The Contemporary Russian Economy: A Comprehensive Analysis

Preface
Contents
Notes on Contributors
Abbreviations
List of Figures
List of Tables
List of Boxes
Part I Natural and Human Resources
1 Natural Resources, Geography, and Climate
1.1 Geography
1.2 Climate and Environment
1.3 Natural Resources
1.3.1 Aquatic Resources
1.3.2 Land
1.3.3 Mineral Resources
1.4 An Overview of Key Mineral Resources
1.4.1 Oil
1.4.2 Natural Gas
1.4.3 Coal
1.4.4 Uranium
1.4.5 Iron
1.4.6 Copper
1.4.7 Nickel
1.4.8 Gold
1.4.9 Silver
1.4.10 Diamonds
1.4.11 Phosphates and Potassium Salts
1.5 Natural Resources and Environmental Factors of Human Settlement Patterns
1.6 Infrastructural Aspects
References
2 Human Resources
2.1 Human Capital in Russia from an International Perspective
2.1.1 Population Size and Growth Rate
2.1.2 Human Development Index
2.2 Population Structure and Main Demographic Trends
2.2.1 Trends in Fertility and Mortality
2.2.2 Regional Variation
2.2.3 Mortality from an International Perspective: Russia’s Mortality Crisis
2.2.4 Fertility in Russia from an International Perspective
2.2.5 Age and Gender Structure of the Population
2.2.6 Aging (Dependency Ratios)
2.3 Health
2.3.1 Causes of Death
2.3.2 Socially Significant Diseases: Tuberculosis and Diabetes
2.3.3 Health Detrimental Behaviour: Alcohol Consumption and Smoking
2.4 Education
2.4.1 Enrolment Rates and Education Structure
2.4.2 Quality of Education
2.5 Conclusions
References
Part II Historical Roots
3 Capitalist Industrialisation and Modernisation: From Alexander’s Reforms Until World War I (the 1860s–1917)
3.1 Introduction
3.2 Reforms Between 1861 and 1905
3.2.1 Overview
3.2.2 Emancipation of the Serfs
3.2.3 Education Reform
3.2.4 Judicial Reform
3.2.5 Administrative Reform
3.2.6 Modernisation of the Army and Navy
3.2.7 Laws Improving the Conditions of Factory Labour
3.2.8 Summary
3.3 The 1905 Revolution and Institutional Transformation
3.3.1 Political Changes
3.3.2 The Stolypin Land Reform
3.4 Sectoral Transformation: The 1880s–1913
3.4.1 Agriculture and Trade
3.4.2 Financing Industrial Development
3.5 Society
3.5.1 Standard of Living, 1880s–1913
3.6 The Intelligentsia and the Emergence of Radical Activism
3.7 World War I and Revolution
References
4 The Soviet Economy (1918–1991)
4.1 Introduction
4.2 Civil War and ‘War Communism’ (1918–1921)
4.3 The ‘New Economic Policy’ (1921–1928)
4.3.1 Retreat
4.3.2 Command Institutions
4.3.3 Leadership Struggle Over Rapid Industrialisation
4.3.4 Rapid Post-WWI Economic Recovery.
4.3.5 Comparative Performance Estimates, 1913 and 1928
4.4 Constructing Soviet Economic Institutions
4.4.1 The First Wave of the Forced Stalinist Industrialisation (1929–1940)
4.4.2 The Period of World War II (1941–1945)
4.4.3 The Performance of the Economy After Stalinist Industrialisation
4.5 Reforming the Soviet Economy (1945–1991)
4.5.1 The Period of the Post-War Stalinist Reconstruction (1945–1953)
4.5.2 Partial Changes in the Political System and Economic Policy in the Post-Stalin Era (1953–1985)
4.5.3 The Performance of the Late Soviet Economy
4.5.4 The Period of Gorbachev’s Perestroika (1986–1991)
References
Part III Institutions and Their Transformation
5 Constitutional Foundations of the Post-communist Russian Economy and the Role of the State
5.1 Introduction
5.2 The Move Towards Legalising the Market Economy: Promises and Problems
5.2.1 The Constitution and the Civil Code
5.2.2 The Problem of Delay
5.3 When Politics and Economics Clash: The Period After 2000
5.3.1 The Russian Economy Under Putin
5.4 The Future of the State in the Russian Economy
References
6 Business and Investment Climate, Governance System
6.1 Introduction
6.2 Definitions and Measurement Methodology
6.3 International Perception of the Business and Investment Climate in Russia
6.4 International Perception of Governance and Political System in Russia
