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Russia is the worlds largest country measuring approximately 17 million square kilometers and is located in Eurasia (Gilbert, 2007). The countrys size takes up about 12.5% of the earths surface that is inhabited by humans (Gilbert, 2007). It borders nations in Europe, Asia, the Pacific as well as the Arctic Ocean (Gilbert, 2007). The countrys climate, soil and topography are very varied. This gives rise to a diverse landscape and vegetation. The southernmost parts of Russia feature a mix of semi-arid areas, grasslands as well as tropical beaches. This is followed by a range of vegetation which is dominated by broad-leafed forest. Coniferous forests cover the northern end of the country along with tundra and the Arctic Ocean; the countrys two major cities are Moscow, its capital, and St. Petersburg. Russia shares land borders with 14 countries: China, Mongolia, Kazakhstan, Georgia, Ukraine, Belarus, Latvia, Lithuania, Estonia, Finland, Poland, Azerbaijan, North Korea and Norway. According to estimates made by the Russian government in 2016, the country had a population of about 146,516,759 with the disputed territory of Crimea is included. This makes Russia the most populated country in Europe and 9th globally. This paper seeks to illustrate how globalization and privatization of the agricultural and industrial sectors of the Russian economy, while beneficial overall, has forced Russia to enact policies and engage in international strategies that bring it into conflict with other world powers even as it seeks to remain competitive within the world markets.
In 2016, the Russian population was estimated at 146,374,800 people with a population density of 8.4 people per square kilometer (Yastremski, 2016). The Russian population peaked in 1991, just after the fall of Soviet Union. At that time, it was estimated to have been about 149 million (Yastremski, 2016). In the following years, the population declined which was occasioned by a reduction in fertility and increase the mortality rate: in the 1990s, the population fell by about 0.5% every year (Yastremski, 2016). This trend slowed at the turn of the century such that by 2009, the decline stopped and the first population growth in 15 years occurred (Yastremski, 2016). This population increase was around 23,500 people and was occasioned by factors such as a slight increase in fertility rates, improvements in healthcare immigration from former Soviet states and a fall in emigration from Russia. The countrys population experienced a decent population increase of over 292,000 in 2012 (Yastremski, 2016).
The major driver for population growth was economic recovery from the crisis occasioned by the fall of the Soviet Union. Economic recovery and rapid expansion led to a 50% reduction in poverty experienced after the fall of the USSR (Yastremski, 2016). This resulted in a boost in the living standards, healthcare and prospect for the future and caused fertility to rise from 8.27 per thousand to 13.3 between 2009 and 2014 (Yastremski, 2016). The country has contended with mortality rates that are higher as compared to those of other developed countries; for instance, Russia had slightly above 14 deaths per 1000 people in 2010 (Yastremski, 2016). However, its birth rates are similar to those of industrialized countries.
Russia has a larger female to male population ratio, this happens because males experience a higher mortality occasioned by higher levels of alcohol and drug abuse, engagement with terrorist organizations (particularly in the North Caucuses) and criminal activity among other factors (Yastremski, 2016). However, the ratio of male to female births is around the same. This trend is maintained up to early adulthood. In 2014, 16% of the population was composed of young people below the age of 14. Of these, 11,980,138 were male while 11,344,818 were female (Yastremski, 2016). In the same year, 10.07% of the population was aged 15 to 24, the numbers male and female members were comparable, that is, 7,828,947 and 7,482,143 respectively (Yastremski, 2016). The group aged between 25 and 54, which is majorly composed of working class men and women in the child bearing age, consists of 31,928,886 males and 33,319,671 females ( females exceed males by over 1 million); this group makes up 45.8% of the total population (Yastremski, 2016). In the group between 55 and 64 year of age, there are 8,408,637 and 11,287,153 males and females respectively (Yastremski, 2016). This indicates that there is close to 3 million more females in this category. The demographic above 65 shows the largest decline in male population, with females outnumber their male counterparts by more than 7 million. This age category makes up 13.3% of the entire population with 5,783,983 and 13,105,896 males and females respectively (Yastremski, 2016). Males have less that a 40% chance living beyond 65 years as compared to females; this is caused by alcohol and drug abuse, membership in terrorist organizations and criminal gangs (Yastremski, 2016).
