The Russian economy. Will Russia ever catch up?

The Russian economy is reeling from the impact of lower oil prices and economic sanctions. However, many of the problems go back much further, to Soviet and even Tsarist times:

+ an unhealthy dependence on the country's bountiful natural resources;
+ continuing state control of companies in many economic sectors;
+ barriers to domestic and international competition;
+ red tape and endemic corruption;
+ a lack of innovative activity.

Economic reforms undertaken by the government have brought measurable improvements in only a few areas. Higher oil prices and the easing of economic sanctions could help Russia to recover from its current difficulties.

In the longer term though, the country will have to address its structural problems in order to achieve stable growth and build a modern economy.

Written by Martin Russell.

European Parliament: Directorate-General for Internal Policies of the Union: Publications available via the EU Bookshop http://bookshop.europa.eu/en/directorate-general-for-internal-policies-of-the-union-cbf.cKABstF7wAAAEjwYYY4e5K/

Blog: EP: EPRS, 16.03.15: The Russian economy: Will Russia ever catch up? http://epthinktank.eu/2015/03/16/the-russian-economy-will-russia-ever-catch-up/

BBC News, 13.04.15: Russians reel from economic crisis http://www.bbc.co.uk/news/world-europe-32220335

ESO: Background information: Russia downgraded to junk status for first time in decade http://www.europeansources.info/record/russia-downgraded-to-junk-status-for-first-time-in-decade/

EurActiv, 09.06.15: Putin gives amnesty to offshore capital http://www.euractiv.com/sections/europes-east/putin-gives-amnesty-offshore-capital-315228

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