Globalization in Russia: The challenge of the transition to the world economy

Micha K.

Order the writing of a tailor-made Economy general Essay

Free quote online

Essay Format .pdf

Globalization in Russia: The challenge of the transition to the world economy

Download

Read an extract

Reader
Abstract
Contents
Extract

Abstract

Fifteen years ago, the Soviet Union was a socialist authoritative country, tightly isolated from
capitalist countries. Nowadays, its direct heir, Russia, is one of the most quickly growing markets of
the world, strongly open on the global economy.
During the 1990s, Russia underwent an extraordinary transformation from a communist dictatorship to a multi-party democracy, from a centrally planned system to a market economy, and from a belligerent enemy of the West to a cooperative partner. This change was as unexpected as exceptional: two decades ago, only an idealist would have imagined the “evil empire” to transform so quickly and peacefully into a democratic and capitalist ally of the West.

The unprecedented nature of this switch raises the question of the role of globalisation in Russian
transition to market economy. The process of globalisation can be understood as the interplay of
technological, economic, and political changes, leading to new patterns of trade and investment in the
world. As the British-born sociologist Michael Mann puts it, “the term of ‘globalisation' refers to the
extension of social and economic relations over the globe”. The whole planet becomes embroiled in a
single set of social and economic relations.
How globalisation fastened the transformation of Russian economic system? What have been the
consequences of this process? What relationship has Russia today with global economy? These are the
main issues of this study.

After sixty years of self-sustaining socialism, the Russian entry to this global phenomenon was doubtlessly difficult. The post communist transition transformed not only the country's economic and
political systems but also the state-society articulation at large. If the disappointing economic results of the first decade of transformation are often understood as results of Russia's opening in the context of globalisation, it also seems that it is globalisation itself which enabled the Russian recent growth. Beyond this debate, the current Russian position as regards the global system has also raised to a major issue.

From transition to crisis: the difficult adaptation to the global economy
1. The evolution of Russian economy in the 1990s
2. The 1998 financial crisis and the ambiguous role of the IMF: how globalisation failed in Russia
3. Globalisation's costs
The post-crisis growth : how globalisation is building Russian power
1. Russia's economic transformation
2. Moscow, the birth of a global city
3. Russian success in the world economy
Current Russian ambiguities as regards globalisation
1. From WTO to Gazprom monopoly : Russia's contradictory globalization path
2. Russian inclination to anti-globalisation populism
3. The shadow of Russian globalisation fears
Conclusion
References

Get this table of contents for free after login.

Extract

[...] The first decade of reform saw the nation losing 54 percent of is gross domestic product and 60 percent of its industrial capacity, more than twice the loss that the USSR suffered in World War II. Moreover, it will take Russia's economy at least a decade to get back to where it was when communism collapsed. Russia has been integrated into global capitalism as a kind of neo-colony, producing cheap fuels and raw materials and importing manufactured goods and foodstuffs while domestic production languished, unable to compete with its archaic technology. [...]

[...] The 1998 financial crisis witnessed the difficulty of the integration to the world economy after seven decades of self-sufficiency. But this crisis also enabled to clear Russian economy from its growing pains. Some globalisation effects like international trade and especially the high demand of raw materials on the world market gave the opportunity to Russia to build a strong growth. Since this reversal, Russian participation in globalisation is deepening at an impressive rate. Its recent accession to WTO, the active Russian invests abroad, and its new role of major international energy supply let imagine that Russian role on the international scene is set to grow significantly. [...]

[...] The 1998 financial crisis and the ambiguous role of the IMF: how globalisation failed in Russia In 1997 Russia could give the impression to be about to complete its transition thanks to numerous privatisations and a low inflation. The 1998 crisis revealed however that the country was far from a successful change to the market economy. The absence of a real industrial reorganization and the strong dependence towards oil were severely sanctioned. This crisis caused a shock-wave through financial markets and showed how difficult the transition to the world economy was difficult for an ex-socialist country. [...]

[...] After one decade of transition towards the world economy, Russia seems today to have found its place in the international system. Indeed, its constant aspiration since 1992 has been to have a foreground place on the international scene, as an heir of the USSR or by joining the economic organizations where the USSR did not sit. Russia is a permanent member of the Security Council of the UN. It is also member of G8 and of the Paris Club as creditor country. [...]

[...] Russian success in the world economy Because of its isolation from international markets, USSR experienced a price structure which was very different from world prices. In 1988, a ton of oil was worth 30 roubles and a ton of corn 170 roubles, whereas international prices were respectively 170 and 250 dollars. This example shows how fussy was the integration of this ex-socialist country to the world economy. In 1992, Russian government was constrained to introduce a very liberal system as regards foreign trade in order to reduce shortages. [...]

pdf