Background Information about Russia- Brief Historical Overview of Russia, its Origins, and its Progression to the Putin Era
The state of Russia has been around for over 1000 years. However, it has changed over this time period and includes a period of Mongolian domination. In other instances, it formed large alliances such as the USSR and later emerged as one state. The history of Russia is described in sections below.
Foundation of the Russian state from the Eastern Slavs.
The Russian state was founded by the Eastern Slavs; these people used the wider Uralic Family of Languages (Gilbert, 2007). This group is also referred to as the Finno-Ugric peoples and the specific speakers include Hungarians, Komis, Maris, Mordvins, Finns, Khanty, Udmurts, Sami and Estonians among others. The specific date founding of the first east Slavic state is thought to have been in 882A.D (Gilbert, 2007). The state embraced Christianity from the Byzantines just before 990. Throughout the 11th century, the Russian culture was a blend of Byzantine and Slavic cultures. This state collapsed after the invasion by Mongolians starting in 1223 and ending in 1240 (Gilbert, 2007). It is estimated that a half of the population of Rus were killed by Mongols in this conflict.
Development of Tsardom and the Russian Empire.
In the 13th century, the ancient city of Moscow saw major developments, becoming an important center for culture for the country (Gilbert, 2007). The development of Moscow ran parallel with the development of a Russian state especially after Ivan IV became the leader of this state and adopted the title Tsar in 1547. The Tsardom was succeeded by the formation of the Russian empire by Peter the Great in 1721 (Gilbert, 2007). The Russian Empire was expansive, stretching from Pacific in the east to Poland in the west. At times, the expanse of this empire besides the occupation of areas with harsh climate and terrain caused it to be isolated from other civilizations of the time. This isolation would be bridged by westward expansion closer to parallel civilizations. In the 18th century, the Russian empire underwent significant reforms and was at times repressive. This period was also marked by peasant revolts, which were also suppressed (Gilbert, 2007). Initially, only the nobility could own land and there was some form of feudalism in some areas. Later after the formation of Tsardom, only the serfs (which were peasants) were forbidden from owning land. This system was abolished in 1861 by Alexander II. Despite this, the peasants living standards did not improve, and this formented many revolutions (Gilbert, 2007). Many reforms were attempted: among them the Stolypin land reforms that were conducted between 1906 and 1907 (Gilbert, 2007). These reforms included concerted efforts by the Russian government to allow peasant to own land and participate in farming. The other reforms included changes in the Russian Constitution in 1906 which for power sharing between the tsar and the parliament (Gilbert, 2007). This led to the establishment of an elected parliament referred to as the state Duma. There were also attempts to create a liberal economy, but Tsar Nicholas II strongly objected to this.
The Russian Revolution and formation of the Soviet Union.
This was followed by the Russian Revolution in 1917 which resulted from war lethargy related to World War I, economic problems and attempts to do away with autocracy (Gilbert, 2007). This revolution lead to the overthrow of Tsar Nicholas II by the Vladimir Lenin-led Communist Bolsheviks in September of the same year, leading to establishment of USSR that lasted until 1991. The period between 1922 and 1927 is seen as the rise Soviet Russia under Lenin before his death in 1929 and the rise of his successor Joseph Stalin (Gilbert, 2007). After 1927, the leadership of Soviet Union focused on central planning of the economy to produce rapid industrialization. In 1941, the Soviet Union was invaded by Nazi Germany, leading to great death and devastation, but ultimately victory over the Nazis in 1945, bringing an end to the European theater of WWII (Gilbert, 2007). During this period, Stalin had absolute power, highlighted by political repression where people were sent to labor camps in Siberia, with many of them never returning. However, the economy and military continued to develop rapidly until the 1980s where it stagnated.
The fall of The Soviet Union and rise of Modern Russia.
