Since the dissolution of the Soviet Union, the Russian
Federation is considered a market economy, and in 2016 the
country was the sixth largest economy in the world. However,
economy and business are still characterized by Soviet
economic policy. Business is adversely affected by the fact
that the banks are not sufficiently independent of political
and economic power, that the so-called oligarchs have a
strong influence and it is difficult for SMEs to obtain
The legacy of the Soviet era.
In the Soviet Union, so-called five - year plans were
used, which would increase the state's control over the
country's resources. One consequence was that production was
focused on heavy industry and energy and mineral extraction.
Soviet industries and agriculture were large. This is as a
result of the government trying to maintain control over
production and increase efficiency. Even today, this is
noticed by the fact that small and medium-sized industries
and agriculture are not common.
Since the Soviet system failed to distribute goods
efficiently, there was a shortage of both raw materials for
industry and everyday goods for citizens. For ordinary
people, personal networks became important to obtain the
necessary products. The pricing of goods did not reflect
supply and demand as in a market economy. When the Soviet
Union disintegrated and the Russian Federation introduced
market prices, this was something new for citizens, which
contributed to the economic turmoil in the early 1990s.
The 1990s posed several major challenges and changes in
the Russian economy. See also
Digopaul.com. In addition to the fact that the
production and corporate structure has not been reformed
since the Soviet era, high levels of inflation contributed
to making the situation unsustainable.
Extensive reforms were implemented to stabilize the price
level, among other things. The decisions were subsequently
criticized for being too hastily and ill-prepared.
Privatization was carried out to transfer large parts of
the business sector to private ownership. State-owned assets
would be distributed through a system of coupons, vouchers,
and auctions. In principle, all Russian citizens were able
to participate in privatization, but as citizens did not
receive sufficient information about the processes, many
lost the government assets.
Privatization was the fastest in trade, while it took
longer to privatize the large Soviet industrial companies.
In 1996, Russian authorities announced that 70 percent of
GDP was generated outside the state sector.
At the beginning of 1995, a certain stabilization of the
Russian economy was noticed. Over a few years, production
increased in certain industries, mainly smaller operations.
In 1998, however, the country was again hit by an acute
financial crisis. The International Monetary Fund granted
the Russian Federation a loan of USD 11.2 billion. As a
result of the financial crisis, the economic progress and
stabilization achieved in 1995-98 were lost. Inflation for
1998 was estimated at 85 percent. The economically turbulent
years hit the Russian citizens hard.
Putin in power.
From the turn of the millennium, the Russian economy grew
stronger. Growth averaged 7 percent per year. Exports
benefited from Russian goods becoming cheaper on the world
market at the same time as the price of oil rose, which
significantly increased Russian export earnings. The period
of economic success coincided with the appointment of
Vladimir Putin as President.
The Russian industry and the service sector had been
modernized, but the business sector was still dominated by
large companies. Small and medium-sized businesses were
difficult to establish. The fact that the Russian Federation
is highly dependent on commodity exports means that the
country is sensitive to changes in world market prices. This
became evident during the international financial crisis of
2008 and 2009 when the Russian Federation was hit by falling
oil prices. The Russian central bank lowered the value of
the ruble twice.
Russian Federation and the outside world.
The Russian economy stabilized in the years 2010-12 and
the country had a GDP growth of almost 5 percent. The
recovery was interrupted in 2014, when the economy again
deteriorated and the currency lost in value. This was mainly
a consequence of the financial sanctions imposed by the
outside world in response to the Russian Federation's
annexation of the Ukrainian Crimean Peninsula and the entry
into eastern Ukraine (see Donbass conflict).
In 2014, the world market price of oil fell by almost 40
percent and the Russian currency fell in value by 22 percent
against the US dollar. The ruble continued to weaken further
thereafter. At the same time, the proportion of people with
incomes below the poverty line increased.
Opinion surveys conducted in Russia in 2018 show that
there is widespread pessimism and that the country's economy
is described as chaotic. The country is also considered to
have major problems with corruption and great economic
inequality (see human rights).
After many years of negotiations, the Russian Federation
became a member of the World Trade Organization (WTO) in
Russian agriculture has shown poor returns for a long
time. The main agricultural areas are located in the
southern part of the European Russian Federation.
Good soils, but with a short vegetation season and
limited rainfall, are also found in southwestern Siberia.
