Five Reasons Why People Like Russia Economic System | russia economic system

The Russian economy is considered to be one of the most powerful in the world. The country spans across continents, with Moscow being its capital city. With a fully functioning international market and a highly diversified political system, Russia has become an important trading partner for almost every country. A key member of the Commonwealth of Independent States (CIS), Russia has a vast influence over neighbouring countries such as Ukraine, Moldova, and Georgia.

The Russian economy is characterized by heavy dependence on heavy industry and a state-run economic system. Compared to the West, the rate of inflation is relatively high. Inflation is dependent on factors such as oil prices, agricultural production, and overall economic performance. With a free trade zone around its borders, Russia's economy is highly flexible and open to foreign investments. However, a huge imbalance is observed between export and import due to the high level of subsidies provided to industry.

An essential element of the Russian economic model is the role of state-owned enterprises, or so called “sovereign banks”. Unlike private banks, these banks are able to resist pressures from political officials and constantly look out for opportunities to expand their business. They have also the potential to channelize capital into different regions, depending on the need.

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A key element of the Russian economy is the State monopoly on natural resources. The huge amount of natural wealth within the country makes it one of the most affluent areas in the world. Oil, gas, and coal are just some of the elements essential for the Russian economy. Some products, however, are highly priced, while others are imported, making the domestic market rather dry. A huge expanse of credit was implemented during the times of Gorbachev, allowing the entrepreneurs to utilize the economy to manufacture consumer goods at a low cost.

The extensive range of products manufactured within the Russian system ranges from automobiles to clothing, from toys to computers. All of them are highly priced, which is the main reason why most citizens prefer foreign products, including those that are imported. They may also prefer the brand name instead of its price. However, they must be sure to get original items, as counterfeit products are rampant in the market. Most often, consumers pay for substandard or fake products, and the end effect is that the products cannot perform as they are promising to do.

The system of prices is quite complicated, as some products are subsidized, and other ones are not. Although the exact details are hard to pin down, there are some broad outlines. Sugar, for example, can be subsidized, as can certain foodstuffs, such as chicken and cabbage. Certain types of goods are only sold by the State.

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