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RUSSIA

RUSSIA. Russia on take-off stage. Russia is on take-off stage according to Rostow’s Stages of Growth because: During the last eight years Russia has experienced significant economic growth, as favourable prices on global commodity markets have increased GDP. Growth of GDP (PPP).

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RUSSIA

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  1. RUSSIA

  2. Russia on take-off stage Russia is on take-off stage according to Rostow’s Stages of Growth because: • During the last eight years Russia has experienced significant economic growth, as favourable prices on global commodity markets have increased GDP.

  3. Growth of GDP (PPP)

  4. Russia on take-off stage (cont’d) • Nowadays Russia has high level of investment and savings and it is able to mobilize domestic and foreign savings in order to generate sufficient investment to accelerate economic growth.

  5. Net National Savings • 2005 $192,354,000,000 2006 $192,879,000,000 2007 $239,964,000,000 2008 $323,845,000,000 2009 $136,058,000,000 %24.6 Gross National Saving(%Value of GDP)

  6. Stock of direct foreign investment (at home) • $297.4 billion (31 December 2010 est.) • country comparison to the world: 18 $256.2 billion (31 December 2009 est.)

  7. Stock of direct foreign investment (abroad) • $274.6 billion (31 December 2010 est.) • country comparison to the world: 17 $222.9 billion (31 December 2009 est.)

  8. Russia is a post-industrialized country According to patterns of development theory Russia: • has passed the agricultural level to the industrial level • has stable accumulation of physical human capital • has changes in consumption • has the growth of cities and urban industries • child birth rate decrease so providing education becomes easier

  9. Urbanization Russia is one of few nations that have small towns hundreds of kilometres from major population centres. Relatively few Russian people live in villages—rural population accounted for 26% of the total population according to the 2010 Russian Census.

  10. Russia is a post-industrialized country (cont’d) There has been a significant inflow of capital in recent years from many European investors attracted by cheaper land, labor and higher growth rates than in the rest of Europe. Amazingly high levels of education and societal involvement achieved by the majority of the population, including women and minorities, secular attitudes, mobile class structure, better integration of various minorities in the mainstream culture set Russia far apart from the majority of the so-called developing countries and even some developed nations.

  11. Russia is a post-industrialized country (cont’d) Russia has good transportation, communication, high level of education and health. That’s why there are more educated and healthy people therefore, more qualified labor force which leads to more efficient and effective production and economic growth. Enough number of financial institutions, integrated market and the large number of money market operations also show that Russia is post-industrialized country.

  12. Main challenges • Insufficient share of services in GDP by sector and labor force – by occupation • High Inflation • High Income Inequality

  13. GDP by sector • Agriculture • Industry • Service 4% 59,1 % 36,8 %

  14. Labor force – by occupation Total: 75.49 million (2010 est.) • agriculture: 10% • industry: 31.9% • service: 58.1%

  15. Inflation rate

  16. Inflation rate (consumer prices)2010 In 2010 the inflation rate in Russia reaches 6,9 %. • Inflation reflects an erosion in the purchasing power of money • Negative effects of inflation include a decrease in the real value of money • Uncertainty over future inflation may discourage investment and savings • High inflation may lead to shortages of goods

  17. Income inequality National income distribution - Gini-coefficient: 42.2 % (2009) There is a growing gap between rich and poor in Russia. Between 2000–2007 the incomes of the rich grew from approximately 14 times to 17 times larger than the incomes of the poor. The income differentiation ratio shows that the 10% of Russia's rich live increasingly better than the 10% of the poor, amongst whom are mostly pensioners and unskilled workers in depressive regions.

  18. Gini coefficient of national income distribution around the world (2009) RUSSIA

  19. Income inequality (cont’d) In 2010, record shows to low of poverty in Russia (12.8% of the population had incomes below the subsistence level). "The rapid growth of a living wage, as well as low rates of growth of money income in 2011 may impact on the headcount of the population that is estimated to be 13.1%," - the document says Economic Development.

  20. Conclusion Russia is on the take-off stage and it is a post-industrialized country. It has a positive tendencies for passing to the next stage “the drive to maturity” and new economy but it still has some challenges that inhibit this process. Main of these challenges: inefficient share of services in GDP by sector and labor force – by occupation, high inflation, high income inequality because they have great influence on Russia’s economy. These are the main obstacles for going to the next level because they reduce country’s productivity, desire of people to save and invest, don’t stimulate demand for goods and services and therefore reduce economic growth.

  21. Thank you for your attention!!! Presentation was prepared by: Nataliya Dubrovskaya Gorkem Simsek Asiye Kaya Kufre Eyo

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