Towards the end of the 1980s, the economic stagnation and unpopular political system led to Soviet leader Mikhail Gorbachev's economic reforms, which in turn lead to an atmosphere of revolutionary protest and eventually the breakup of the Soviet Union (Gilbert, 2007). The Soviet Union fell in 1991 and the Russian Federation was formed a year later, under its first president, Boris Yeltsin. The country retained its nuclear arsenal and influence on its former Soviet neighbors. Additionally, private ownership was restored but the country went through social and economic turmoil until 2000 where newly elected President Vladimir Putin, who succeed Yeltsin after his unexpected retirement, took power leading to social economic growth (Gilbert, 2007). Russias alleged interference with Ukraine in 2014 resulted in American and EU-led economic sanctions against Russia, leading to economic stagnation. As seen above, although the history of modern Russia dates back to 1991, Russia has a history of over 1000 years, and has been marked by periods of success and struggle.
The goal of this paper is to conduct an economic analysis of Post-Soviet Russia and to establish the relationship between the creation of Russias mixed economy and its currents matters regarding international relations, security, foreign policy and economic status.
What is the connection between the creation of Russias mixed economic system and its current issues regarding international relations in the form of security, policy, and its economic status?
Russian possesses an upper-middle income economy. The ownership and the control of the economy are both in the hands of private entities and the government. The state owns and controls certain areas of the economy that are judged as being strategic. In the early years of post-Soviet Russia, the country denationalized much of it agriculture and industry. This partial liberalization was the reason for rapid expansion of the Russian economy in the 2000s. Over this period, the Russian economy grew at the third highest rate globally after China and India. However, some sectors, especially those relating to defense and energy, were left in government control. This form of economy where the government and private sector are major players is referred to as a mixed economy. Its technological advanced status with sophisticated space technology, arms industry and nuclear capabilities are among the areas where the government retained control.
In the 1990s, the economy registered sluggish expansion until the 2000s due to shocks resulting from reorganization from a centrally-planned economy to a mixed one. This was followed by robust growth averaging 6% until the 2008/09 financial crisis occasioned by privatization, investment in infrastructure, and increase in oil and industrial output (Congressional Research Service (CRS), 2014). Due to this crisis, no significant growth was realized till 2010 (Central Intelligence Agency (CIA), 2016). Growth of 4.3%, 3.5% 1.3% occurred in 2011, 2012 and 2013 in occasioned by global economic recovery (Central Intelligence Agency (CIA). (2015). Dismal growth of 0.7% occurred in 2014, due to the Russian annexation of Crimea and involvement in eastern Ukraine which lead to economic sanctions by the US and EU. This was compounded by a drastic fall of oil prices (Congressional Research Service (CRS), 2014). The country funds a significant percentage of its federal budget from sale of oil and gas due to its oil wealth. Therefore, GDP shrunk by 3.7% in 2015.
Additionally, a combination of factors, among them the western sanctions, led to capital flight leading to record depreciation of the ruble leading to further depreciation of its products, and further shrinkage in GDP values in terms of the dollar. The percentage investment also contracted by 2.6 and 7.6 in 2014 and 2015 respectively (Central Intelligence Agency (CIA), 2016). The GDP in 2013, 2014 and 2015 was 2,204,000,000,000, 2,212, 000,000,000, and 1,176,000,000,000, rubles respectively (Central Intelligence Agency (CIA), 2016). However, this contraction did not correspond with a rise in unemployment; changes in unemployment were less drastic over this time period, rising from 5.2% to 5.58% between 2014 and 2015 (Central Intelligence Agency (CIA), 2016). This is because the countrys large corporations and the government refrained from laying off workers to avoid increasing the levels of unemployment: there were prospects of quick recovery. The countries fiscal balance has moved from positive to negative; the progression has been 0.8 in 2011, 0.0 in 2012, -0.7 in 2013, -0.6 in 2014 and -2.8 in 2015 (Central Intelligence Agency (CIA), 2016). This means that the countrys income is not enough to fund its budget and as a result, Russia has to use its reserves.
