Russia Political and Economic Outlook 2011 and Beyond
Russia Map and Flag
This hub takes a brief look at the political and economic outlook of Russia for the year 2011 and beyond. The main sources for this outlook are the Economist Intelligence Unit (EIU), CountryWatch, and projections from International Futures.
Russia - Overview of Political and Economic Outlook 2011-2015
According to the Economist Intelligence Unit report filed for February 2011, the following are highlights of Russia's political and economic outlook for 2011-2015:
• Although signs have emerged of some tensions and policy differences between the president, Dmitry Medvedev, and the prime minister, VladimirPutin, an open and destabilising split between the two is unlikely.
• Approval ratings for both men remain high, although they fell significantly in January. The effects of economic crises on social stability usually occur with a lag, but it is doubtful that discontent could threaten the leadership.
• The thaw in US-Russian relations is expected to persist, although there will be a risk of renewed tensions, especially if the US develops missile defences without Russian participation.
• The budget deficit narrowed in 2010 as a consequence of expenditure restraint, high oil prices and economic recovery. The fiscal balance is forecast to improve further in 2011-15.
• Following the deep recession in 2009, a recovery is under way. Annual average growth of above 4% is forecast for 2011-15.
• The current account will remain in surplus, albeit a declining one, in 2011-15, supported by higher oil prices.
Russian President Medvedev and Prime Minister Putin
Russia Political Outlook 2011
As of February 2011, both the Economist Intelligence Unit (EIU) and CountryWatch rate Russia's short-term political outlook as relatively stable. EIU assessed Russia's political risk a solid "B" while CountryWatch assessed Russia's political stability as an 8 on a 10 point scale (10 equating to high political stability) and political risk a 7 on a 10 point scale (10 equating to low political risk).
Although their approval ratings fell in January 2011, Russia Prime Minister Vladimir Putin and President Dmitry Medvedev continue to poll relatively high at 72% and 69%, respectively. However, according to EIU commentators, popularity of the two fell due to economic woes in 2009 and 2010 and the mismanagement of domestic crises in 2010.
The next parlimentary and presidential elections are scheduled for late 2011 and early 2012. EIU observers believe Putin's United Russia Party retain its power in the parliment and President Medvedev to be re-elected to a second term. Still, EIU reporters also warned that leadership popularity could erode as people become increasingly dissatisfied with poor healthcare, unaffordable housing and widespread corruption.
Although the political outlook in Russia seems stable for the near future, there are some concerns from the massive uprisings in the Middle East and North Africa. Russia presents itself as a democracy, but tight controls on the election process makes the government seem more like a quasi-authoritarian regime. Some fear the courage shown by the common people in Egypt, Tunisia, and Libya could spill over to the Commonwealth of Independent States and eventually into Russia. However, the EIU experts see those fears as mitigated by the differences in population demographics between Russia and the North African nations. The most important differences are the North Africa countries have a younger more engaged populace whereas Russia has an older more apathetic populace.
Russia Economic Outlook 2011
The EIU observers forecast a fairly robust Russia economic outlook for 2011-2015. Estimates as of February 2011 projected Russia GDP growth to land somewhere between 4.0 to 4.5% for the forecast period. This forecast projects Russia's economy to outpace US, Euro area, EU27, and World GDP growth estimates for the same period.
Even though Russia economic outlook appears rosy in comparison to other areas of the world, its growth prospects remain limited to commodity prices, especially oil and gas. EIU observers suggest that several factors will constrain medium-term growth including sluggish energy output growth with oil companies struggling to increase production due to depletion of existing oil fields. Other hindrances to faster growth include lower levels of foreign development aid caused by the 2009 economic crisis; a relatively weak banking sector; increasing dependence on natural resources; and poor management in Russian companies.
Russia Fun Facts
Current Time: 3:26 AM
Population: 139,390,205 (rank=9)
Area, sq. mi.: 6,601,668 (rank=1)
Area, sq. km.: 17,098,242
Human Dev. Index: 65 of 182 countries
Gender Inequality Index: 41 of 155 countries
Real GDP per capita: 15,100
Adult literacy rate: 100% (male); 99% (female)
Infant mortality rate: 10 per 1,000 births
Life expectancy: 60 (male); 73 (female)
Currency: Russian ruble
According to researchers from CultureGrams, Christianity is the main religion in Russia, with the Russian Orthodox Church claiming 15 to 20 percent of Russia's population. More than 10 percent of Russians are Muslim. After the October Revolution (1917), the Communists discouraged all religious worship. Mikhail Gorbachev was the first Soviet leader to officially tolerate—even support—religion. Though many Russians still claim no religion, the Russian Orthodox Church has rapidly regained influence, at times even forming a de facto alliance with the state. Churches other than the Russian Orthodox are allowed to operate if they register with authorities and prove they have a long-standing presence in Russia. Islamic and Jewish groups do not face these restrictions. Small groups of Buddhists also practice in the country.