Standard & Poor’s has analysed the contemporary condition of the Russian economy to find that its gross domestic product has grown threefold over the past five years. Russia ranks as the tenth biggest economy of this planet and may rise to an even higher position within the next couple of years. Standard & Poor’s explains the notable growth of the past five years by the skyrocketing prices for raw materials, especially by the rise in oil and gas prices. Oil and natural gas make up 60 percent of Russian exports. The growth of prices for raw materials prompts a transfer of money from the pockets of buyers to the coffers of sellers. Russia is a seller in this transaction, and knowledgeable people refuse to see profit growth as a negative thing.
What the problem boils down to is “how do we spend this money?” The money may be invested in highly effective ventures that tend to boost production, or spent for unproductive projects that send inflation up. The man who heads the Russian Association of Privately-owned Businesses, Grigori Tomchin, agrees. “The size of an economy is not the most important thing, but, it is a necessary condition for the development of a nation. See for yourselves… an economy may owe its growth to one single industry, but, that will hardly improve the general welfare of the society. It takes balanced development to put an economy face to face with society and make it grow in its best interests. Efforts in economic diversification, concentration on infrastructure such as roads, power plants, and public services, make it possible to channel economic development into the enhancement of human life. Then, it shall be possible to speak of the wise investment of what we earned on the world market and the favourable conditions in it”.
Diversification and a developed infrastructure are strategic objectives of government programmes for the next few years. In efforts to meet these objectives, Russia is likely to invest what it earns on the raw materials market. Economic growth makes Russia all the more attractive in the eyes of foreign investors. The KPMG consulting company polled 311 managing officers of the biggest business companies of half a hundred nations. They said that it shall take Russia five to six years to win one of the first three positions on the investors’ list of most attractive nations.
18 June 2008
Voice of Russia World Service
http://www.ruvr.ru/main.php?lng=eng&q=28550&cid=57&p=18.06.2008 (in English)
