After the dissolution of Soviet Union, the Russian Federation came to existence as an independent country. The Russian economy was once considered as one of the powerful economies of the world but after the dissolution of Soviet Union the economy suffered a setback.

The Russian Federation is rich in natural resources and the growing world demand for these resources has facilitated the faster recovery. Major products include petroleum, natural gas, timber, furs and precious and nonferrous metals.

Russia is a major exporter of oil and natural gas and its economic growth over the past decade has been driven primarily by energy exports. The country has current account surplus because of the petrodollars. After the downturn of the world economies followed the decrease of the oil prices and less demand which has affected the GDP of Russia by a sizeable extent.

For the first quarter of 2010, the GDP at current prices was RUB 9,862 billion.

(Source: Ministry of Finance, National Statistics)

(Source: National Statistics)

From 1995 to 2008 the Russian GDP grew steadily to reach RUB 41,445 billion in 2008 after which the growth was affected due to the global slowdown, As a result, in 2009 Russia registered its GDP at RUB 39,064 billion which was a decrease over the previous year.

The GDP growth rate at constant price was 5.2% in Q2 2010.

(Source: Central Bank of Russia)

Gross national income (GNI) per capita, PPP

The GNI per capita at PPP in 2010 amounted to USD 15,258 as compared to USD 12,523 in 2005.

(Source: UNDP)

Foreign trade of Russian Federation

The exports in Russian Federation has significantly increased from USD 135.9 billion in 2003 to reach USD 304.0 billion in 2009.

(Source: National Statistics)

Individual income

Income tax on Individual incomes (Residents) in Russian Federation is taxed at a uniform rate of 13%.  Non Residents are required to pay taxes at the rate of 30%.

Corporate tax

The standard rate of corporate profit tax is 20%.

(Source: Worldwidetax)

Inflation rate

Inflation rate for the year 2009 was recorded at 11.7%, which declined from 14.1% in 2008.

(Source: World Bank)

FDI inflow

In 2009, total inflow of foreign investment amounted to USD 81,927 million of which USD 15,906 million was in the form of Foreign Direct Investment (FDI).

Luxembourg and Netherlands were the major investors in the country, contributing about 14.3% and 14.2% of the total inflows respectively.

(Source: National Statistics)

Portfolio investments

In 2009, portfolio investments in the country amounted to USD 882 million as compared to USD 1,415 million in 2008. The portfolio investments in 2009 were 1.1% of the total foreign investment inflows in the country.

(Source: National Statistics)

Banking sector assets

The table below displays the assets of the Central Bank of Russia.

Currency Unit: RUB

(Source: CentralBank of Russia)

Consumer Price Index

(Source: CentralBank of Russia)

The consumer price index in 2010 was 106.9 as compared to 111.7 in the year 2009. The consumer price index reflects a decline in the prices of goods and services in the country.

Interest rates on saving deposits / time deposits

The interest rate as of November 2010 was 2.50% on demand deposits.

(Source: Central Bank of Russia)

Money supply

Source: (National Statistics)

Government expenditure

Government expenditure of the Russian Federation exceeded revenues in 2009. In the same year, government expenditure amounted to RUB 16,048.3 billion.

(Source: National Statistics)

External debt of Russian Federation

The external debt in 2010 was USD 471.6 billion which decreased marginally from 479.4 billion in 2009.

(Source: Central Bank of Russia)

Official exchange rate

RUB/USD rate for November, 2010 was registered at 31.3061.

(Source: Central Bank of Russia)

Government finances

Fiscal balance

In 2009, the fiscal balance of the general government was RUB 2,407.8 billion.

(Source: Ministry of Finance)

Total revenue

Total revenues of Russia Federation for the year 2009 amounted to RUB 13,599.7 billion which was 34.8% of GDP.

(Source: National Statistics)

Tax revenue

For the year 2009 the total tax revenue was RUB 5,907.9 billion.

(Source: Ministry of Finance)

Current account balance

In 2009, the current account surplus was USD 48,971 million as compared to the surplus of USD 102,400 million in 2008. For the first three quarters of 2010, the current account surplus amounted to USD 58,338 million.

(Source: Central Bank of Russia)

Balance of payments

(Source: Central Bank of Russia)

Labour force in Russia was recorded at 75.52 million people in 2009, of which females accounted for about 37.02 million of the total labour force in 2009 and males accounted for 38.50 million. The total labour force participation rate in Russia was 63% for the year 2008.

