, and it is the information technology industry that becomes the engine of development of the post-industrial economy of Russia at nowadays.

In order to actively promote our country to the information society, a Strategy for the Development and Use of Information and Communication Technologies in the Russian Federation until 2010 has been developed, identifying key areas, goals and objectives of government regulation in this area. The most promising direction in the development of the information technology sector in the near future may be the development of domestic software. The introduction of information technologies in the socio-economic sphere and business, government measures to stimulate the development of the information technology market, including the implementation of the state program “Creating high-tech technology parks in the Russian Federation”, the start of investment activities of the Russian investment Information and Communication Technology Fund, participating in the implementation of informatization of certain areas of priority national projects and Development of the sector of information technologies and services is promoted by the implementation of the federal target programs “Electronic Russia”, “Development of the national information of economy of Russia at nowadays and communication infrastructure of the Russian Federation”. One of the most important activities of the telecommunications industry is the development of satellite communications, the national orbital constellation of communications and broadcasting satellites, the effective use and protection of the orbital resource of the Russian Federation. The national satellite communications and broadcasting system plays a crucial role in the fulfillment of state tasks for the distribution of radio and television programs throughout Russia and at its foreign embassies and representative offices, as well as the organization of trunk, international and zonal connections in remote and hard-to-reach regions of the country.

In economy of Russia at nowadays, the global navigation satellite system (GLONASS), created in 1993, allows to determine the location and speed of movement of objects almost anywhere in the world (with the exception of the polar regions). In the civil sphere, satellite navigation systems are widely used in geodesy and cartography, aviation, road, sea and river transport, in private security. The development of television and sound broadcasting is characterized by the coverage of the population by the number of radio and television programs. Along with state broadcasting structures, there are more than 2.5 thousand commercial television and radio companies. However, the broadcasting services market is developing unevenly. In more favorable conditions is the urban population. In 1994, the Russian Foundation for the Development of Television was formed and the Russian Academy of Television was organized there, which established the annual “TEFI” award (TeleEFIR), awarded for creative successes in broadcasting. In 2003, the Development Concept of the telecommunications services market in the field of television and radio broadcasting in the Russian Federation for the period up to 2015 was developed, which determines the development prospects, the role of state regulation and the main directions of restructuring communications organizations and the telecommunications services market in the field of television and radio broadcasting. In accordance with the decisions of the top management, a draft Strategy for the socio-economic development of economy of Russia at nowadays for the period up to 2020 has been prepared and a forecast is being developed up to 2030. The goal is to double the gross domestic product by 2020 and enter the top five world economies and this basis to raise the standard of living of the population of the country. The strategy aims to change the direction of development and the structure of the national economy and move to an innovative path of development economy of Russia at nowadays.

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