Russia's to Democratize its Economy Foiled by Crises

Since the collapse of Soviet Union, Russia has evolved with many changes- from centrally dictated economy, to market based and internationally oriented economy. It privatized energy and defense oriented industries in 1990.

Since 1998, its economy grew an average of 7% that caused doubling of per capita income and emergence of a middle class. It revived its agriculture, transforming it into grain exporter from grain importer.

In 2007, it embarked to free it from too much dependence on commodity exports, to avoid its volatile price swings, by developing its technology sector. However, this effort produced little result. In 2008 global crises, it was hardest it, because its primary export oil plummeted in price and demand. Russian banks funds dried up, and Russian Central Bank used 35% of its US$ 600 billion international reserves. Russia in 2009, became the largest exporter of gas and oil, and the third largest exporter of steel and aluminum.

There are signs that its economy bottomed out in mid 2009, with the second half showing positive economic signs. However, President Putin said that it would take 3 years more of its economy to recover at pre- crises level in 2008.

GDP (purchasing power parity):

•· $2.103 trillion (2009 est.) -8.5% (2009 est.)

•· $2.298 trillion (2008 est.) 5.6% (2008 est.)

•· $2.176 trillion (2007 est.) 8.1% (2007 est.)

In 2009, it is the sixth largest world economy. Russia has always positive economic rate growth, except in 2009, when it has a negative 8.5 negative rate growth- which is one of the highest among major economies.

Excessive red tapes, corruptions, poor enforcement of laws, obsolete infrastructures, selective taxation- these are the factors that prevent trust of investors.