An Astonishing Revolution in Russia since the 1990s - Essay Example

Russia and Its Trading Partners: Capitalism in Russia Since 1990s Introduction Capitalism is the social, economic and political systems with a free market for products controlled by private production and usage. It is based on rights of the individuals. It can be viewed as a free market when freedom is applied economically. According to Gustafson (2001), it can be defined as economic systems whereby ways of production are largely private owned and operated for wealth in terms of profits. It is comprised of capital accumulation, markets that are competitive and labor. Capitalism is carried out all over the world by ways of globalisation. Different economic outlooks emphasizes on particular components of capitalism in different places. The government is said not to have control over the market and the significance of individual property rights. The government should have some regulations to protect monopoly in the markets to avoid individual capital accumulation in addition to property and power. Capitalism is based on production of products for profit purposes, the allocation of market-based resources and on accumulation of capital as well. According to Lynch (2005), in 1990s, Russia underwent an astonishing revolution that changed from a communist dictatorship into a multiparty democracy whereby the leaders are chosen in interval election periods. Its economy was changed into a capitalist based-markets and private owned property. The army based in Europe withdrew in a peaceful manner and the countries became independent. Some years down the line, the Russia had become a catastrophic failure in 1990s as a span of misfortune for its people. Hancock, & Logue (2000) emphasizes that, Russia is not a middle-income country since it does not struggle to overcome its socialists past and find a place for itself in the world, but is seen as a collapsed state and a criminal one too. By 1999, Russia became a looted and bankrupt state of chaos. It was also known to be the most world’s virulent and the most corrupt country than any other. Economic performance in Russia was seen to be a tragedy of historic proportions, which could only lead to economic collapse hence lack of employment thus resulting to poverty. Later in 2003, the country seemed to have a glimmer of optimism whereby President Bush praised president Putin’s effort for trying to transform Russia into a country in which freedom and democracy as well as rule of law thrives. This praising talk did not show its fruits for a long time, the Russian prosecutors arrested the oil tycoon in late 2003 and it was seen to be ruled by power hungry leaders who grabbed the nation. The image of Russia was reflected as a unique disaster zone even though its features were recognisable. Despite the pain that Russia has undergone for many years and its economic and political systems remaining far from the rights way, it has made recommendable economic and political steps.In the year 1990 and 2003, Russia was anaveraged-income country its Gross Domestic Product ranging less than $10,000 at the purchasing power. The elected president, Yeltsin, introduced some radical economic reforms where prices for their products were liberalised. Goods appeared in the stores and long queuing disappeared. According to Bova (2003), there was a lot of privatisation of shares from government to their managers, employees and the public in general. With the help of International Monetary Fund, Russia became stable. Later, there was introduction of loan-for-shares program where some resource enterprises were turned to be big businesses exchanging loans to the government. Four years later after Vladimir Putin becoming the president of Russia after the resignation of Yeltsin, its economy grew rapidly with the help of high oil price increases and the benefits of exchange rate depreciation. The forecasting of Russia’s economic growth had become highly optimistic. According to Aslund (2002), the Russia’s economic performance in 1990s was much better. The Gross Domestic Product recorded under the Soviet Union was mostly composed of military goods, unfinished construction projects and some consumer products whereby there was no demand. With the introduction of consumer goods, this made firms stop making goods for consumption that they could not sell. This reduced the reported economic output. During the Soviet Union, most of the reported output was just fictitious. The managers reduced their production figures in order to gain some bonus, but the by end of central planning, they wished to underreport the output in order to reduce the tax bill. Russia has faced an increase in inequality although there are suggestions for improvement in social pyramid. The proportion of apartments with telephones increased with 19 percent. Average life expectancy fell between the year 1990 and 2000. Economic Inequality in Russia Economic reforms in Russia are believed to have worsened economic inequality with mass privatisation seen as the primary perpetrator. As a result of shares-for-loans program, the fundamental resource-based organisations fell into the hands of small group financiers resulting to sharp increase in wealth and income inequality. Taeb&Zakri (2008) pointed out that inequality has increased in Russia at a high level since the fall of communism. This inequality is as a result of fiascoes related with justifying economic activity. Freedom of the Press Russia’s press has come in for particular reasons such as hard analysis. Since Putin rose to power, criticism of the president in Russian national televisions has been effectively stifled. Corruption According to Brauch (2008), the study that was made on the most corrupt country in the world showed that Russia had the highest rate through extensiveness of political tolerated corruption in post-communist in Russia. When business managers are compared to managers from other countries, Russia fall in the middle of both the burden of inducement and the state of apprehension Russia’s economy has today developed from the shortage-ridden and collapsing bureaucracy of 1990s into a market place of mostly private firms that produce goods and services for their consumers, but not for the organisers. The financial system has developed at an impressive rate as well as the change in political order. The small businesses are still burdened by corruption and regulation as well as dictatorship giving way to electoral democracy. Although the country’s economy has revolved from