FINANCIAL ANALYSIS
Main Principles Have Been Identified, But Progress Is Slow
Drifting or planning? One of the criticisms levied at Russia is that it remains far too dependent on and, therefore, vulnerable to earnings from commodities. Critics say the government has either been far too complacent about the need to reform the economy or has been regularly distracted from efforts to do so. This view has and continues to affect how both portfolio and strategic investors view Russia’s risk and opportunity, and it is one of the main reasons why foreign investment flows have remained at a low level.
Following the experiences of other countries. But the evidence is that, even from the early days of Vladimir Putin’s presidency, there existed at least a broad outline of a long-term development plan (see below for description) to transform the economy from its dependency on natural resources to one with a better range of drivers, where the risk of the sort of boom-to-bust cycle experienced recently is substantially reduced. In critical areas, the development plan for Russia differs very little from those of other nations, which have successfully transformed their economies. Examples such as Chile and Malaysia come to mind. In each case, it also took about twenty to twenty-five years to end up with a restructured economy.
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