6.5 Flawed Governance as the Factor Responsible for Poor Business and Investment Climate
6.6 Economic Consequences of a Poor Business and Investment Climate and Flawed Governance
References
7 Evolution of Ownership Structure and Corporate Governance
7.1 Introduction: Private Versus Public Sector
7.2 Privatisation from the Origins: Discussions, Models, and Results
7.3 Public Sector: Quantitative Dynamics and Comparative Effectiveness
7.4 Corporate Governance: Panacea or Imitation?
7.5 Stock Market: Historical and Future Challenges
7.6 Conclusions
References
Part IV Major Sectors and Regional Diversity
8 Structural Changes in the Russian Economy Since 1992
8.1 Introduction
8.2 Structure of the Russian Economy: International Comparisons
8.3 Liberalisation Shock and Further Restructuring of Russian Industries
8.4 Industrial Policies in Russia
References
9 Energy Sector
9.1 Introduction
9.2 Energy Consumption and CO2 Emissions
9.3 Overview of Russia’s Policy Framework Relevant to the Energy Sector
9.4 Russia’s Energy Mix
9.4.1 Natural Gas
9.4.2 LNG
9.4.3 Gas Pricing
9.4.4 Oil
9.4.5 Oil Pricing
9.4.6 Coal
9.4.7 Coal Pricing
9.4.8 Renewables
9.4.9 Electricity
9.4.10 Electricity Pricing
9.5 Russia’s Approach to the Challenges of Climate Change
9.5.1 A Green Economy Transition
9.5.2 Russia’s Energy Strategy and Its Challenges and Opportunities Associated with a Green Transition
9.6 Consequences of Russia’s Military Aggression on Ukraine
9.7 Conclusion
References
10 Agriculture
10.1 Introduction
10.2 Soviet Agriculture: Major Challenges and Transformation Objectives
10.3 The Original Shape of Agrarian Transformation in the Early 1990s
10.4 Transformation-Related Output Decline in Agriculture
10.5 Contemporary Agri-Food Sector in Russia
10.6 Future Challenges
10.6.1 Sustainability in the Agri-Food Sector
10.6.2 Innovativeness of the Agri-Food Sector
10.6.3 Rural Development
References
11 Regional Diversity
11.1 Demographic and Social Diversity of the Russian Regions
11.2 Economic Diversity
11.2.1 Differences in Gross Regional Product
11.2.2 GRP Per Capita
11.2.3 Capital Investment Dynamics and Variation Across Regions
11.3 Challenges of Spatial Development and Regional Policy of Russia
11.3.1 Intergovernmental Transfers
11.3.2 Federal Budget Expenditures in the Regions
11.3.3 Federal Tax Incentives in Selected Territories
11.4 Summary
References
Part V Russia in the Global Economy
12 Russia in World Trade
12.1 Introduction
12.2 Russia’s Trade Growth During Transition
12.3 Russia’s WTO Membership
12.4 Russia’s Bilateral and Regional Trade Agreements
12.5 The Geography of Russia’s Foreign Trade
12.6 Trade Policy Challenges in the Early 2020s: From Security Tensions to the Green Transition
References
13 Foreign Investment
13.1 Introduction and Context
13.2 Trends and Patterns of Foreign Investment
13.2.1 Dynamics of Foreign Investment
13.2.2 The Role of Stocks and Flows in Measuring Foreign Investment
13.2.3 Modes of Entry of FDI
13.2.4 Selected Sectoral and Geographical Patterns of Foreign Investment
13.2.5 Measurement Problems (‘Through a Glass Darkly’)
13.3 The FDI and FPI Intensity of Russia in International Comparison
13.3.1 How the Foreign Investment Indices are Constructed
13.3.2 Why are the Indices of Russia Low?
13.4 Key Issues in Foreign Investment and Development in Russia in an International Context
13.4.1 The Flow of Financial Resources in Foreign Investment
13.4.2 The Package of Resources in FDI
13.4.3 Dealing with the Flipsides of the FDI Impact
13.5 The Role of MNEs
13.5.1 The Universe of the Largest Russian MNEs
13.5.2 The Role of the State
13.6 Looking Forward
References
14 Sanctions and Forces Driving to Autarky
14.1 Introduction
14.2 The 2014 and 2018 Rounds of Western Sanctions
14.3 Russia’s Policy Response in 2014 and the Following Years