The interest rates based on Bank of Russia (CBR) was 10%, but had experienced significant fluctuations; for instance, before the crisis the interest rate was about 5% in 2013(Central Intelligence Agency (CIA), 2016). The rate rose to 7% in 2014 and 8% towards the end of 2014 and 2015 (Central Intelligence Agency (CIA), 2016). There was a sharp rise in Q1, 2015 to about 17%, and fell continuously to 10.5% by Q4, 2015, ever since, and the rate fell by 0.5% in mid-2016 (Central Intelligence Agency (CIA), 2016). The country has had significant levels of inflation and the consumer price index (CPI) has been rising as well. The CPI compared to the base year was 6.1% in 2011, 6.5% in 2012 and 2013; it rose to 11.4% in 2014 and close to 13% in 2015 (Central Intelligence Agency (CIA), 2016).
One of the most common comparisons of Russia is with the US; the main reason for this being that these two countries have been among the important economic, military and diplomatic powers in the post-war period. Based on the average of figures between 2010 and 2014, the comparison is as follows: USs budget amounted to $2.45 trillion, which was 6 times that of Russia at $416.8 billion (Central Intelligence Agency (CIA), 2016). Over the same period, the Russia had a budget deficit of 0.1% of the GDP as compared to the US, which had a deficit of -6.8% (Central Intelligence Agency (CIA), 2016). The Russian export averaged $528 billion, compared to $1.56 trillion in the US: Exports per capita stood at $3,678.60 and $4,972.70 in Russia and the US respectively (Central Intelligence Agency (CIA), 2016). The GDP in the two economies was $2.01 trillion and $15.68 trillion in Russia and the US and correspondingly. The Russians have a higher composition of their GDP based on industry at 37.6% as opposed to 19.1% in the US (Central Intelligence Agency (CIA), 2016). Alternatively, the US has had a larger GDP per capita of $45,759.46 as opposed to $14,832.60 in Russia (Central Intelligence Agency (CIA), 2016). This is also the case with GDP adjusted to purchasing power parity (PPP). According to the above figures, the US economy performed better in most areas.
The Russian economy should also be compared to China's due to the fact that they both had communist origins. The other reason is because the two countries are global military, trade and industry and political players contending with the US for influence. Both economies have gone out of central planning in the recent past and embraced reforms aimed at a market economy. However, China has seen very rapid and sustained expansion in GDP. In 2014, the GDP PPP of the two countries was $13.39 trillion for China and $2.55 trillion for Russia (World Economic Forum, 2016). In the same year, Chinese GDP expansion was 7.7% percent as compared to Russias 1.3%. Inflation in Chinese stood at 2.6% as compared to Russias 6.5% (World Economic Forum, 2016). Although Russia has large reserves of raw materials, China has a larger, more highly trained workforce. Russias post economic crisis of 2007/2008 recovery is comparable to western European countries and Australia (World Economic Forum, 2016).
The Russian economy underwent many structural changes in the 1990s allowing significant privatization and a shift from previous centrally planned system observed during soviet era. The country is rich in natural resources including crude oil, natural gas, coal and many other minerals (U.S. Energy Information Administration, 2016). In 2011, the country became the leading producer of crude oil, overtaking Saudi Arabia, and it also reached second in natural gas production (U.S. Energy Information Administration, 2016). Although the economy is continuously integrating with the global economy, much remains to be done. On the other hand, the US economy has boasted of significant economic, trade and technological innovation in 1990s, 2000s and 2010s (World Economic Forum, 2016). There is more protection of intellectual property, innovation and economic freedom in the US compared to Russia. The US economy is largely controlled by corporation and private businesses; the government buys from these businesses.
The Russian economic system, the corruption Index and quality of life are correlated (Transparency International, 2016). During the period of rapid privatization, the process of getting the right firms to acquire institutions that were previously owned by government was not always procedural. This allowed friends and relatives of leaders to illegally acquire such firms. Still, the government control of the economy allows for inefficiencies in some sectors of the economy as non-profitable corporations remain in the market while receiving continuous state bailouts (Transparency International, 2016). Government interferences with markets has led the country to perform poorly in economic freedom index at 153rd nation globally (Miller, Holmes & Kim, 2016). This will make it hard for the country to achieve a sustainable, prosperous and diversified economy in the near future. Inefficiencies that are created due to protectionism encourages corruption, as there is no free price competition between various suppliers. Transparency International ranks Russia 119th in the Corruption Perception Index (Transparency International, 2016). Corruption leads to misappropriation of resources, theft and waste that drains the resources that taxpayers need in order to receive quality services. As a result, physical and other forms of infrastructure programs are not implemented which limits investment, economic diversification and hence sustainable economic growth. According to Transparency International, countries with high levels of corruption are repressive as powerful leaders rein in free media and civil society movements which could otherwise help reduce corruption. As seen earlier, corruption leads to wasting of resources and hence reduced living standards.
