Globalisation in Russia

Topics: Russia, Vladimir Putin, Economics Pages: 19 (5913 words) Published: March 4, 2007
Globalisation in Russia : the challenge of the transition to the world economy

Fifteen years ago, the Soviet Union was a socialist authoritative country, tightly isolated from capitalist countries. Nowadays, its direct heir, Russia, is one of the most quickly growing markets of the world, strongly open on the global economy. During the 1990s, Russia underwent an extraordinary transformation from a communist dictatorship to a multi-party democracy, from a centrally planned system to a market economy, and from a belligerent enemy of the West to a cooperative partner. This change was as unexpected as exceptional: two decades ago, only an idealist would have imagined the "evil empire" to transform so quickly and peacefully into a democratic and capitalist ally of the West.

The unprecedented nature of this switch raises the question of the role of globalisation in Russian transition to market economy. The process of globalisation can be understood as the interplay of technological, economic, and political changes, leading to new patterns of trade and investment in the world. As the British-born sociologist Michael Mann puts it, "the term of ‘globalisation' refers to the extension of social and economic relations over the globe". The whole planet becomes embroiled in a single set of social and economic relations. How globalisation fastened the transformation of Russian economic system? What have been the consequences of this process? What relationship has Russia today with global economy? These are the main issues of this study.

After sixty years of self-sustaining socialism, the Russian entry to this global phenomenon was doubtlessly difficult. The post communist transition transformed not only the country's economic and political systems but also the state-society articulation at large. If the disappointing economic results of the first decade of transformation are often understood as results of Russia's opening in the context of globalisation, it also seems that it is globalisation itself which enabled the Russian recent growth. Beyond this debate, the current Russian position as regards the global system has also raised to a major issue.


I.From transition to crisis: the difficult adaptation to the global economy

The evolution of Russian economy in the 1990s

The economic causes of the downfall of the USSR

The suddenness of the disappearance of the USSR left many observers perplexed. Neither the transition towards the market economy, nor the fall of the Soviet regime seemed probable before 1987. The end of the USSR is the result of economic factors and particular political dynamics, which can be summarized in three points:

-The Soviet economic system was dedicated to change in depth. Once garnered the profits of the growth related to the mobilisation of the production factors, it was condemned to economic stagnation. In this extend, the transition towards the market economy was probably a necessity.

-Nevertheless, it was not inescapable that this transition occurs since 1987. The economic system had adapted to run durably in managed economy, with its parallel incentives and its markets. Many authoritative regimes live through the stagnation of their economy, Cuba or North Korea for example. Of course, the population did not trust in nomenklatura any more, but was, in its great majority, still supporting the Soviet system itself, which remained associated with social rights and the national power on the international scene.

-Reforms such as Perestroika accelerated the fall of the regime, by amplifying economic unevenness like inflation and shortage. Undertaken measures were partial and incoherent: they all failed. Concretely, a state business leaved to its own devices in an environment where prices are administratively set is not more efficient than a business which suffers from forward planning. It was not only one aspect but all the economic system which was to be...

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