Russian Federation & Globalization

Category: Globalization

Economic overview: At the end of 2007, Russia ended with its ninth continuous year of growth. The financial crisis in 1998 was driven by high oil prices and an inflated ruble, Russia has seen an increase in oil demand and a subtle but powerful increase in investments. Since 2003, poverty has steadily decline and the middle class has expanded. Russia has also improved its international financial situation by ending 2001 and 2007 with a federal surplus. With the exportation of oil, Russia has increased their foreign reserves tremendously, from $12 billion in 1999 to $470 billion in 2007, the third largest in the world. Putin’s instituted important reforms in tax, banking, labor, and land codes during his first term that have played a significant role in strengthening confidence for investors and business owners.
GDP growth rate: 7.6%
Labor force: 75.1 million. Agriculture: 10.8%; Industry: 28.8%; Services: 60.5%
Inflation Rate: 11.9% annual average


In 1998, Russia experienced a financial crisis in which the value of the ruble fell and the demand for oil wasn’t strong enough to sustain Russia’s economy. The IMF instituted “shock therapy” which was intended to quickly privatize Russia’s market economy. Shock therapy failed miserably. However, since 1999, the Russia government has been recovering due to an increase for oil demand and international investments.

-Desiree & Henry