The Russian Economy

With the 8th largest economy in the world by nominal GDP, Russia has experienced some economic growth since the turn of the 21st century. However, the country has experienced difficulties in the transition from a centrally planned economy to a market economy. For about 60 years, Russia (then the Soviet Union) operated as a centrally planned economy, directed by the Communist Party. In a centrally planned economy the state makes all of the economic decisions and controls what is produced as well as the distribution of resources. The early 1990s saw the fall of Communism and this marked Russia's transition to a market economy.

Russia has enormous natural resources—oil and gas in particular. Oil, natural gas, timber, and metals account for 80% of the country's exports. Earnings from the export of oil allowed Russia to increase its foreign reserves from $12 billion to $597.3 billion over a 9-year period starting in 1999.

Most of the Russian economic structure that existed during the Communist years began under the leadership of Joseph Stalin. There was a central planning system which allowed Soviet leaders to quickly muster resources during times of crisis and to re-industrialize the country after World War II. Russia made its significant initial turns toward a market based economy in the early 1990s under the leadership of Boris Yeltsin. Economic restructuring required the establishment of the commercial entities such as banks and commercial legal codes, allowing the economy to operate efficiently. An important aid in reaching transition goals was the opening of domestic markets to foreign trade and investment, which linked Russia's economy with the rest of the world. In 2011, Russia joined the World Trade Organization, a move that allowed even greater access to overseas markets.

Two of the main problems Russia continues to deal with in economic development are:
•Modernization of infrastructure
•Uneven economic development geographically.

As far as the first, the Russian government has said that $1 trillion will be invested into the development of infrastructure by 2020. Russia has one of the lowest foreign debts among major economies, mostly due to massive repayment of debts in 2006.