Best Business & Economics in Russian in 2022


Business & Economics in Russian

Taking a course in Business & Economy in Russia will give you a broad overview of the Russian economy. The economy is based on Communist models, with state-controlled firms dominating the oil and gas industry, financial sector, and telecommunications market. Investing in Russia requires some caution, as the country does not have legal protections comparable to those found in the West. While the country is currently working to establish a Uniform Commercial Code, it is important to be cautious of those with whom you do business.

Russia's economy is based upon Communist models of efficiency

The Communist model of economy has failed to create any real economic progress. The resulting state-run companies have weak managerial incentives and consume more resources than they produce. Furthermore, property rights were under threat, and firms were stripped of their assets and profits. The remaining shares were eventually purchased by Russian citizens using vouchers issued by the government. In the 1990s, Russia and China both privatised their SOEs, but the effects of these moves were not immediate.

Inefficient government processes have also weakened democratic institutions, including the judiciary and parliament. As a result, no law can be passed without the approval of the Kremlin. Inefficient administration has also made it easy for citizens to take advantage of the gaps in state institutions. President Dmitry Medvedev has described this situation as "legal nihilism." Russia's constitution defines it as a federal state. Formerly, regional governors were appointed by the president, but in 2012, direct elections were introduced. While regional administrations have a significant influence over the process, the Kreml is in charge of the country's government.

The political transformation of Russia under President Putin has been characterized by authoritarian tendencies. Although initial economic policy was based on liberal ideas, it gradually moved towards state control over key economic sectors during the second term. The Russian economy has grown at a robust rate of 6.9% per year until 2008, when the economic crisis hit. Unfortunately, the rapid growth has been slowed by widespread corruption, an extensive shadow economy, and a distorted judiciary.

Russia's financial sector is dominated by state-controlled banks

As of October 2018, Russia's banking industry comprises 499 banks. The banking sector is highly consolidated, with state-owned banks accounting for more than five-fifths of the sector's assets. Of these, four large state-owned banks control more than half of the industry's total assets. In addition, state-owned banks are able to provide more financing than private banks, with the largest, Alfa Bank, generating close to a third of the entire banking market.

The proportion of state-owned banks in GDP is much higher than the average in the West, with the state contributing almost a third of GDP in 2016. However, this is less than the mainstream narrative suggests. In Russia, the state accounts for close to 50% of formal sector employment and value added. Because SOEs are present in virtually every sector, this figure will likely be lower than that in other countries.

While state-owned banks dominate the financial market, foreign investors are able to borrow on the Russian market. This is possible due to interest rate differentials, which tend to prompt investors from developed economies to borrow on domestic markets. By contrast, Russian companies can obtain credit at foreign exchange rates. But this is only the beginning. Foreign investors should be aware of their options before investing in Russia. So, it is imperative to do your research and compare different investments before deciding on the one that best suits your goals and preferences.

Russia's oil and gas industry is dominated by state-controlled firms

While the state controls about 60% of oil and gas reserves in Russia, the other 40% is privately owned. These firms have understood Putin's message and are more willing to take the oil and gas benefits that he offers. As a result, Russia is able to control a vast amount of energy resources without worrying about competing with other nations. It also controls most of the pipelines that transport its products.

Russia's 'petro-power' is evident in the region. While the larger economy makes Russia a powerful player in the overall trade of the region, it is still a clear threat to states that import Russian oil. And as oil and gas are valuable and rare, they are difficult to substitute. Russia has tried to take advantage of this by using its influence to reward its allies and punish its enemies.

Under Yeltsin's leadership, the oil and gas industry was mostly controlled by state-controlled firms. As a result, leading oligarchs had a large role in foreign policy and gained power and influence. The Kremlin authority fragmented and there was no clear procedure for making decisions. This led to a collapse in the oil price, which further weakened the economy.

Russia's telecommunications market is dominated by state-controlled firms

Since the early 2000s, the telecommunications market in Russia has been dominated by state-controlled firms. As part of the restructuring process, regional telecom businesses were linked up with Moscow-based firms, creating a massive single operator. As competition for market share grew, many players in the local telecommunications market began to exit, selling off their enterprises. While these monopolies tended to be inefficient, they still contributed to the growth of the Russian mobile market.

The high concentration of state-controlled firms in Russia's telecommunications market is consistent with the industrial policy adopted during the twentieth century. This structure still permeates many views of the economics of this sector. Many analysts view this level of concentration as a natural evolution of the market. However, some have called for greater competition, which may have been counterproductive for innovation.

A similar evolution in the oil industry suggests that the concentration of power in the oil industry is disproportionate to the country's economy. Instead of allowing a more balanced market, this has resulted in a reincarnation of the former Soviet monopoly. In fact, the analysis of the evolution of the Russian oil industry reveals that there is little evidence of a market-driven process. Moreover, the Russian case shows that the elite's ability to implement rules in a competitive manner is very weak.

Russia's natural resources

A new monograph on Russia's natural resources and economics offers an excellent overview of the country's resources. The book is based on systemized data on 57 different kinds of minerals and ten major biological groups. It also includes information on the distribution of mineral resources and specific stocks of humus. In addition, it details estimations of 21 types of metals (including oil, gas, and coal) and other resources used for industry. The monograph also includes information on the biosphere and the hydro and atomic power industries.

The country's vast reserves of natural resources make it a major exporter of energy and other raw materials. Its vast deposits of coal make it a significant source of energy and are believed to contain around 20 percent of the world's coal. Its southern fields along the Trans-Siberian Railroad provide the bulk of the country's coal output. Siberia produces three-fourths of the country's coal, while the Kansk-Achinsk basin accounts for the remaining two-fifths of the country's coal production.

Most of Russia's minerals are found in the Urals and Siberia, including gold. Historically, 20 percent of the world's gold and 30 percent of its iron were found in Siberia. However, many of these precious metals are found in far northern regions of the country. This has led to the creation of isolated industrial cities near the mines. Mining workers often live in barracks and are then flown back to cities in helicopters.

Russia's economy depends heavily on exports of oil and gas

Oil and gas represent a substantial part of the Russian economy. According to World Bank statistics, about 75 percent of the country's export revenue comes from the export of these two products. However, there is no hard and fast rule as to whether oil and gas exports are beneficial for Russia's economy. The country's official customs data includes coal and electricity as well. In addition, the country imports goods from many countries, including the United States, Germany and Ukraine.

Russia is one of the world's leading producers of oil and gas, with a total production of 10.5 million barrels of crude per day in 2021, or about 14 percent of the world's total supply. While Russia has fields located throughout the country, the majority are located in the eastern and western Siberia regions. The country exported 4.7 million barrels per day in 2021, and the majority of this output went to China. The country also exports a significant volume to European buyers.

However, the Russian gas and oil flows to Europe have begun to rise earlier this spring, reflecting Europe's willingness to tolerate disruptions in the supply of these commodities. European countries have begun to diversify their customer base and diversify their supply of energy in anticipation of next winter. This diversification has not escaped Kremlin planners. The demand for Russian gas will increase if the EU opens new pipelines to Asia.


Andrea Lopez

International student since the age of fifteen. Varied cultural awareness and broad perspective of the academic world through several experiences abroad: Spain, Ireland, the UK, Guatemala, and Japan. Organised, highly adaptable, impeccable customer service skills and excellent rapport building abilities.

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