The quality of life of the Russians improved in the 2000s where poverty levels were reduced by 50% (Yastremski, 2016). This was accompanied by an increase in median incomes over this period as well as reduction in unemployment. However, some of these gains have stagnated or fallen in the recent years. Due to reduced freedom of investment, and low ease of doing business, small enterprises are unable to penetrate or effectively participate in the economy. This is also the case with private entrepreneurs who wish to start small businesses. However, government intervention and involvement in the economy helps reduces prices of some products which increases leaving standards (Economist Intelligence Unit (EIU), 2005)
The Russian mixed economy is characterized by a blend of state capitalism and the free market. In this setup, few but very large firms which enjoy financing from state controlled banks dominate the economy. The state policies are very favorable for these corporations as they enjoy protection from competition, bailouts from state influenced financial institutions and may receive preferential treatment when the government makes purchases. In addition, a few large private institutions also exist. While this system enabled the country to bridge the technological gap developed in the 90s, it limits participation of smaller firms, the situation is aggravated by reduced freedom to trade and even freedom of investment which limits competition, variety and augment inefficiency. These few large firms and government corporations though technologically at par with the West are controlled by the few elites in the government and private sector. These few elites benefit both politically and economically from the state and control the larger economy. The majority of the population only participates in the economy as workers but not as business owners or innovators. The penetration of small firms and their capability to contend successfully with large firms is constrained. On the other hand, the large private and public corporations especially in arms and energy industry are able to produce a significant amount of the GDP accounting to about 37% of the export value as seen earlier.
Russia, like all the global powers seek to maintain a list of client and partner states for its economic development (Atlas, 2014). Unlike other powers, the country still possesses a large amount of valuable natural resources. On the other hand, the US and Western Europe have used open or covert military operations, examples of this being the former Yugoslavia, Iraq, Libya, Syria and Yemeni crises (Atlas, 2014). For this reason, the Russian system which is dependent on government intervention needs a vibrant foreign policy to secure client states. In addition, Russia has a unique economy that is driven by the export of arms and petroleum that are largely consumed by state clients. For arms and military equipment, the country needs to seek and maintain client state to which it could sell military equipment and train their armies or conduct joint trainings. Such states include China, Syria, the central Asian republics, some Eastern European countries and others in African and South America. Still, Russia as an important producer of hydrocarbons and as a developing country has interests in finding countries with similar interests. Russias aggressive policies are in tandem in obtaining and retaining client states as well as aligning itself with countries with similar interests.
Russias foreign policy is aimed at securing and maintaining client and partner states throughout the globe. This is important to enable the country to have market for its products and hence increase its economic development. By so doing, the country will have capital to exploit its vast natural resources.
There is a correlation between the Russian economy and its diplomatic stance. As noted earlier, the country is in need of client states. After the Russias decision to concentrate in Eurasian economic cooperation and BRICS, Ukrainian people, especially in the western part of the country, wanted to strengthen its ties to the west through the European Association Agreement. Ukraines desire to align with the West was perceived by Russia to be economically undesirable, and additionally Russia feared that it would lose its bases in Crimea, where its Black Fleet Navy was stationed. The Russian annexation of Crimea in response to the overthrow of Ukrainian President Viktor Yanukovych preserved its naval base and reestablished its decisiveness on the global stage. Its involvement in Donbas was a statement to the West: Russias allies such as China, Iran and Venezuela were emboldened (Atlas, 2014).
Russia did not back down even after the economically ravaging US-led economic sanctions and proceeded to back the Syrian government. This move happened because Syrian is a client state for Russias arms and military equipment. Although the Soviets kept their military doctrine a secret, the Russians have trained the Syrians since the beginning of the Syrian Crisis which enabled the government to avoid collapsing despite the presence of heavily armed rebels and terrorist. Lastly, the Russian government had to make a bolder move and provide air cover for Syrian forces. This was to show defiance to US and Western European countries as well as preserve its client and military partner. After its intervention in Syria, the country warned the US against destabilizing Venezuela while the latter has praised Russia's stance in Syria.
