Publication: Russian Federation : From Transition to Development, A Country Economic Memorandum for the Russian Federation
Loading...
Published
2005-03
ISSN
Date
2012-06-21
Author(s)
Editor(s)
Abstract
The purpose of this Country Economic Memorandum (CEM) is to assess the extent of structural change in the Russian Federation, and its contribution to long-term growth - a prerequisite for meeting the government's ambitious economic objectives. The report starts with the hypothesis that Russia's economy is still "in transition," with further scope to boost growth by reallocating existing resources and restructuring existing production processes. Structural change therefore is a powerful determinant of Russia's medium-term growth and long-term prospects. There are other contributors to growth, most notably, the role that high hydrocarbon prices have played in Russia's rapid recovery from the 1998 crisis. In order to separate the role of structural change from other growth determinants as clearly as possible (without denying mutual influences and feedback loops), Part B of the report analyzes the determinants of growth, other than structural change, that have been important in Russia since the crisis.
Link to Data Set
Citation
“World Bank. 2005. Russian Federation : From Transition to Development, A Country Economic Memorandum for the Russian Federation. © World Bank. http://hdl.handle.net/10986/8628 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Russian Federation - Export Diversification through Competition and Innovation : A Policy Agenda(Washington, DC, 2011-07)Russia's exports became further dominated by petroleum and natural gas over the last decade. The sector experienced double-digit annual export growth in the last decade and represented almost 65 percent of Russia's exports value in 2009 a product of higher commodity prices and higher export volumes. Export growth rates of the non-oil and gas sector were also notable. Such industries as machinery, electronics, transportation equipment and chemicals reached a combined growth rate in export value of 10 percent in the last decade. This more positive comparison, however, hides relevant structural limitations in Russia's trade performance. Moreover, Russia's revealed comparative advantage seems concentrated in the 'periphery' of the product-space map, which may limit the potential for export diversification. This includes industries such as raw materials (26 products) and forestry (11 products) out of a total of 97 identified products. (At the center of the product-space are industries such as metallurgy, vehicles, machinery, etc, in which Russia does not show comparative advantages). Such specialization is sometimes considered problematic because the capabilities developed in those sectors are not easily redeployed to other industries, hindering the process of economic diversification. Yet, several resource-rich countries have managed to expand their comparative advantages beyond the traditional, natural resource-intensive products. Russian firms are, on average, larger than the average firm in the ECA region but too few firms export. It is a well documented fact that only a minority of firms in an economy export. Economic modernization and export diversification are priorities in the Russian economic policy agenda, with several measures being undertaken in recent years to promote growth in the non-oil and gas sectors. Yet the reason why some firms succeed in breaking into foreign markets while others do not is far from fully understood. In this note, the author tries to identify the binding constraints to export diversification in Russia. Using firm-level data, the author identify which investment climate factors are affecting Russian firm's propensity of engaging in export activities. Results show that lack of competition and entrepreneurial innovation are relevant obstacles to the emergence of new, potentially exportable products.Publication Russian Economic Report, No. 25, June 2011(Washington, DC, 2011-06)Russia has seen even higher oil windfall in the past few months, which translates into likely fiscal surpluses this year and next. The government should not miss the opportunity provided by a large oil windfall to substantially improve its long-term fiscal position, further reduce inflation, and, therefore, ensure a strong basis for durable stability and healthy growth in the future. Rising domestic demand and credit activity are increasingly supporting solid growth. Overall, labor market conditions improved recently while poverty was broadly flat during and after the crisis, but unemployment and poverty in many regions remain difficult. Further reductions in poverty will require greater policy focus and persistence in implementing more effective and targeted programs, especially in the poorest regions. Two new special-topic analyses focus on export diversification in Russia, and food and energy inflation in Europe and Central Asia region. In the first, results show that productivity is the key to exports and that lack of competition and entrepreneurial innovation are relevant obstacles to the emergence of new, potentially exportable products. In the second, it is shown that food and energy prices in Russia and other countries in Europe and Central Asia are contributing significantly to consumer price inflation, complicating anti-inflation policy and poverty reduction.Publication Russian Federation - Export Diversification through Competition and Innovation : A Policy Agenda(World Bank, Washington, DC, 2013-04)Economic modernization and export diversification are priorities in the Russian