The conditions for livestock management are relatively good,
but modern animal production is often limited by the supply
of forage crops. The distribution of agricultural products,
especially fresh produce, is hampered by large distances and
a lack of suitable transport and storage facilities. In
general, rural infrastructure is a major obstacle to
Traditionally, cereals, potatoes, beets and root
vegetables are the most important crops. Feed and oil plants
and flax also occur to a significant extent. From being a
major exporter of cereals during the Tsarist era, the
situation changed during the Soviet period. Low productivity
and long-time waste, combined with an increased investment
in animal production, contributed to the country's emergence
as a leading import nation in the 1970s, a pattern that
could not break out until the turn of the 2000s. In the
early 2000s, it was the first time in almost a hundred years
that the Russian Federation exported more grain than it
imported. During the 2010s, grain exports increased and the
country became one of the world's leading wheat exporters.
For Soviet agriculture, the first five-year plan (1928)
meant a large-scale transition to collective forms of
farming, often introduced under duress. In addition to the
state farms (dormitories), the peasants were organized into
collective farms (dormitories). In addition to these two
types of agricultural units, machine and tractor stations
were also set up, on which the kolchos had to rely on their
supply of machinery and agricultural technical expertise.
Taken together, these units were said to secure rural access
to goods and services, while promoting productivity through
the introduction of modern or industrial methods. In fact,
they served primarily as a control body and in addition
offered the state good opportunities to transfer resources
from the kolchos to the country's industry.
Programs for cultivation of new land and the introduction
of new crops and production forms have been launched on
several occasions. Throughout the Soviet period, state and
collective agriculture as well as central production
planning remained the organizational foundations of the
system. The system has only slowly been replaced by private
farming practices, and only then with a cautious and little
comprehensive reform effort during the second half of the
1980s. The dissolution of the Soviet Union allowed for a
more offensive policy, and at the beginning of 1993, most of
the former state and collective agriculture was at least
nominally organized so that the privatization of
agricultural land could take place. Despite this,
privatization has not been fully implemented.
By virtue of its vast assets in forests, the Russian
Federation has long been one of the world's leading
producers of timber, sawn timber, pulp and paper. It is
mainly the coniferous forest belt, the tajgan, which forms
the basis for the forest industry. The Tajgan goes south
into a mixed forest belt, whose more varied flora of species
is used for, among other things. furniture, matches and
During the post-war period, especially in the western
parts of the country, a decrease in the supply of raw
materials and rising production costs have been recognized
as a result of the fact that easily accessible forest areas
have been subjected to excessive harvesting and in some
cases also environmental degradation.
The extent of inshore fishing is hampered by the limited
access to temperate seas. Nevertheless, the local fishery
and fish processing industry is of great importance. This is
especially true when coastal fishing is combined with high
sea fishing, for which purpose the Russian Federation has
taken over numerically large fleets of trawlers and floating
canning factories from the Soviet Union. Residents,
especially in the Kaliningrad exclave, on the Barents Sea
and on the coast of the Russian Far East, have a large
radius of action and have sometimes had the opportunity to
exploit the territorial waters of former Soviet republics.
Accusations of predatory behavior occur.
Moreover, as one of a small number of countries, the
Russian Federation is still catching elections. Inland
fishing is also primarily of local importance. However, as
in so many other cases, large distances and poor transport
capacity limit access to the national market.
In many places, environmental degradation has gone so far
that conditions have drastically deteriorated.
Few countries can exhibit as extensive and diverse assets
of metals and minerals as the Russian Federation. Even after
the dissolution of the Soviet Union, the Russian Federation
is largely self-sufficient in this regard. The exception is
bauxite and chromium, where most of the Soviet Union's
production came from the then Soviet Republic of Kazakhstan.
The Russian Federation is regarded as the world's leading
producers of iron ore, nickel, cobalt, platinum, tin, copper
and gold. Beryllium, manganese, molybdenum and silver are
also extensively mined. However, earlier large deposits of
lead and zinc have been partially exhausted. In addition,
the Russian Federation also has good assets on barium,
diamonds, emeralds, sulfur and phosphates, and clay for
ceramics and building purposes.
So today's problems are not the size and diversity of the
assets, but rather are found in the often neglected
technology in extraction and processing as well as
bureaucratic organizational forms. Moreover, since the
deposits are in many cases located in peripheral regions
(the Kola Peninsula, the northern parts of central and
eastern Siberia, the Russian Far East), the long transports
offer both technological and economic difficulties. The
exceptions are mainly the iron ore fields, the most
important of which are found in the southern central part of
the European Russian Federation, and the Ural region with
various metals and minerals.
The Russian Federation is well stocked with energy raw
materials. Although the country's industry is a large and
often inefficient user of energy, there is considerable room
for export, especially of oil and gas. Since 1900, the
country has been one of the world's leading producers of
oil. The largest deposits are found in the central part of
Western Siberia, while the previously dominant mining areas
between Volga and Ural have been difficult to maintain
production volume. Oil is also extracted elsewhere in the
Russian Federation, for example in Sakhalin.