This section describes how data was collected and analyzed to respond to the research question and hence attain the research objective. This research utilized the qualitative method; this method was selected due to the nature of the investigation. Since it did not require hypothesis testing, the researcher selected the qualitative method, as the findings could be described effectively using continuous prose.
The researcher relied on secondary sources of data. The secondary sources were not only selected due to the ease and the low cost of obtaining them but also to give many views about the subject. The researcher looked into the previously published materials such as books, articles and internet resources. The researcher looked for all materials with the information needed to respond to the research question and enrich the discourse of the research. The researcher also looked for materials that provided the background information about the Russian state from the establishment of the first state in the form of Kievan Rus. The researcher also sought for materials providing the information about the evolution of this state to the current times. Information concerning its current geographical location, land and sea borders, and recent and current economic, diplomatic and military aspects were all looked into.
The researcher conducted a literature search in which the materials that contained the information about the subject of the research were selected and used while the rest were left out. The researcher focused on analyzing existing data, in the form of news magazines, online news articles, and government produced archival documents. Efforts were made to attain accurate assessment of relationships, patterns, trends, distributions, and possible contradictions in the sources. The data obtained was recorded and analyzed in the results and analysis section below. This chapter described the process of acquisition of data needed to achieve the objective of this research.
The post-Soviet economic trajectory of Russia is a mix of prosperity and decline. Under the presidency of Boris Yeltsin, the countrys economy deteriorated and lacked an effective foreign policy. Poverty and unemployment increased as privatization of the countrys companies did not lead to any significant capital inflows. The country lost its technological advancement in military and industry and lagged behind the West and especially the US. The economic slowdown lead to increase in social problems such as drugs abuse and alcoholism increased death rate and reduced birth rate. The president failed to anchor the country on the path of development.
Yeltsin period was replaced by the rise of Vladimir Putin, who Yeltsin had appointed the prime minister in 1999.. Putin had been a KGB colonel based in East Germany during the Cold War and got his political start working for the mayor of St. Petersburg. Towards the end of the same year, Yeltsin resigned, leaving Putin at the helm right before the 2000 presidential elections.
Putin reintroduced Russia in the global stage with rapid economic reforms leading to economic growth, a more defined foreign policy and seeking to challenge US dominance in the military and diplomatic spheres. In Yeltsins era, the country had a large public debt and non performing economy precipitating social problems. This was reversed when Putin rose to power; as seen earlier, the economy grew by an average of over 6.0% in the 2000s (Focus Economics (FE), 2016). The country was able to salvage and grow its industry and military. The GDP had expanded to over $2 trillion before the crisis 2013/2014 crisis. After Putins reelection in 2004, he was seen eager to form new international partnerships by being first Russian leader to visit Israel. With term limits preventing Putin from running for a third consecutive term in 2008, Dmitry Medvedev won the election and appointed Putin as his prime minister. Putin vied again in 2012 clinching the presidency. His era has been marked by massive reconstruction and building of monumental infrastructure as the country has constructed more mega bridges than all other Russian and Soviet leaders combined. Russia is currently in the process of constructing the Kerch Bridge, a 20km-long structure which would Crimea to the Russian mainland (Helleviq, 2016).
Russias economic output especially from the industry which constitutes a large chunk of its export is controlled by few large corporations. These large corporations are either government owned or private and are majorly controlled by elites. As a result, the financial and political top class has significant grip on the economy and the politics. Among the areas that the Russian government opposed privatization were the arms and energy industries. Due to support from the government including financial and in provision of market, these firms benefited in engaging in R&D and recollecting the countrys mothballed technology developing it to parity with the west (Organization for Economic Co-operation and Development, 2015). However, this has led to limited diversification in certain areas of the economy (Organization for Economic Co-operation and Development, 2015). In addition, has contributed to an increase in corruption, which the country has had to contend with it for quite some time.
