This article emphasizes Russia’s need to create a better business climate in order to grow its economy and to bolster its credit ranking. Currently Russia ranks the 120th easiest country to do business in according to the World Bank. Furthermore, Russia is the world’s largest exporter of energy, a resource that is falling in demand. Recently, President Putin has proclaimed that he intends to reduce Russia’s reliance on its oil and gas revenue and boost investment to 25% of the gross domestic product by 2015. Additionally, he intends to improve the countries ranking ease of doing business ranking to 20th. A paradox to this ambitious goal is that it requires a reducing state interference in private enterprises, while government spending and regulations have typically been a source of providing votes. Most economists advocate that it is imperative for Russia to move away from its reliance on natural resources because a further drop in the price of oil would drop Russia’s credit ranking and have a significant impact on its economy.
The impact of further decline in the price of oil may potentially have a catastrophic impact on Russia as well as many nations that are heavily reliant on oil. How catastrophic the impact will be depends on the foresight of leaders and their ability to take preventive steps to protect their people and economy. Russia’s current economic stability is almost entirely a product of high oil prices around the world. Putin was able to utilize “petro dollars” to bring some sense of order to the nation and provide much-needed public service. The president was also able to seize an almost authoritarian power through this stability. His general rhetoric seemed to be I have provided prosperity and thus I will hold the power. This sentiment has begun to stir up some resentment and public protests throughout the nation as was evidenced during the past election. The popularity rating of Putin’s United Russia party has continued to slide. Valdimir Milov, an opposition leader, has suggested the party in in need of a “physiological rehabilitation” for it to continue to thrive. While there may be sentiment against Putin, his greatest advantage is that that no single candidate that can legitimately challenge his power.
Putin takes much of the praise for Russia’s economic revitalization post Yelstin, but increased criticism will ensue if he cannot figure out a way to reduce reliance on oil. The occasional public protests that we see today will potentially turn into hordes of angry mobs if the economic situation worsens. There are signs that Russia is making small steps towards improving its fiscal outlook buy minimal reductions in its budget. However, just as in any democracy, leaders focus on short term benefits that will help them to be reelected. Today’s Russia is a radical transformation from fifteen years ago but it is time for a second transformation if the nation intends to be a competitive global player.
Sandy Shore http://www.usnews.com/news/business/articles/2012/10/19/oil-prices-flat-ahead-of-eu-summit-conclusion
Anna Kasyan http://www.forbes.ru/sobytiya/175100-vybory-na-kotorye-ne-puskayut-hakery-kak-oppozitsiya-vybiraet-liderov