RUSSIA'S ECONOMY IS HEAVILY RELIANT ON NATURAL RESOURCES. IT NEEDS TO ADAPT TO SUSTAIN ITS GLOBAL AMBITIONS. HERE'S HOW.
Nothing is constant. Especially natural resources. More importantly, resources which are extracted rampantly SINCE decades. Russia's $354,853 million (10th in the world) is heavily reliant on its natural resources. Oil, natural gas & diamonds constitute around 70% of Russia's total exports. When oil prices fall below 40$ per barrel, Russian GDP contracts by 5%.
RUSSIA EXPORTS (source from tone.com)
Hence it is imperative that Russia adjust its economic structure for a more robust & resilient economy. Also American sanctions have had a detrimental effect on the growth potential of Russia.
MY POSSIBLE STEPS FOR RUSSIAN ECONOMY:
1.Agriculture.
I am aware that Russian climate specially in its northern regions is not suitable for agriculture. But its territory is vast (after all its the world's largest country area wise). Its population is comparatively quite low. So there is scope for export of food grains. Currently, its the world's largest wheat exporter. It can achieve this feat in corn & barley.
Russia also enjoys healthy relations with China so it can make use of Chinese innovation in agriculture. There is scope for enhancing production in Urals & northwestern Siberia (refer map)
RUSSIA AGRI-PRODUCTION (source USDA)
2. Capital Goods.
Simply put, Capital goods refer to plant & machinery which help in production of other goods and services. An example is a robot used in automobile production. Since the days of USSR, Russia had had a good industrial base. It can diversify its economy by producing more capital goods and exporting it to developing economies like India,Poland and Rwanda.
3. Digital economy.
In a recent post THE DATA WARS I had explained how Russia is emerging as a leader in this sphere. It can use this advantage to avail economic benefits by setting up digital services like cloud computing, AI and information systems.
DIGITAL ECONOMY (source HP)
4. Travel & Tourism
There is a misconception that tourism cannot reap economic dividend. However, it brings foreign exchange, generates employment in hospitality sector and enhances the global image of a nation. Russia has not utilized its scenic beauty, glory of the past and modern marvels sufficiently to attract tourism.
SOME RUSSIAN BEAUTY (source discover Russia)
MY CONCLUSION;
Putin plans to change the Russian constitution transferring some powers from President to the state Duma bringing stability and reducing autocracy.This is good for its long term prospects.
The transition period for Russian economy is ripe amidst China-US decoupling.
The Chinese used Russian help to industrialize their economy under Mao Zedong in 1960s. Russia can now ask for Chinese to reciprocate to digitize its economy.
THATS ALL. I BELIEVE THIS WAS MY MOST IN DEPTH ARTICLE. HOPE YOU GAINED SOME KNOWLEDGE.
прощание (BYE IN RUSSIAN!)