Economy of Russia

The economy of Russia is the twelfth largest economy in the world by nominal value and the sixth largest by purchasing power parity (PPP). Russia’s economic power lies in its key natural resources − oil and gas. Oil and gas dominate Russian exports, so Russia remains highly dependent upon the price of energy. The energy giant Gazprom is close to the Russian state and critics say it is little more than an economic and political tool of the Kremlin.

Since the collapse of the Soviet Union in 1991, Russia has tried to develop a market economy and achieve consistent economic growth. In October 1991, Yeltsin announced that Russia would proceed with radical, market-oriented reform along the lines of " shock therapy ", as recommended by the United States and IMF. In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country. It usually also includes large scale privatization of previously public owned assets.

However, this policy resulted in economic collapse, with millions being plunged into poverty and corruption and crime spreading rapidly. Under the government’s cover, outrageous financial manipulations were performed that enriched the narrow group of individuals at key positions of the business and government mafia. Many took billions in cash and assets outside of the country in an enormous capital flight.

Russian TV is dominated by channels that are either run directly by the state or owned by companies with close links to the Kremlin. The government controls Channel One and Russia One − two of the three main federal channels − while state-controlled Gazprom owns NTV. Critics say independent reporting has suffered as a result.

The protection of property rights is still weak and the private sector remains subject to heavy state interference. During the global financial crisis, Russia experienced a severe recession, until the growth was later on stabilized.

■ Scanning

Ex. 2. Now read the article more carefully and answer the following questions:

1) According to the article, what does Russia’s economic power lie in? Why?

2) What is the energy giant Gazprom called by critics?

3) Since what time has Russia tried to develop a market economy?

4) What does the term "shock therapy" refer to in economics?

5) What is usually privatized during such reforms?

6) What were the results of the reforms in the country?

7) What happened due to outrageous financial manipulations in Russia?

8) Who are many TV channels in Russia run by? What risk does it pose to the country?

9) What is said in the article about the protection of property rights and the private sector in Russia?

Ex. 3. Now try to complete the following sentences from memory:

1) The economy of Russia is the twelfth largest economy in the world by _______ _______ and the sixth largest by _______ ________________.

2) Oil and gas dominate________________.

3) Critics say Gazprom is little more than an _______ and______________ of the Kremlin.

4) Russia has tried to develop a market economy and achieve ________ economic _______.

5) Yeltsin announced that Russia would _______ ______ radical, market-oriented reform along ____ _______ of "shock therapy".

6) However, this policy resulted in _______ _______, with millions being _______ _______ poverty and corruption and crime spreading _______.

7) Many took billions in ______ and ______ outside of the country in an enormous _______ _______.

8) During the global financial crisis, Russia experienced a ____ ___.

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