Unemployment was highest in the age group 20-24 years with 21.8%.

The unemployment rate in Q3 2010 was 6.8% which decreased from 7.8% in the corresponding quarter of the previous year.

(Source: National Statistics, National Statistics )

Minimum wage

The minimum wage in Russia was RUB 4,330 per month in 2009.

(Source: National Statistics)

Level of unionisation

The major trade unions in Russia include:

·         Federation of Independent Trade Unions of Russia (FNPR)

·         All-Russian Confederation of Labour (VKT)

·         Confederation of Labour of Russia (KTR)

·         Trade Union Association of Russia (SOTSPROF)

The Federation of Independent Trade Unions of Russia is the largest trade union in Russia and has about 28 million members.

(Source: fedee.com)

Russia follows a federal republic system of government. All governing powers are vested in president of the Russian federation, Federal Assembly (the Council of the Federation and the State Duma), the Government of the Russian Federation, and the courts.

The President is the head of the state and is elected for a term of six years on the basis of universal and direct suffrage by secret ballot. The current president is Mr. Dmitry Medvedev and the prime minister is Mr. Vladimir Putin.

The Parliament of the Russian Federation is a representative and legislative body of the Russian Federation and is composed of two chambers - the Council of the Federation and the State Duma.

The State Duma is comprised of 450 statutory members, who are directly elected for a term of four years. The Council of the Federation includes 178 members appointed by the legislative bodies of various regions of the country.

(Source: National Statistics, IPU)

The major political parties in the Russian Federation include:

·         United Russia

·         Communist Party

·         Liberal Democratic Party of Russia (Zhirinovsky)

·         A Just Russia

The last Duma elections were held on December 2007 and Presidential elections were held on March 2008.

Regulatory Environment in Russia

The country’s economic freedom score is 50.0, making its economy the 143^rd freest in the 2011 Index of Economic Freedom. Russia ranks 41^st out of 43 regional countries in the European region. Russia’s’ overall score is lower than the global and regional averages.

(Source:Heritage.org)

Corruption perception

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Russia is ranked 154^th on this list which indicates that the corruption levels in the public departments in the country is very high.

(Source:transparency.org)

Freedom of information

Media in Russia is restricted. The Russian television is dominated by state run channels or owned by companies with close links to the Kremlin. The government directly or indirectly controls major television channels.

Russian journalists face the risk of being attacked if they cover sensitive subjects such as corruption or organised crimes.

(Source: BBC)

Russia is ranked 140^th in the world Press Freedom Index 2010 with a score of 49.90 which indicates that media in Russia is restricted. (Source: rsf.org)

Newspapers

The most circulated newspapers include:

·         Komsomolskaya Pravda

·         Kommersant

·         Moskovsky Komsomolets

·         Izvestia

·         Rossiyskaya Gazeta

·         Nezavisimaya Gazeta

·         Trud

·         Argumenty i Fakty

·         Novaya Gazeta

·         The Moscow Times

·         The Moscow News

(Source: BBC)

Judicial system

The law governing the Principles of Russian courts is the 1996 ‘Federal Constitutional law’. Under this system, the residents as well as foreign nationals enjoy the same rights.

The judicial system has several types of courts:

·         Constitutional Court

·         Civil courts

·         Arbitrazh courts

·         Justices of the peace and

·         Military tribunals

The Constitutional Court operates on the basis of the country’s constitution. It adjudicates in cases dealing with the country’s laws, interpretation of the constitution and other related matters.

Civil courts hear matters related to criminal cases, labour and employment cases, family and consumer protection cases. The Supreme Court of the Russian Federation is the highest authority in the judiciary for civil, criminal, administrative, and other cases.

Arbitrazh courts are specialised courts in the judiciary system for settling property and commercial disputes between companies and entrepreneurs. Arbitrazh courts are organised into a three tier system. The first tier includes 80 courts in various regions of the country and act as courts of first instance. The second tier includes 10 courts with responsibility for a broad territory and deal with cassational appeals of the lower court decisions. The Higher Arbitrazh Court is the highest court in the three tier system.

(Source: ruscham)

The total population of Russia for the year 2010 was 141.9 million, which has remained unchanged from the previous year.

The country’s population is on the decline. From a population of 147 million in 1989, the country’s population declined to 141.9 million in 2010. The decline in population is the result of low birth rates and high mortality rates.

