Problems and prospects of economic development in Russia

Along with privatization, some industries require de-monopolization and internal restructuring. For example, natural gas production should be separated from transmission and retail distribution networks.Second, improving the business and investment climate requires far-reaching institutional and political reforms. For example, strengthening property rights and contract enforcement will be impossible without genuine independence of the judiciary. Fighting corruption and business extortion will be impossible without democratic oversight of public administration, law enforcement and public security agencies, and without media freedom. Third, deeper integration of Russia in the global economy must go beyond the strengthening of trade relationships in their narrow sense (although this is also important). It requires far-reaching economic and technological partnerships and cooperation with leading advanced economies, including the EU and the US.Furthermore, the future economic development of Russia will depend, to a great degree, on global economic growth and the stability of international commodity and financial markets. In other words, Russia should be an active player in defending the global liberal economic order and in strengthening it through relevant reforms. Fourth, closer economic and political cooperation with the European Union and the United States and conflict resolution in its neighbourhood would allow Russia to shift part of its budget resources that are currently targeted at military and security spending to infrastructure, education, research and public health programmes.Fifth, political reforms and better guarantees of civil liberties can help increase economic freedom, innovation and business initiative. Overall, given Russia’s increasing labour-supply constraints, the development of innovative business activity and high-value added manufacturing and services is the only realistic long-term strategy that would enable an upper-middle-income economy such as Russia to diversify away from the hydrocarbon monoculture.4. CONCLUSIONThe purpose of this work was to analyze the problems and prospects of economic development in Russia.The objectives of the work were to give an overview of Russian economy, analyze main problems of the Russian economy and key prospects of economic development in Russia.The economy of Russia is an upper-middle income mixed and transition economy. It is the fifth-largest national economy in Europe, the eleventh-largest nominal GDP in the world, and the sixth-largest by purchasing power parity. The basis of the Russian economy is the extraction, processing and export of various types of mineral raw materials: oil and natural gas, coal, iron ore, apatites, potassium salts, phosphorites, diamonds, gold, silver, nickel, platinum, copper, etc.Russia is not only one of the world's leading producers of oil and natural gas, it is also a top exporter of metals such as steel and primary aluminum.Rich natural resources provide a sufficient standard of living for the population, but an economy dominated by large and inefficient state-owned enterprises lacks competitiveness and innovation. Russia has few high- tech exports, and the standard of living is significantly lower than that of more developed Western economies. A poor economic performance is more related to long-term internal problems, including a lack of competitive markets, low levels of investment, lack of innovation, and excessive dependence on natural resources.It is necessary to improve the investment climate, including strengthening property rights and contract enforcement, and reducing burdensome business and licensing standards that negatively affect foreign investment. It will also be useful for the Russian economyto invest in infrastructure for providing better access to external markets; to make the product market more efficient, for example, by simplifying customs procedures;to strengthen trade relations outside of Russia's neighboring countries; to allocate more resources to research and development.In the short and medium term, the Russian economy is likely to experience a recession. The decline in its revenues will affect trade relations with other countries, and the ruble will depreciate significantly in comparison with other currencies.In addition, if global revenues from imports and tourism regress, domestic consumption will weaken as unemployment increases, and the annual growth forecast will fall to 1.5%. The biggest danger that awaits Russia is the decline in capital inflows against the background of a potential recessionary expectation. Given that Russian firms will also have difficulty borrowing against the backdrop of US sanctions, Russia will have no choice but to make concessions.ReferencesAkyıldız A. Russian economy has no other option but to make concessions URL: https://www.dailysabah.com/opinion/op-ed/russian-economy-has-no-other-option-but-to-make-concessionsAmadeo K. How Russia's Pipeline Politics Holds the EU Hostage // The Balance, July 2019. Aris B. The Russian Economy Is Stagnating. 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