Russia has undergone significant changes since the collapse of the Soviet Union, moving from a globally-isolated, centrally-planned economy to a more market-based and globally-integrated economy. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy and defense-related sectors. The protection of property rights is still weak and the private sector remains subject to heavy state interference. Russian industry is primarily split between globally-competitive commodity producers - in 2009 Russia was the world's largest exporter of natural gas, the second largest exporter of oil, and the third largest exporter of steel and primary aluminum - and other less competitive heavy industries that remain dependent on the Russian domestic market. This reliance on commodity exports makes Russia vulnerable to boom and bust cycles that follow the highly volatile swings in global commodity prices. The government since 2007 has embarked on an ambitious program to reduce this dependency and build up the country's high technology sectors, but with few results so far. The economy had averaged 7% growth in the decade following the 1998 Russian financial crisis, resulting in a doubling of real disposable incomes and the emergence of a middle class. The Russian economy, however, was one of the hardest hit by the 2008-09 global economic crisis as oil prices plummeted and the foreign credits that Russian banks and firms relied on dried up. The Central Bank of Russia spent one-third of its $600 billion international reserves, the world's third largest, in late 2008 to slow the devaluation of the ruble. The government also devoted $200 billion in a rescue plan to increase liquidity in the banking sector and aid Russian firms unable to roll over large foreign debts coming due. The economic decline bottomed out in mid-2009 and the economy began to grow in the third quarter of 2009. However, a severe drought and fires in central Russia reduced agricultural output, prompting a ban on grain exports for part of the year, and slowed growth in other sectors such as manufacturing and retail trade. High oil prices buoyed Russian growth in 2011 and helped Russia reduce the budget deficit inherited from the lean years of 2008-09. Russia has reduced unemployment since 2009 and has made progress on reducing inflation since 2010. Russia's long-term challenges include a shrinking workforce, a high level of corruption, difficulty in accessing capital for smaller, non-energy companies, and poor infrastructure in need of large investments.
The above indicates the country is still fairly primitive. First, they are still very commodity dependent. In addition, there is still heavy state interference in the economy along with a less than developed infrastructure. While a middle class has emerged, the county as a whole has a long way to go.
Their economy is broken down thusly:
agriculture: 4.2%
industry:
37%
services:
58.9% (2011 est.)
They have the following crops: grain, sugar beets, sunflower seed, vegetables, fruits; beef, milk and industrial sectors:
complete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries including radar, missile production, and advanced electronic components, shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicrafts
Let's go to the data:
The top chart shows that overall, GDP has been growing at a strong pace
for the last 10 years. The lower chart shows the growth rate before
the recession was coming in in the 7.5%-9% range, whereas after the
recession the growth is far slower. In short, the economy hasn't
recovered as much as it should have from the recession yet.
Overall, industrial production is still growing at a pretty solid clip.
The unemployment rate has come down. While the recession hit the country hard, it appears that companies there are hiring.
Russian was hit hard by inflation over two years ago. As a result, their interest rates spiked to 12%. However, over the last year, inflation has dropped to a far more manageable rate of annual change, allowing the central bank to lower interest rates -- although Russian rates are still very high.