(Source: National Statistics)

The gender ratio in the country is unbalanced i.e. there are about 85.9 men for every 100 women in the country.

 (Source: UN)

The total population below (working age) i.e.16 years of age in the country is 15.9% of the total population, 62.9% people come under the category of working age, and over working age category had 21.2% of the total population for the year 2009.

(Source: National Statistics)

The life expectancy at birth for males is 61.8 years and for females is 74.2 years and average life expectancy was 67.9 years (2008). This disparity in life expectancy between male and females is the result of the deaths caused by smoking and drinking habits in the male population.

(Source: National Statistics)

Total deaths recorded were 1,420 people per (100,000) in 2009, of which diseases related to circulatory system and neoplasm were the major cause of death. The total birth rate was recorded at (12 per 1,000). The mortality rate of infants (per 1,000 live births) was registered at 11 in the year 2009.

(Source: National Statistics, World Bank)

Total foreign arrivals to the Russian federation for the year 2009 were 279,907 individuals. The number of migrants arriving in the country decreased over the previous year when it recorded 281,614 individuals.

Total departures from the Russian federation in 2009 were 32,458 people which showed decrease from 39,508 which was recorded in 2008.

(Source: National Statistics)

The latest figures reveal that urban population in the country declined at an annual rate of 0.6% between 2005 and 2010. For the same period, the rural population declined at a rate of 0.4% per year. The percentage of urban and rural population has remained unchanged in the last two decades. 73% of the country’s population lives in urban areas and the remaining 27% in rural areas.

 (Source: National Statistics)

Ethnic groups in Russia include:

·         Russian - 79.8%

·         Tatar - 3.8%

·         Ukrainian - 2%

·         Bashkir - 1.2%

·         Chuvash - 1.1%

·         Other or unspecified - 12.1%

 (Source: info please)

The country ranks 65^th out of 169 countries on the Human Development index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

Education

The country’s literacy rate for the period 2003 – 2008 is estimated at 100%.

(Source: UNICEF)

Before the dissolution of the Soviet Union, the country followed the soviet system of education which had a uniform and centralised approach throughout the Union. After dissolution, the Russian Federation made reforms in the system particularly in higher education.

The country has a high quality education system and is considered among the best mass education systems in the world.

The basic education up to 9 years is compulsory. The education system in Russia is divided in two broad categories general education and professional education.

Basic Education includes:

·         pre-school education

·         primary general education

·         basic general education

·         secondary (complete) general education

Professional education covers:

·         vocational education

·         non-university level higher education

·         university level higher education

·         doctoral study programmes

·         upgrading, retraining and other lifelong learning

(Source: euro education, Study Russian)

Health care

Health care in the country is given priority because of the demographic crisis. The last decade saw life expectancy falling from 70 years to 65 years. The average life expectancy of men is 14 years lesser than their female counterpart. Major causes of death are diseases of the circulatory system followed by deaths from neoplasm and accidents, poisonings and injuries.

(Source: National Statistics)

According to data from the World Bank, the total expenditure on health care as % of GDP was 5.2% in 2008.

(Source: World Bank)

Russia, being the world's largest country, has a vast network of railways, highways and subways. Major cities have a well developed infrastructure and people prefer roadways for city commuting.

The transport system is dominated by railways. Because the country is rich in natural resources and the vast nature of the country, there is a requirement for developed railways system. The country has the second largest rail network in the world with about 85,000 km of track. Of the total rail tracks in the country, about 43,000 km are electrified. The railways carry over 1.1 billion passengers and more than 1.1 tonnes of freight annually. Russian railways has 43% share of the Russia’s total freight traffic and more than 41% of total passenger traffic.

(Source: Russian railways)

Large cities like Moscow, St Petersburg, Nizhny Novgorod, Novosibirsk, Samara, Yekaterinburg and Kazan have a well developed metro system which is the easiest mode for city commuting.

Ports:

Some of the major ports in Russia are listed below:

(Source:world port source)

Airports:

Russia has more than 1,000 airports. Domodedovo International Airport is the largest in terms of passenger and cargo traffic.

(Source: Air charter world)

Telecommunications networks

As of June 2010, 59.7 million people i.e. 42.8% of the total population use internet services. In 2009, the country had 45.25 million internet users or 32.3% of the total population. 

(Source:internetworldstats.com)