Natural Resource Endowment And Russia's Economic Growth

This paper inquired about abundant natural resource'influence on the Russian economic growth and explored the channel and means. This topic was chosen mainly because of its great theoretical and practical significance: First, the relation between the natural resources and economic growth is the focus of various countries'attention. Experts and scholars from various countries have different perspectives on the negative relation and the associated mechanism about the natural resources and economic growth. This paper took the transition countries—Russia as the research object, discussed the impact and its mechanism of the abundant natural resources on Russia economic growth in the process of transition to a market economy, which was helpful to further strengthen the comprehending the transition economic growth influence factor, and also contribute to an accurate grasp of the natural resources'role in the economic development. Second, based on the full considering the transition economic characteristics and the necessary complementary and amendment to the existing theory, the paper established a theoretical framework and model, and analyzed the natural resources'impact on Russia's economic growth and which institution played role through the analysis to Russia's resource dependent economic characteristics. This greatly expanded the fundamental research field, and overcame the limitations of the original theoretical research, which had great denotation to deepening the discipline development on the resource economics, development economics, and transition economics. Third, which can provide the theory instruction to promote China's region with abundant resource in economic development, and enhance the Sino-Russian cooperation in energy and high-tech fields, thus had great practical significance.This paper selected this subject was precisely based on the reality and fundamental research need, studied the economic growth in transition country Russia from the perspective of natural resources, and analyzed whether Russia's economic growth present a"resource curse"phenomenon, and emphasized the institute's important role.The paper is organized as follows: chapter 1 and 2 were the paper preparing, chapter 3, 4 and 5 were the focus of the research, chapter 6 was the policy recommendations, and chapter 7 gave the conclusion.Chapter 1"Introduction"indicated and explains the paper's subject, basic concepts, research methods and research framework, and pointed out paper's innovations.Chapter 2"theoretical basis and literature review"firstly sorted out the correlation theories about natural resources and economic growth, and evaluated the classical growth theory, neo-classical growth theory (exogenous growth theory), new growth theory (endogenous growth theory) and the institutional economics. Second, review were made about the relevant front literatures, including the natural resources'influence on the economic growth in a countries and regions within a country and its transmission mechanism, with special attention for the research of Russia and other countries in transition.Chapter 3"the theoretical model of the economic transition and resource curse"conducted some theoretical and empirical research on economic transition and institutional change, and proposed the theoretical analysis frame and model to explain the natural resources and economic growth in transition economies. The theoretical model indicated that the natural resource endowments have a significant impact on the economy, but this effect may come from many different sources, institutions and policies are key aspects. The good institution and correct economic policy can avoid the resource curse, on the contrary the low-quality institution and wrong macroeconomic policy will cause the country to fall into the resource course. Especially for transition economies, in the institution reconstruction process, the overlap and contradiction of the new and old systems would have various "neutral" and "cracks", together the huge economic benefits generated from the abundant resources would mitigate the pressure for reform, reduce the urgency of reform, but also generate income inequality, social tension and a variety of rent-seeking corruption. This defective institution made plenty natural resources have the negative influence to the transition economies, thus created a resource curse phenomenon.Chapter 4"the Russian economic transition and natural resources development"first evaluated the process of economic transition in Russia and its performance. In the economic transition, Russia had experienced sustained economic recession; only after 1999 the country gradually obtained the restoration. The length of the economic crisis, the extent of recessions, and total economic output reduction range was rare in history, long-term deterioration of the economic situation caused Russia's economic strength is seriously affected, and severely damaged Russia's social development; Second, analyzes the Russian natural resource endowment and the development situation. Russia is the best natural resource endowments among the world. Russia is the numerous mineral resource important producer and the exporter, occupied the important position in the world mineral resource production and the trade; Third, the Russian oil and gas sector reforms and development were summarized. In transition process, Russia also carried out resource management system reform, a large scale privatization and liberalization was carried on in the oil and gas industry. Finally conducts the research to the Russian's related policy and the international cooperation in the energy sector. "Russian Energy Strategy before 2020, the basic principle" is the Russian energy sector's guidance documents by 2020, which has the important guiding sense to the Russian natural resource sector development. Meanwhile, in order to attract foreign investment in natural resources, the Russian Federal Government issued the "Foreign Investment Law", "Mineral Resources Law", "Tax Law", " Natural Monopoly Law ", "Customs Tariff Act" and other policies, these laws and regulations provided the necessary legal protection for the adjustment of the oil and gas revenue, the import and export duties, and protecting the foreign investment. In early transition, Russia attract a large number of foreign investment using production sharing agreements etc., along with Russia's economic situation gradually improved, the government strengthened the control of the economy, the government displayed the resisting the foreign capital entering energy sectors in many transactions, Russia made many limit in the oil gas resources sector for the foreign capital gradually.Chapter 5"the natural resources'influence on Russia's economic growth"proved that Russia had the resource-dependent economic characteristics, and discussed whether Russia had fall into a "resource curse" from the industrial structure, trade structure and investment structure, this chapter The research indicated that Russia's resource-dependent economic structure leads Russian economy more vulnerable to international oil price shocks, and shows the"Dutch disease"symptoms. Based on the thorough analysis to the Russian natural resource function mechanism, this paper find that, due to the abundant natural resources, there were many incomplete and uncoordinated place, such as lagging institution reforms, rent-seeking and corruption, inequality of income and wealth distribution. When the low-quality institution's development path has established, it will have a certain stability and durability, and it is this weak institution construction brought Russian into the resource curse.Chapter 6"the relevant policy recommendations"made some suggestion about China's region with abundance resources'economic development and Sino-Russian cooperation. Drawing the lesson from the Russian policies dealing with the resource curse, and combined with China's central and western regions'actual characteristics which having the abundant resources, the paper proposed that the local resources development stabilization fund should be established, and adjusting the industrial structure, developing innovation economy, optimizing property institution arrangement and other policy recommendations. (5) This paper argues that, although Russia actively took various measures to get rid of natural resources dependence, but it is a long-term task. Russia's economic structure depend on the natural resource will not change in short-term. Therefore the cooperation in the field of energy is still the Sino-Russian cooperation important content. Because improving the economic structure diligently, the development innovation economy and the high technology and new technology industry are Russia's main strategic concept, the Sino-Russian cooperation development direction also inevitably turn from the traditional natural resource merchandise trades to the high technology industry cooperation.Chapter 7"conclusion and outlook"summarized the main points of this paper, and make the prospect of further research.