For a long time, however, the Soviet leadership,
especially under Stalin, chose to invest in coal as its
primary source of energy. Of the dissolved Union's three
largest coalfields, one is found, Kuzbass in central
Siberia, in its entirety within the borders of the Russian
Federation. In addition, the coal fields around the Petjora
River are an important asset. Smaller deposits are
distributed throughout the country, but are usually of local
importance only. Low-grade lignite deposits are also
extracted where deemed necessary, primarily in the Moscow
In addition to oil and coal, natural gas has since the
1970s developed into an important source of energy and
export revenue. Very large deposits are found, for example,
in northern West Siberia and the areas around Volga and
southern Ural. Water energy also plays a role in the
country's energy supply, and some of the world's largest
hydropower plants are located in the Russian Federation.
However, water energy has the disadvantage that most of the
capacity is in the Asian parts of the country. To compensate
for this, the major rivers in the European part of the
Russian Federation have also been expanded, with significant
consequences for the environment, fishing and river
transport. In addition, high-voltage technology for
long-distance transmission of electricity has been invested
and nuclear energy has been expanded.
During the Soviet period, the manufacturing industry, and
especially the heavy engineering industry, was a priority.
The iron and steel industry was particularly favored. Of the
more than sixty companies in this industry that accounted
for the supply of iron and steel to the Soviet Union, about
half are found in the Russian Federation today. The
geographical emphasis has been in the Urals and Kuzbass
during the 20th century, but due to the ore deposits in
Kursk and the increased use of scrap as raw material, a
large part of the modern steel industry is found today in
the European part of the country. Other metallurgy is
largely located in Ural and Siberia, partly due to proximity
to the raw material sources and partly due to military
considerations. The engineering industry, which is
undergoing rapid transformation, has primarily been
concentrated on a number of large and medium-sized cities
within a base triangle along the line St. Petersburg - Kursk
and its tip in Kuzbass. Thus, despite its geographically
dispersed structure of industrial combination in the
metropolitan cities of Moscow, Saint Petersburg, Nizhny Novgorod, Samara, Perm,
Chelyabinsk and Yekaterinburg. Particularly noteworthy is
that almost a quarter of this production comes from the
Moscow area. Other branches of the engineering industry,
such as manufacturing of agricultural machinery and mining
equipment, are more tied to their immediate marketing
The chemical industry was long overdue, but in pace with
increased fossil fuel extraction, the petroleum-based
production in particular has expanded. For the most part,
refineries and other processing plants are located near the
sources, with a significant center of gravity between Volga
and western Siberia. Production of, for example, plastics,
synthetic fibers, artificial fertilizers, solvents and
paints usually also follows this pattern. However, more
specialized industries (pesticides, pharmaceuticals and
cosmetics) are often found in Moscow or other metropolitan
The other process industry is strikingly often raw
material oriented. This may be mainly the case for paper and
pulp production. However, as the harvesting of forest for
domestic consumption and exports has progressed, the supply
of raw materials has become a problem. In addition, like
many others, this industry is characterized by outdated
production equipment and transport problems.
While the engineering industry in general benefited,
consumer goods production ended up in the cloud for a long
time. Although this has a regionally more fragmented
structure than other industries, some industries are
geographically concentrated. By tradition, textiles and
clothing have been dominated by the medium-sized cities of
the middle region. However, wool and linen have had to give
way to Central Asian cotton and synthetic fiber as the
prevailing material. Another peculiarity, which is partly a
legacy from the epoch of central planning, partly a result
of the attempts to convert the military industry to civilian
production, is that, above all, consumer capital goods are
often produced by companies with heavy workshop products or
weapons as a real specialty.
In the Soviet economy, foreign trade was of secondary
importance. Trade was organized through a foreign trade
monopoly, and its orientation and scope were usually
regulated through bilateral agreements with other states.
For the trade in the Eastern Bloc, the nominally
supranational organization, SEV (COMECON), was used, within
whose framework transactions and goods flows were organized.
The Russian Federation is therefore facing the task of
reorganizing foreign trade. Already during the late 1980s
increased leeway was given to world market pricing, but it
was only with the dissolution of the Union that trade with
the outside world was liberalized. The structure of the
Russian Federation's foreign trade has only partially
changed compared to the Soviet period. Above all, one can
note the great dependence on commodity exports. Energy (oil
and gas) and minerals as well as forest raw materials and
sawn timber are important components in this regard. The
dissolution of SEV has entailed a certain reorientation of
these exports, as the countries outside the old eastern bloc
today constitute the most important market. At the same
time, the former Soviet republics have been recognized as
having a reduced supply of, in particular, energy supplies
from the Russian Federation.
