Business News Russia - Page 28

Russia

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housing. Apart from state higher education institutions, many private ones have emerged to address the need for a skilled work-force for high-tech and emerging industries and economic sectors.

Economy

The economic crisis that struck all post-Soviet countries in the 1990s was nearly twice as intense as the Great Depression in the countries of Western Europe and the United States in the 1930s. Even before the financial crisis of 1998, Russia's GDP was half of what it had been in the early 1990s. Since the turn of the century, rising oil prices, increased foreign investment, higher domestic consumption and greater political stability have bolstered economic growth in Russia. Russia has undergone significant changes since the collapse of the Soviet

Union, moving from a globally-isolated, centrally-planned economy to a more market-based and globally-integrated economy.

The country ended 2007 with its ninth straight year of growth, averaging 7% annually since 1998. In 2007, Russia's GDP was $2.076 trillion (est. PPP), the 6th largest in the world, with GDP growing 8.1% from the previous year. Growth was primarily driven by non-traded services and goods for the domestic market, as opposed to oil or mineral extraction and exports.

The average salary in Russia was $640 per month in early 2008, up from $80 in 2000. Approximately 14% of Russians lived below the national poverty line in 2007, significantly down from 40% in 1998 at the worst of the post-Soviet collapse. Unemployment in Russia was at 6% in 2007, down from about 12.4% in 1999.

Oil, natural gas, metals, and timber account for more than 80% of Russian exports abroad. Since 2003, however, exports of natural resources started decreasing in economic importance as the internal market strengthened considerably. Despite higher energy prices, oil and gas only contribute to 5.7% of Russia's GDP and the government predicts this will drop to 3.7% by 2011. Russia is also considered well ahead of most other resource-rich countries in its economic development, with a long tradition of education, science, and industry. The country has more higher education graduates than any other country in Europe.

A simpler, more streamlined tax code adopted in 2001 reduced the tax burden on people, and dramatically increased state

Worker and Kolkhoz Woman, a giant sculpture by Vera Mukhina atop the Soviet pavilion at 1937 World's Fair in Paris.