Since Putin Took Office, The Russian Government Intervention In The Economy

Russia employed the 'shock therapy' to accomplish the transition from socialistic economy to capitalistic economy. However, 'shock therapy' was not suitable for the national situation of Russia. Russian economy didn't develop towards to a stable way, but suffered much damage. During the 1990s, Russian GDP dropped by nearly 50%, which is only equal to 1/10 of American GDP and 1/5 of Chinese GDP. The gap between Russia and developed countries becomes larger and larger.Facing the austere social and economic situation, Mr Putin brought forward his idea of managing the country and economic thought of "Rich country and powerful nation". Meanwhile, he also advanced his economic policies to achieve the economic thoughts, whose bright point is "The third way" of combing the market economy with democratic principles and Russian realities. "The third way" means Russia neither adopts the Planning Economy before nor copies the Western economic reform, it should seek its own way. Mr Putin claims to strengthen the Government's intervention in Russian economy, exercising the measures of Planning, Administration, Laws and Economy to provide stable institutional environment and policy support for the development of market economy.It has been 6 years since the reign of Mr Putin in 2000. During this period, his controlling policies have got great achievements. Russian social order has developed from chaos to stable and its economy has got rid of serious emergency in his first-term, which provides good base for the next-step economy's recovering and developing. In his second-term, Russian economy increased quickly and Mr Putin strengthened central government's leading and controlling of important economic departments which have deep concern to the state's interests. Russian government has played a controlling role in financial market. Government strengthened the controlling and hitting to economic oligarchies. Russia's 'Controllable market economy' begins to show its active effect. During the period of 1999-2005, Russian GDP has increased by 6.7% every year and it also increased by 6.3% in the first half year of 2006. With the development of Russian economy, Russian government has become the coordinator of national economy and social powers. As is proved by the facts, government's intervention in the economy will become an important guarantee of continuous development of Russian economy.This paper tries to use the theory of government's intervention, giving detailed narration of Mr Putin's intervention in Russian economy's development, providing my own idea of intervention theory's role in economy under the background of economic globalization. I think government's intervention is needed in economic development, proper intervention in economy plays active role in economic development.