Russia's Most Important Economic Sectors - Essay Example

Shortly after liberty, the new Russian government announced a much more determined program of political and economic reformation. The agenda included an alteration of the financial system from the values of state planning which is the basic and administrative direction to the well agreed market-based economics. As result “The economic decline bottomed out in mid-2009 and the economy began to grow in the third quarter of 2009” (Economy – Overview n.d.). On the other side, Russia’s financial growth was still focused mainly in a few sectors.

The advantages of growth were not widely dispersed throughout the society. Over one-third of the people of the Russian Federation sustained to live below the poverty line. According to some study it is very clear that Russia’s long term challenges are inadequate workplace, corruption, complexity in accessing capital for smaller – non energy companies, and deprived infrastructure in need of huge investments. Russia ranks ninth as the largest economy of the world: it contributes to the sixth place by purchasing power.

The country has abundance of the petroleum, oil and natural gas. The country is also the store house of rare and precious metals. Despite the setbacks faced by the other countries in the erstwhile Soviet Union, Russia managed to be in a good position in the world’s economy. The main sectors of the Russian economy are energy, natural resources, agriculture, industry and manufacturing. Energy Sector: One error of the energy business is its construction, which is subjected by government-backed monopoly and distinguished by inequity next to private businesses, small family operators and global players.

State-owned company such as Gazprom or Rosneft, as well as several confidential companies with close links to the supporting leadership such as Gennady Timchenko’s Novatek, has privileged admission to licences, upstream assets, tax exception etc. Foreign investors are able to function in Russia only if they set up good functioning relationships with member of the controlling clans. The quickest way to be honored projects and contract in Russia is to present those clans stake in reputable international companies.

The energy sector also endures from poor value of administration. Since the rein of Vladimir Putin and his associates to power in 2000, activities to important positions in the Russian establishment, as well as the energy industry, have been made according to certain criterion: individual loyalty and the capability to manage cash flows Natural Resources Including Coal, Gas, Oil, Timber and Metals Sectors: Russia may contain as much as 35% of the world's supply of natural gas. It has proven reserves nearly twice that of Iran, the number two spot holder.

Its reserves of oil are debated, but the US Geologic Survey estimates that they may be as high as 25% of the world's oil. The US Department of Energy states: "Russia is also the world's largest exporter of natural gas, the second largest oil exporter, and the third largest energy consumer" (Russian Resources 2010). The vast gas, oil, coal, and timber raw materials of Siberia and the Russian Far East create Russia rich in mineral deposits. On the other hand, most such resources are positioned in remote and climatically adverse