economic policy agenda, with several measures undertaken in recent years to promote growth in the nonoil and gas sector. Russia's export base has narrowed substantially over the past decade. Lack of diversification cannot be pinned down to a single cause. Competition and innovation are examined in this study as key drivers of export diversification. After presenting our findings we identify some key trade policy measures that could help firms enter foreign markets and sustain current trade relationships. A comprehensive competition policy will help establish a level playing field, facilitate entry of more efficient firms, and encourage orderly exit of less efficient firms, thereby contributing to increased productivity and export propensity. The government's current initiatives to foster innovation could be strengthened through a number of specific measures focusing on commercialization of public research and development and adequate research funding. This study is organized as follows. Section two scrutinizes various dimensions of Russia's trade performance, including export diversification, sophistication, and survival. A detailed analysis of the role of exports, innovation, productivity, and competition on firm performance is presented in section three. Section four analyzes the competition environment in Russia, by presenting analyses of price-cost margins, state ownership, and regional and sectorial characteristics of competition, while Section five provides an overview of Russia's innovation system and measures to increase the impact of research and development on the economy. Section six concludes and presents policy options.Publication Jamaica - Country Economic Memorandum : Unlocking Growth(World Bank, 2011-05-26)The objective of this report is to identify the main obstacles to longer term growth in Jamaica. The report takes a holistic approach, examining a large set of economic and social factors that may be hindering growth and filtering them through a growth diagnostic analysis to narrow the focus to those that constrain growth the most. Building on the results of the growth diagnostic analysis, the report then discusses each key obstacle and identifies possible reform scenarios to unlock growth in Jamaica. The report also examines how the country might further accelerate growth through private sector development. This Country Economic Memorandum assesses the key causes that have stalled Jamaica's economy over the past four decades and presents recommendations to unlock its growth potential. There is a basis for optimism in that Jamaica has had political stability, high rates of private investment, significant reduction of poverty in rural and urban areas, and improved income distribution. Nonetheless, this report shows that, since independence in 1962, long-term economic growth has been disappointing and underperformed most other countries. The findings of this study indicate that Jamaica's disappointing economic performance is traceable to low productivity caused by (i) deficiencies in human capital and entrepreneurship that are due to high migration rates and to deficiencies in the quality of education and training offered to the labor force, among other factors, (ii) a high rate of crime, and (iii) distortionary tax incentives combined with 'enclave' development that does not spill over to the rest of the economy.Publication Belarus Country Economic Memorandum : Eeconomic Transformation for Growth(Washington, DC, 2012-04-05)The last decade in Belarus was marked by an average economic growth rate of close to 8 percent annually and an impressive eight-fold reduction in poverty. Economic growth was initially driven by external factors, but after 2005 expansionary domestic demand became the prevalent contributor to growth. Growth was backed by large state support to the economy, sizeable public investments, and huge expansion of credit, particularly under government directed lending programs. Simultaneously, the external balance shifted from a surplus of 1.4 percent of growth development product (GDP) in 2005 to a deficit of 15.0 percent of GDP in 2010. Throughout the period 2001-10, the economic model relied on underpriced energy resources from Russia, with an annual average size of the imputed subsidy of over 13 percent of GDP. However, the existing growth model has reached its limits and cannot ensure growth sustainability without structural reforms. Going forward, the growth model will have to rely on significant productivity gains driven by structural reforms in an environment of macroeconomic stability. Macroeconomic adjustment which effectively combats the sources of external imbalances in Belarus is a critical and necessary, but insufficient condition for achieving sustainable economic growth in the medium term. The Belarusian economy is facing formidable challenges beyond the macroeconomic issue of adequately financing its external imbalances: (1) how to reallocate labor and capital to high productivity segments of the economy; (2) how to restructure the state-owned enterprise sector; and (3) how to support the underdeveloped private sector and the services sector. By successfully overcoming these challenges, Belarus will revive its competitive segments of the economy and discover untapped opportunities for growth. It will also diminish its economic dependence on underpriced energy from Russia and move up the value chain in global integration. With valuable geographical location and an educated and disciplined labor force, Belarus can restructure its economy, diversify its exports, and increase the prosperity of its people.
