Today’s Russian Economic System and its External Economic Aspects

Bulatov A.S.


Attempting to describe the fundamentals of today’s Russian economic system as well as its transformation in the last decades, the author argues that in Russia there has arisen a system of state oligarchic capitalism, in many ways aimed at drawing various kinds of rent in the country. As the subject is broad, the article predominantly focuses on the transformation of external economic aspects of the Russian economic system. Today’s Russia stands out as an active, albeit peculiar, actor in the current global processes, its external economic profile being determined by the specifics of its economic system. The desire to draw rents from its political and economic domination pushes Russian bureaucracy to promote not perspective industries but those of the most profitable in terms of export – today it is mainly extracting industries. For some of the oligarchs it is also metals and chemistry. These industries are the backbones of the Russian export, highly monopolized by the state and oligarchs. Also, Russia has the lowest import tariff among the BRICS countries, this having an adverse effect on the development of national manufacturing (since manufactured goods make the bulk in Russian imports). Among other things, the slow growth of this industry (a principal field for innovation) discourages the flow of knowledge from abroad. In almost all recent years, capital outflow has been surpassing capital inflow to Russia. The predominant part of this outflow and inflow is to and from offshores, which makes it possible to interpret it as a turnover of Russian capital, exported from the country and then imported back in the guise of foreign capital. There have been substantial changes in migration, particularly in the short-term one. In Soviet times, the bulk of population of South Caucasus and Central Asia as well as Ukraine and Moldova had jobs at home, but now many millions of them are on temporary jobs in Russia. Economically essential for Russia, this huge inflow of labor migrants is, at the same time, creating conditions for keeping wages in the country at low levels.


Russia; economic system; foreign trade; capital movement; international labor migration.

DOI: 10.31249/rsm/2020.02.09

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