12.4 Russian Economy
1. Introduction
Russia has an upper-middle income mixed and transition economy with state ownership in strategic areas of the economy.
Market reforms in the 1990s privatized much of Russian industry and agriculture, with notable exceptions to this privatization occurring in the energy and defense-related sectors.
Russia’s vast geography is an important determinant of its economic activity, with some sources estimating that Russia contains over 30 percent of the world’s natural resources.
Russia relies on energy revenues to drive most of its growth. Russia has an abundance of oil, natural gas and precious metals, which make up a major share of Russia’s exports.
The economic development of the country has been uneven geographically with the Moscow region contributing a very large share of the country’s GDP.
There has been a substantial rise in wealth inequality in Russia since 1990 (far more than China and other Eastern European countries).
In the post-Soviet years, foreign direct investment was encouraged, but it was constrained by unfavorable conditions, including state intervention in industry, corruption, and weakness in the rule of law. Investment by non-Russian companies was also discouraged by moves taken by the Russian government to increase state ownership in various industries, including oil and gas, aviation, and automobile manufacturing.
2. Economy
The harshness of the Russian environment is reflected in the small proportion of land that is used for farming. The main product of Russian farming has always been grain, which occupies considerably more than half of the cropland. Wheat is the chief cereal, followed by barley, rye, and oats.
Russia contains the world’s largest forest reserves, and its lumbering, pulp, paper, and woodworking industries are particularly important. More than two-fifths of Russia is forested, and the country has more than one-fifth of the world’s total forests—an area nearly as large as the continental United States.
Russian forests have very slow rates of growth because of the cold, continental climate, and the country has lost about one-third of its estimated original forest area. Coniferous species are predominant and Russia is among the world leaders in the production of wood-related products, such as saw lumber, pulp, paper, and cardboard.
The fishing industry plays a significant role in the Russian economy. With access to the substantial resources of both the Atlantic and Pacific oceans, marine fishing is particularly well developed. There are also important inland fisheries on lakes and rivers, including a good deal of fish farming. The primary exports are salmon, crabmeat, caviar, beluga, sterlet, and herring.
3. Resources & power
Russia has enormous energy resources and significant deposits of many different minerals. Most, if not all, of the raw materials required by modern industry are found within its borders.
Its coal reserves are particularly extensive. Russia is among the worlds leading producers of oil, extracting about one-fifth of the global total.
It also is responsible for more than one-fourth of the world’s total natural gas output. Extensive pipeline systems link production sites to all regions of the country, the neighboring former Soviet republics, and, across the western frontier, numerous European countries.
4. Indigenous Peoples and Demographics of the Population
There are over 100 identified ethnic groups in Russia.
Of them, 41 are legally recognized as “Indigenous small-numbered peoples of the North, Siberia, and the Far East.” These are the only groups that are legally protected as Indigenous peoples; to meet the requirements, a group of peoples must number fewer than 50,000 people, maintain a traditional way of life, inhabit certain remote areas of the country, and identify as a distinct ethnic group.
Additionally, there are 24 larger ethnic groups that are identified as national identities or titular nations. These groups inhabit independent states or autonomous areas in Russia, but do not have specific protections under the law.
The Indigenous peoples of Russia are so varied and diverse that it would be a disservice to try and provide a cultural overview.
They do have some characteristics in common: many are nomadic or seminomadic, practice animism, and have lifestyles based on hunting, gathering, fishing, and reindeer herding.
In many of these groups, an adherence to traditional lifestyle has become even more important since the collapse of the Soviet economy.
The languages of the Indigenous groups of Russia are numerous, but most of them belong to one of three main ethno-linguistic groups: Uralic, Altaic, and Paleo-Siberian.