Other export goods include furs, food and engineering
products (including transport). The greatest successes are
likely to have been noted in the arms exports, whose sales
market has expanded.
As in the Soviet period, many industrial products are
imported from the Western world. The previous embargo on
technology exports to the Russian Federation has been
lifted, which has enabled increased Russian use of the
electronics products of the Western world. At the same time,
imports of consumer goods have increased significantly in
scale, and the country still relies on food imports for its
supply. Imports of raw materials have decreased in scale as
industrial production has declined, but the Russian
Federation is still dependent on imports of mainly bauxite
and some inputs for the chemical industry. As a whole,
imports have been reoriented to increasingly rely on Western
European, North American and East Asian suppliers. Trade
with the former Eastern bloc and the Third World is
Tourism and gastronomy
In 1994, the Russian Federation was visited by 900,000
foreign tourists, in 2015 the number of visitors was 33.7
million. About 65 percent of these come from other former
Soviet states, but some are believed to be guest workers.
The two largest tourist destinations are Saint
Petersburg, with stately architecture and history as the
capital of the last tsars, as well as Moscow, the country's
economic and political center. Other historically
interesting cities include Yaroslavl 250 km northeast of
Moscow, one of the oldest Russian cities, Novgorod 150 km
southeast of Saint Petersburg, with one of the country's
oldest fortifications and the Byzantine Sofia Cathedral from
the 1040s and 1050s, Ekaterinburg on the east side of the
Ural Mountains, Astrachan 70 km north of the Caspian Sea,
with fortifications from the 16th century, and Irkutsk in
southeastern Siberia, an old hub of trade with China and
cultural center for the whole of eastern Siberia.
The Trans-Siberian Railway, whose first section was
opened in 1905, is one of the major tourist attractions. The
railway is just over 9,300 km long, and today you can choose
between several different routes. A trip from Moscow to
Vladivostok takes six and a half days. You can also combine
with stops in cities along the way. The world's largest
freshwater lake, Lake Baikal in Siberia, is about to become
a major attraction for nature enthusiasts.
Its beaches and surrounding forests have been set aside
as a national park. Traveling on the Russian Federation's
huge river and canal network is also popular.
Russian cuisine, which at the turn of the 1900s could be
equated with the French in refinement and finesse, rests on
a wealth of raw material from different regions and climatic
types today, wiped out by the major political changes. The
basic features date from the peasantry of the 16th century.
The rye turned into sour rye bread, the grits into porridge.
Mushrooms, fish and vegetables depleted the diet and were
preserved to last all year. Meat was a luxury item, where
game was more common than domestic sheep. The religion,
which stipulated many fasting days during the year, forced
the Russians to feed on vegetables, fish and mushrooms; meat
and dairy products were prohibited during fasting. They
usually did not mix raw materials, and pure flavors were
long one of the most distinguishing features of Russian
cuisine. Acidic and salty flavors were already prevalent
then, as was the soup the most common dish.
During the 18th and 19th centuries, it became customary
among the gentlemen to retrieve their chefs from abroad, and
influences from mainly France, but also from Germany, the
Netherlands and Scandinavia, made a marked mark. The impact
was also reciprocal; Russian cuisine and its serving
technology, ie. to serve one dish at a time, broke through
in France and thereby throughout the rest of Europe. Now
came the custom of drinking tea and eating starters, called
zakuski. These were developed into veritable
sandwich tables, which are traditionally served with vodka.
They consist of salads on cabbage, beets, potatoes, apples
and horseradish, herring in various forms, cooked fish,
caviar, vegetable dishes, pies, pelmeni (ravioli
with meat or cheese filling), syrniki (cheese balls
in the smetana)), rastegaj (egg and salmon filled
pies) and of course different types of bread.
The soup is still the basis in the food intake today,
shtji (cabbage soups) is most common, borscht
(beetroot soup) most knowledgeable.
Among the fish dishes are boiled jellies with
horseradish. Eel and salmon can make kulebjaka, a
pajrulle or pierogi with hard-boiled eggs. The game (eg bear
and deer) still occupies a place of honor among the meat
dishes, others are the cholod (meat baptism),
kurnik (chicken and rice roasted) and solonina
(salted beef with sauerkraut and potatoes). The desserts
often contain fruits, nuts, berries and milk; chalva
is walnut or sunflower seed pudding, silicon a
cream made on berries. In addition to tea and vodka, you can