14.4 Economic Impact of the First Two Rounds of Sanctions and Countersanctions
14.5 The 2022 Round of Western Sanctions
14.5.1 Individual Sanctions
14.5.2 Financial Sanctions
14.5.3 Energy Sanctions
14.5.4 Trade Sanctions
14.5.5 Transportation Sanctions
14.5.6 Media Sanctions
14.5.7 Diplomatic Sanctions
14.5.8 Withdrawal from Russia and Spontaneous Boycott
14.6 Russia’s Response Measures to the 2022 Sanctions
14.6.1 Short-Term Stabilisation Measures
14.6.2 Support for Aggregate Demand and Supply
14.6.3 Retaliation (Countersanction) Measures
14.6.4 Sectoral Measures to Compensate for the Withdrawal of Imports and FDI
14.7 Impact of Sanctions and Geopolitical Confrontation on Russia’s Economic Development
References
Part VI Economic and Social Policy Challenges
15 Economic Growth
15.1 Introduction
15.2 The Global Economy and Russia During 1990–2019: An Overview
15.3 Structural Change, Labour Reallocation, and Productivity Growth
15.4 Transformational Recession (1990–1998)
15.4.1 The Post-Transition Recovery (1999–2008)
15.5 The Decade of Stagnation (2009–2019)
15.6 Conclusions
Appendix 15.1: Country Grouping
References
16 Macroeconomic Vulnerability, Monetary, and Fiscal Policies
16.1 Introduction
16.2 Episodes of Macroeconomic and Financial Instability
16.2.1 Collapse of the Soviet Rouble and Failure of Macroeconomic Stabilisation After the Collapse of the Soviet Union (1989–1995)
16.2.2 The Crisis of 1998–1999
16.2.3 Fallout from the Global Financial Crisis (2008–2009)
16.2.4 The 2014–2016 Crisis
16.2.5 The COVID-19 Crisis (2020–2021)
16.2.6 Macroeconomic Consequences of the War with Ukraine (2022)
16.3 Sources of Balance-of-Payments and Currency Fragility
16.4 Inflation, Monetary Policy, Central Bank Independence
16.5 Evolution of Fiscal Policy
16.6 Tax System
16.7 Conclusions
References
17 Labour Market, Employment, and Migration
17.1 Introduction
17.2 A Concise Story of Labour Market Adjustment
17.2.1 The First Decade—From Plan to Turmoil
17.2.2 Unexpected Boom and Surprising Recovery
17.2.3 The New Crisis and Endless Stagnation
17.3 A Miracle of Low Unemployment?
17.4 Puzzles of Adjustment: How Does It Work?
17.5 The Role of Labour Market Institutions
17.5.1 Employment Regulations
17.5.2 Wage Setting and a Two-Tier Wage Structure
17.5.3 Trade Unions and Wage Agreements
17.6 Structural Change and Informality
17.7 Wages, Low Pay, and Inequality
17.7.1 Dynamics and Levels
17.7.2 Low Pay
17.7.3 Inequality
17.8 Human Capital, Educational Boom, and High Returns
17.9 Conclusions
References
18 Standard of Living and Social Policy
18.1 Introduction
18.2 Living Standard, Income, and Wealth Inequality in Russia from an International Perspective
18.3 Income and Wealth Inequality: Measurement, Dynamics, and Determinants
18.3.1 Income Inequality
18.3.2 Regional Income Inequality
18.3.3 Determinants of Inequality: Inequality of Opportunities
18.3.4 Wealth Inequality
18.4 Poverty: Dynamics, Determinants, and Measurement Issues
18.4.1 Poverty Measures and Dynamics
18.4.2 International Perspective
18.4.3 Determinants of Poverty, Poverty Profiles, and Poverty Risk Factors
18.4.4 Regional Dimension of Poverty
18.5 Social Security and Social Policy Instruments
18.5.1 Configuration of the Social Security System in Russia
18.5.2 Social Protection Components
18.5.3 The Impact of Social Transfers on Poverty
18.5.4 Social Policy Instruments: Maternity and Child Benefits
18.5.5 Social Policy Instruments: Labour Pension
18.6 Conclusions
References
Part VII Summary
19 Russia’s Two Transitions (1992–2003 and 2003–2022)
19.1 Introduction
19.2 From Plan to Market: The Heroic Decade of the 1990s
19.3 The Turning Point of the Russian Transition (the Early 2000s)
19.4 The Autocratic and Dirigiste Drift (2003–2014)
19.5 Towards the War Economy (2014–2022)
19.6 The Russian Economy in the Early 2020s
References
Index