Russia's Economic Revitalization And Risks In The Period Of Putin

Russia implemented the"Shock Therapy"in early 1990s in order to make transition to free market economy. From 1991 to 1996, Russia suffered from continuous negative growth. In 1998, affecting by the financial crisis in Northeast Asia, Russia broke out the first financial crisis in transition countries. The financial crisis caused large damage, but on the other side, economic order was re-adjusted either. Vladimir Putin became Russian president in 2000 and implemented strategies for economic revitalization. Putin has taken a series of strong measures to stabilize the regime, increase the state's economy, regulation and control. Putin's reign coincided with the international market with high energy prices. By exporting energy products, Russia kept a record of 7 years of rapid economic growth, with GDP average annual growth rate of 7%. Putin took office for eight years, in this period, Russia draw lessons from the 1998 financial crisis, relying on oil and gas exports and accumulated nearly 600 billion U.S. dollars of foreign exchange reserves, nearly 200 billion U.S. dollars of the stabilization fund. However, in August 2008 by the U.S. sub-prime mortgage crisis, the Russian stock market and foreign exchange markets went down, with a large number of foreign capital flight. The Russian financial system was shocked heavily. In the same time, the international oil prices went down sharply, which had strong impacts on Russia's real economy. This dissertation looked into Putin's strategy for economic revitalization and economic growth, analyzed Russia's economic growth and associated economic risks. The conclusions of this dissertation have theoretical and practical significance for the transition countries to avoid risks and safeguard national economic security.The first chapter is Introduction. This chapter contains the introduction of theoretical and practical significance of the topic; relevant literature review and evaluation; the overall structure and researching methods; innovations and shortcomings.The second Chapter is economic restructuring and crisis in 1990s. From the perspective of the economic crisis, recalling the formation of the Soviet planned economy, development, reform and failures. Highly centralized planned economic system was a failure. And it led to recession in economic crisis."Shock therapy"is assumed the important task of restructuring the Russian economy, while filling Russia to pay a heavy price."Shock therapy"barely completed its economic restructuring, but was unable to counter the crisis. In the end, Russia first broke out the international financial crisis in 1998, which is the first comprehensive financial crisis among transition countries. From a theoretical perspective, this chapter of Marxist economics and western economics theories relating to a planned economy to compare the Soviet planned economy system failed to explain the facts that highly centralized economic system was difficult to sustain the planned economic system. Similarly, the full use of the Western neo-liberal or monetary theory can not make Russia complete the transition process by one step, and the failure of"shock therapy"illustrates this point vividly.The third chapter is Putin's economic revitalization strategy. In the period of Vladimir Putin, Russia has basically completed the layout of energy development and export strategy. The re-nationalization strategy let the government get control of the strategic important energy enterprises again. A group of international influence and competitiveness of the energy companies was formed, and it becomes Russia's economic growth source of inspiration. Transformation of crisis and Russian economic security awareness has been improved significantly in the economic growth process. But Russia's economic growth, which has excessive reliance on energy exports, and plans to energy exports access to innovative economic development, is still highly fragile. It finally has to rely on international oil prices, which led to the hanging of the entire economy in the manipulation by the international speculative capital.The fourth chapter is the analysis of the Russian economic risks. In August 2008, the U.S. sub-prime crisis broke out. Foreign capital began to leave the Russian capital market, triggering the Russian stock market volatility. However, the Russian stock market capitalization is small, not enough to trigger a systemic financial crisis. Coupled with Russian President Vladimir Putin learned the lessons of the 1998 financial crisis, the use of the favorable opportunity of high oil prices have accumulated huge foreign exchange reserves and stabilization funds, forming an economic"stabilizer"and"airbag". Therefore, the financial system is relatively stable. But along with the sub-prime crisis, the international oil price began to plunge, foreign exchange earnings dropped sharply, the ruble exchange rate plummeted, energy-dependent economy suffered a serious setback. In recent years, the Russian government accumulated too much foreign exchange earnings and led to the relative lack of enterprise funds. After the outbreak of the financial crisis, the risk of corporate debt increased rapidly, and strategic corporate shares were acquired by foreign encroachment.The fifth chapter is Russia's future economic development strategy. Financial crisis has devastating impacts on the Russian economy. Putin's government was forced to re-speed economic development ideas. Although the new ideas of development were started from the anti-crisis, it still shows that Russia is remodeling its superpower ambitions. Energy remains the main driver of economic growth in Russia. Restart the privatization process, enhance the vitality of small and medium enterprises in order to share strategies for attracting foreign investment, and reduce the risk of corporate debt to safeguard national economic security. Innovation economy is the driving force for Russia's future economic growth, for which the Russian government issued a long-term development strategy, the development of human capital, raise the country's innovation capability, and build a new economic system.The sixth chapter is conclusion. In 1998 and 2008, Russia has experienced two financial crises, whether in the recession phase or rapid economic growth stage, the financial crisis fully exposed the economic transformation of the unique vulnerability. However, looking back at the history of world economic development, whether developed or emerging market economies, market economy countries, any economic risks and crises can not hinder economic development forward. It is an inexorable law of economic development. Russia is bound to comply with this law. Two financial crises has made Russia a clear understanding that only by taking the road of innovation that the economy can truly transform from economic recovery to economic revitalization. Only by getting rid of energy-dependent economy, industrial structure adjustment, improve industrial competitiveness, it can eliminate a number of economic risks. Russia has to innovate economy, resources, technology, and infrastructure advantage. While in the process, there is still the risk of potential development, and energy-dependent. It is hard to eliminate short-term economic risks. Political risks, socio-economic risk and external risks will always be accompanied by Russia's economic revival. Russia has to maximize the economic advantages and gradually resolve the risk, and this is the only way to development.