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World Economic Forum in Russia
Moscow, Russia 17-18 October 2005
Executive Summary
Russia is awash with cash, mainly as a result of oil prices nearly doubling in the last two years. It has a stabilization fund of US$ 34 billion and gold and currency reserves of US$ 160 billion. The worry is that the current influx of such wealth is making the government ever more complacent about making the wide-sweeping and urgent reforms that are vital for its long-term success. more
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| In Depth |
In Depth |
| Rent Seeking and the Rule of Law |
Economic Diversification |
Russia is neither a democracy nor an autocracy. Though there are opposition parties, they are often seen only as tolerated political voices while President Putin has continued to centralize power in the Kremlin. The rules of the political game are neither clear nor stable and the mechanisms to hold the government accountable are ineffective.
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Commodity exports dominate Russia's economy. Crude oil contributes 30% of total export revenues, and natural resources exports accounted for 56% of the state budget in 2003-04. GDP and oil revenue growth are highly correlated. Excess oil revenues feed a stabilization fund which currently amounts to roughly 5% of GDP but is predicted to grow to over US$ 50 billion by 2007. So far, the government mainly uses this fund to pay off IMF debt. |
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