The Putin era has also seen the country become more assertive in its foreign policy and the use of its military abroad. The first modern Russian military intervention was seen in 2008 in the Russian/Georgian war. With Russias economic renaissance, there was a need to develop a firm foreign policy to obtain more client states. In addition, Russia wanted to challenge what it perceived as US homogeny on the global scene and claim its credibility to defend its clients and partners in the global stage. Russia moved to become a member of international market organizations including Eurasian economic forum, shanghai International Corporation and the BRICS. The Russian government's version of reality was one of dangerous world where the US toppled rising powers using military. Russia saw itself as being able to ward off such moves in the future. The use of military reiterates this, after Russia tried to use diplomacy and involve the UN in solution of Libyan crisis, the Gaddafi government was toppled by US-led rebels and plunged into chaos. The Ukrainian crisis, the annexation of Crimea and the Syrian war are examples of Russian economic and military renaissance and a challenge to the former order where Russia believed that the US did as it pleased with global issues.
A mixed economy, though not an exemplified model in the West or throughout the world has its own advantages. In the Russian case, it enabled the country to rapidly develop sectors it deemed important especially energy and arms industry. It also enabled the country to build on the advanced Soviet technology which had been lagged behind in the early years of post-Soviet era. On the other hand, it made the state an important economic player engaging in production and sourcing of markets. Diplomatic ties with countries such as Venezuela, China, and Syria has become very important. In addition to sourcing of client states becomes very important in such a model.
On the other hand, sourcing and maintenance of client states is not unique to mixed markets but has also been observed in market economies such as the US, UK, France, Israel and Germany among others. This trend is even more common with arms, military equipment as well as military training. Additionally, nations and states have proceeded to make bilateral and multilateral trade agreements which direct trade; this trend has been around for many centuries. Therefore, state intervention especially in the form of international trade agreements has been around and is still in use in many nations. Despite the perception that free trade increases variety and hence competition leading to increase in quality and low prices, this could be limited by trade agreements. Competition and variety is reduced as products are preferentially sourced from certain countries. The only difference with mixed economy is that the state engage directly in production, control factors of production and competes with private entities in markets.
In general, the Russian state has the responsibility to search or aid in search markets for it products, either those manufactured by state owned corporations of those made by private firms. The increase in Russian output, either from industry or from its natural resources, necessitated for a decisive international policy. In a world where trade partners and trade alliances are forged through force or military alliances, Russia believed it needed to ramp up its security policy and those of allies. This includes readiness and development of capabilities to compete effectively with other global powers. This also necessitated an active foreign policy and spirited move to gain partners as seen in the formation of Shanghai corporation and Eurasia economic forum. Although these moves are made due to enhanced economic growth in 2000s, Russia needs to further boost its economy to remain relevant to its clients and partners.
As seen in the literature review, Russia believes that the US and EU sanctions might have had less to do with their declared aim: the reason being that the Ukrainian crisis had a lot in common with Arab spring where Russia was not involved. However, one of the major characteristic of the recent conflicts is that their ousted governments are former Soviet or Russian allies. One unique case with Ukraine is that the crisis began with a drive by the masses to join the EU and become trade partners with the US and the EU. This sections shows that the Russian stances on the world powers have got it into many conflicts.
As seen throughout the paper, the Russian economy has been influenced by globalization as the country has sought to integrate itself in the global market. This is seen by many changers that have happened in the post-Soviet era. This led to reforms and privatization while the government retained control of strategic industries. This has led to privatization of agriculture and industrial sectors of the economy, which has been very beneficial and has led to economic development. This has led to increase to the countrys output both in the industry as well as raw materials. On the other hand, the country has had to seek market and partners to bolster this development. This has led to a more development rigorous of international policy and foreign policy, more attention to national security and economic development. However, this has also led made the country to engage in international stance that has brought it in conflict with other world powers although it has also made it remain competitive in the world market.
As illustrated throughout the paper, Russia's development of mixed economy has been very useful. This has enabled the country to increase its economic output and revamp its technology. On the other hand, the increased output has meant that the country has had to compete for market with other global powers. As a result, it has had to develop decisive foreign relations, security, international policy that has brought it in conflict with other global powers.