Users also downloaded
Showing related downloaded files
Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication International Debt Statistics 2015(Washington, DC: World Bank, 2015)International Debt Statistics (IDS) 2015 is a continuation of the World Bank’s Global Development Finance publication, Volume II (1997 through 2009) and the earlier World Debt Tables (1973 through 1996). IDS 2015 provides statistical tables showing the external debt of 128 developing countries that report public and publicly guaranteed external debt to the World Bank’s Debtor Reporting System (DRS). It also includes tables of key debt ratios for individual reporting countries and the composition of external debt stocks and flows for individual reporting countries and regional and income groups along with some graphical presentations. IDS 2015 draws on a database maintained by the World Bank External Debt (WBXD) system. Longer time series and more detailed data are available from the World Bank open databases, which contain more than 200 time series indicators covering the years 1970 to 2012 for most reporting countries as well as pipeline data for scheduled debt service payments on existing commitments to 2019. In addition, IDS will showcase the broader spectrum of debt data collected and compiled by the World Bank. These include the high frequency, quarterly external debt database (QEDS) and the quarterly public sector database (QPSD) developed in partnership with the International Monetary Fund and launched by the World Bank. International Debt Statistics 2015 is unique in its coverage of the important trends and issues fundamental to the financing of the developing world. This report is an indispensable resource for governments, economists, investors, financial consultants, academics, bankers and the entire development community.Publication Taxes, Spending, and Equity: International Patterns and Lessons for Developing Countries(Washington, DC: World Bank, 2025-11-17)Taxes and public spending underpin the basic administration of government and finance the human capital and infrastructure investments needed for economic growth. They can also have a significant and immediate impact on poverty and inequality. The question of how public finance can support longer-term growth objectives while promoting equity has become even more important in recent years, given the high fiscal deficits and debt levels most countries emerged with in the aftermath of the COVID-19 pandemic. These included the increasing cost of debt and the need to restart environmentally sustainable growth while helping households address the learning losses and other social scars caused by the pandemic. This paper examines the global evidence on which households pay which taxes and who benefits from what spending, and critically, the net effect on different households across the income distribution. The aim is to identify the patterns and lessons that emerge for designing progressive fiscal policies. A global dataset of 96 countries is assembled, spanning all regions of the world and all national income levels, grounded in the Commitment to Equity (CEQ) approach to fiscal incidence.Publication Building Better Formal TVET Systems(Washington D.C., Paris, Geneva: The World Bank, UNESCO, and ILO, 2023-07-25)Reform of formal technical and vocational education and training (TVET) is urgently needed in most low- and middle-income countries. Demographic trends, coupled with higher rates of students completing lower levels of education, can lead to an exponential increase in the number of secondary TVET students in the next 20 years, particularly in low-income countries (LICs). However, there are significant risks attached to expanding a system that is often considered a second-tier educational track and to which challenged learners are often directed. Because of a broken link between TVET systems and labor markets in low- and middle-income countries (LICs and MICs, together: L/MICs), TVET cannot deliver on its promise. The urgency is compounded by megatrends associated with globalization, technological progress, demographic transformation, and climate change, which affect both skills demand and the distribution of economic opportunities. This report offers guidance to policymakers designing and implementing TVET reforms, emphasizing core principles and practical considerations for L/MICs. There is much to be learned from recent L/MIC reform experiences like those in Bangladesh, El Salvador, and Mongolia, about identifying effective reform strategies and the likely impact of megatrends on future demand for TVET. The report focuses on secondary and post-secondary non-tertiary formal TVET, defined as TVET obtained within the formal education system that leads to diplomas, degrees, or other formal certifications. This overview, summarizing the main messages from the report, has three parts. The first, the TVET Promise, looks at the potential of TVET systems to deliver access to equitable, quality, and relevant training and contribute to employment and productivity. The second, the TVET Challenge, articulates the main limitations in practice for L/MIC TVET systems. The third, the Way Forward to Better TVET, proposes three interrelated transformations (three E’s) and six policy priorities to help TVET deliver on its promise in L/MICs.Publication Colombia : Essays on Conflict, Peace, and Development(Washington, DC: World Bank, 2000)A purpose of this book is to present recent World Bank analytical work on the causes of violence and conflict in Colombia, highlighting pilot lending programs oriented to promote peace and development. The Bank's international experiences in post-conflict situations in different countries and their relevance for Colombia are also examined in this volume. The identification of socio-economic determinants of conflict, violence, and reforms for peace came about as a key element of the Bank's assistance strategy for Colombia, defined in conjunction with government authorities and representatives of civil society. This report is organized as follows: After the introductory chapter, Chapter 2 provides a conceptual framework for understanding a broad spectrum of political, economic, and social violence issues; identifies the role played by both the country's history and the unequal access to economic and political power in the outbreak and resilience of political violence; and examines as costs of violence the adverse impact on Colombia's physical, natural, human, and social capital. Chapter 3 analyzes the costs of achieving peace and its fiscal implications; and indicates that exclusion and inequality rather than poverty as the main determinants of violence and armed conflict. Chapter 4 reviews the Bank's experience in assisting countries that are experiencing, or have already overcome, domestic armed conflict. The authors illustrate the relevance of these cases for Colombia.