With the breakup of the Soviet Union, there has been considerable interest in the future of the Russian Republic. Composed of the greater part of the Soviet Union, and headed by an embattled Boris Yeltsin, this republic has received the bulk of the world's attention and assistance as the former Soviet republics try to build new economies. Much has been made of the Russian republic's attempts at capitalism, which has been accompanied by a significant increase in the level of organized crime and by an increase not only of middle class citizens, but also of those who fall below the poverty line. This research examines the current state of economic development in Russia and considers the nation's future direction.
Gross Domestic Product and the New Independent States
The stress of moving from a centrally planned economy to a free market has proven difficult, but not impossible, for Russia. The country has established new ties in the world economy while maintaining links to traditional trading partners, although in a more limited capacity than in years past. Russia is responsible for more than one-half of the population of the New Independent States (NIS), a coalition of members of the former Soviet Union, and accounts for more than 60 percent of the gross domestic product (GDP) of the NIS.
Russia's own GDP fell approximately 38.5 percent between 1992 and 1997, although these official statistics may not reflect significant activity in the black market. Analysts calculate that although the magnitude of the decline may be in question, there is little question that the nation's economy is on a downward trend. Unemployment was 9.3 percent of the nation's workforce during 1996, but this figure is calculated to underestimate true unemployment because it does not take into account those workers who are employed only part-time or those workers on voluntary leave.
Russia has a considerable supply of natural resources, with high ...