As one of the BRICS countries (Brazil, Russia, India, China and South Africa), which are expected to overtake the G7 countries in 2050 to become the next global superpowers, Russia has increasingly been a big hitter in terms of global exports – particularly oil and gas. It has the world’s largest state-run gas monopoly, Gazprom – the biggest producer and exporter – which supplies much of Europe’s needs.
With the end of the Soviet era, Russia has changed from a globally isolated country economically, to a more market-based and globally integrated economy. The largest country on earth in terms of surface area, it has been steadily climbing the economic ladder after an economic collapse in 1998 – referred to as the rouble crisis – where the government was forced to devalue the Russian currency and default on its debt. The collapse was due to declining productivity and a chronic fiscal deficit.
As the world’s largest exporter of natural gas, the second largest exporter of oil and the third largest exporter of steel and aluminium, Russia is poised to recover from the 1998 crisis and reduce the budget deficit inherited from the global financial crisis in 2008-2009, its economy being buoyed by rising oil prices especially (Russia exports 7.301 million bbl/day, according to a 2009 estimate). The challenges, however, lie in reducing the high levels of corruption, finding a way to limit an ever-decreasing workforce, and investing in infrastructure, which is poor.
President Dmitry Medvedev has described Russia as a “corrupt, raw-material-based economy”.