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Sceptics’ Objections

  • this economic boom cannot be sustained, and is a house built on sand

  • Putin’s success is simply the luck of the geological draw

  • Russia is the world’s number two oil producer and number one natural gas producer

  • global prices for oil quintupled between 2002 and 2008

  • the global commodity boom cannot be sustained indefinitely, and will inevitably be followed by a slump

  • there is little sign that Russia’s political and economic institutions are prepared for such a development

  • the surge in oil revenue has produced a spike in consumer spending, largely satisfied by imports, but has not stimulated a recovery of Russian manufacturing or agriculture

  • the lion’s share of the wealth has been siphoned off by the oligarchs who are investing most of it abroad

  • the second major beneficiary of the oil boom has been the Russian state, which has doubled the ranks of bureaucrats and tripled spending on the military

  • the state has reasserted its control over key industrial corporations, especially in the oil sector, leading to the emergence of a new hybrid form of state oligarchic-capitalism

  • the climate remains difficult for small business development, with small firms accounting for only 17% of employment compared to 60% in the US

  • despite ambitious plans to diversify the economy and build on Russia’s technological and human capital, Russia has shown little sign of being able to compete in cutting-edge industrial sectors

  • a downturn in oil prices will expose the shaky foundations of Russia’s development model

  • only a small proportion of the oil receipts are trickling down to the mainstream of Russian society

  • the ranks of the poor and disenfranchised will continue to grow, leading to political challenges which Russia’s authoritarian regime is ill-equipped to handle

  • 17 years after the collapse of the Soviet Union, Russia is still in a state of transition from the failed model of the past to an as yet uncertain future

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Economy under Putin

Learn Russian with Us

Russian Federation

The "Catching up" Cycles
"Non-organic" Reforms
Great Leap to Capitalism
Russia's Privatization
Deformed Capitalism
Coping with Transition
The Yeltsin Era
Yeltsin's Legacy
Putin's Plan
Russian Federalism
The Chechen Problem
"Deprivatizing" the State
First and Second Dumas
Third and Fourth Dumas
Civil Society
"Controlled" Democracy

Post-Soviet Geopolitics

Paradoxes of Russian Mentality
Economy under Putin
The Putinite Order
Putin's Choice
People Speak (Opinion Polls)
Tables and Statistics

Russia from A to Z

Images & Video