More and more media sources around the globe turn to the topic of Russia and its economic and political potential. Especially big interest comes from Western editions, which like comparing Russia to some poor African states, thereby trying to hint at the poor economic conditions inside the country.
Meanwhile, Russians want their country to be as wealthy as Germany, for example. At the same time, Forbes thinks Russia is like many other East-European economies.
In particular, Mark Adomanis, a Forbes observer specializing in Russia and the CIS, decided to compare Russia with several other countries to get a fresh look at the situation. So, what is the outcome of this experiment?
First of all, Mr. Adomanis is convinced that the Russian economy shouldn’t be compared to those of India and China since the former is definitely lagging behind. As for another BRICS brother of Russia, which is Brazil, the Russian economy looks better. Alas, the author used incorrect or outdated economic figures when comparing Russia and Brazil since Russia’s GDP increased only by 1,2% in 2013 while Brazil’s GDP gained 3,3% during the same period. The bottom line is that Russia is lagging behind most emerging and developed economies.
Still, 2014 is expected to be a better year for Russia. By the way, a weaker national currency may contribute to this. It may contribute to higher export proceeds, thereby helping Russia to see its GPD increasing by 2,5% this year.
Meanwhile, the Russian Ruble keeps showing weakness against the US Dollar as USDRUR is rallying. The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of USDRUR:
The same hods true for EURRUR:
Let’s go back to Adomanis. He says that it would be more logical to compare Russia t other East-European states. Well, there is nothing new in this idea since Russian experts have been advocating it for years.
As for the problems of the Russian economy, Adomanis doesn’t reveal anything secret. The major reasons are flight of capital (indeed, $63bn left Russia last year) and, of course, corruption. Still, he forgot to mention the commodity nature of the Russian economy, low investments and production efficiency.
Anyway, despite all of its drawbacks, the Russian economy is still growing, though slowly. Apparently, it needs improvement and restructuring.