the past 1990s, the country’s economic future remains unknown and the state -controlled able firms are not able to keep enough levels of investment especially in power sections which is one of the most fundamental things in the economic growth of Russia. Political Capitalism Corruption practices that had caused the economy inevitably traversed into spheres of politics. The entrepreneurship positions depend on the authorities and their ability to defend and promote their relatives and friends into business. In 2013, the government shares were estimated in company’s total shareholder and the analysis showed that the participation is mostly in transportation where the government owns the largest percentage of the assets. Most of the lucrative sectors of the Russian economy belong to only friendly oligarchs and only Gazprom is a globally known heavyweight. Russian government is only able to indirectly influence the economy’s performance since the state-owned business role in key industries is either limited or non-existing. Capitalism in Russia and in the West Although Russia’s industrial revolution version was borrowed from the Western experiences and subsidised in part by Western finance, it produced capitalism that was different in key values from Western capitalism. In the West, redistribution of wealth advanced with proportionate redistribution of political power unlike the Russian way of distributing the wealth unequally according to power and friendliness. In Russia, the government enjoyed a monopoly over the political system and did not give any close relationship between the political and economic foundations while in the West, there was relationship between the politics and the economic foundations of publishing the newspapers. Both Russia and the West had different religious views as well. Western authorizations are making production difficult for Rosneft to pay the looming debts and be in a capacity to finance up coming investments. Distinctive Character since the Collapse of Soviet Union The Soviet Union had its backgrounds in the Russian revolution which led to overthrew of Russian empire. The majority group of the social democratic labor party led by Vladimir Lenin was overthrown then led another revolution which also overthrew the provisional government. The Eastern Europe signed off the Soviet power and influenced during the year 1989, while in 1991, the former Soviet republics were unable to share the geopolitical orientation of 1989. The Russia considered itself a distinct geopolitical while those countries along the Soviet Unions remained stuck between 1989 and 1991. The contradiction that caused the Soviet fall was the attempt to create a modern society and the instantaneousapproach to create an alternative innovation. The contradiction in international affairs was never handled. Political, social and economic environment after the collapse of Soviet Union Political environment As a result of its large landscape of natural resources, the Russian Federation was a fundamental player in the global economy. Since the collapse of Soviet Union, the population of Russia has been on a declining phase. The demographics of Russia remain to be the most pressing issues facing the country. Social and economic environment Russia’s total fertility compared to 1991 fluctuated and remained well during 1980s (Bova 2003). The Soviet Union’s government used to exercise a pro-natal and gave incentives for larger families which can explain better why after the fall of Soviet Union government there was a decrease in numbers. Breaking of Soviet Union brought up economic hardships that affected fertility rate by creating unfavorable conditions to bear a child. As a result of economic conditions, the Gross National Product of Russia declined by almost one-half with high cost of birth and caring for a child. The post-Soviet health care reform increased the costs and limited access to health care and there has been an HIV/AIDS epidemic issue hence high spread has been reported to many drug users within the country. Since the fall of Soviet Union, there has been no improvement on health care system and this has led to poor medical care together with high pollution from factories and the resources being lowered leading to lowered health status of people.The mortality rate has increased as well as inequality followed by fall in life expectancy. Economy Economy crisis were seen through increased violence and increased infectious disease related mortality (Mcfaul& Stoner 2004). Unemployment and reduced demand also was as a result of its collapse. Due to lack of employment, poverty and negative implications on population growth increased. Conclusion Russia performs an important duty in the internationalpolitical field. In fact, Russia decline in population continues to be a big concern because if it greatly takes out its workforce, it will be difficult to maintain and sustain the elderly. The demographic imbalance in Russia should be dealt with properly to avoid disasters in the future. Steps should be taken towards the HIV/AIDS epidemic and ensure policies are implemented accordingly. Russia should come up with some economic plans in order to address its workforce and create employment opportunities to its people. Mass privatisation of the 1990s remains a highly argumentative issue to address in Russia community today with so many Russians calling for significant discussions or reversal of the reforms in general. In fact, many Russians view privatisation very critical and it holds firmly negative comments and views towards the country. Russia should now change the management system of the Central Bank which is one of the major causes of growth. More job opportunities should be created in order to eradicate poverty and uplift the living standards of the Russians while improving their health care. Reference List: Bova, R. (2003). Russia and Western civilization.Armonk; N.Y: M.E. Sharpe. Brauch, H. G. (2008). Globalization and environmental challenges reconceptualizing security in the 21st century. Berlin: Springer. Gustafson, T. (2001).Capitalism Russian-style. Cambridge: Cambridge University Press. Hancock, M. D.& Logue, J. (2000).Transitions to capitalism and democracy in Russia and Central Europe.Westport; Conn:Praeger. Mcfaul, M. & Stoner-weiss, K. (2004).After the collapse of communism.Cambridge; Cambridge University Press. Taeb, M. &Zakri, A. H. (2008).Agriculture, human security, and peace a crossroad in African development. West Lafayette; Ind: Purdue University Press. Read More