SEATTLE — The Russian economy has suffered shocks from decreases in oil prices and a recent deal with OPEC nations. As a middle-income nation with a rural poverty rate of 42 percent, most of Russia’s economic potential lies in its investment and growth capacity.
In 2016, Russia’s growth was projected at -0.6 percent, while in 2017 it improved to 1.8 percent. More investments in development projects can hopefully bring the economy out of its persistent recession. Russian infrastructure, in particular, makes up a large proportion of its foreign direct investment. The Russian Investment Forum is becoming a successful platform that is launching various investment opportunities within the country.
In the long run, development projects in Russia can greatly contribute to macroeconomic stability, as they will help catalyze growth, an indicator of economic development. Not only could it help boost employment, but it can also diversify markets and perhaps lower the costs of production.
Consequently, development projects in Russia are focused on bolstering key realms of the economy, including education, trade, commerce, business and finance. A majority of these projects are supported by the World Bank Group. Transparency, government planning, accountability and regional support are particularly vital for the success of development projects in Russia.
Supply-side policies have created important jobs in the economy, especially with continued government support and assistance for important state-owned enterprises involved in manufacturing, oil, gas, and other industries.
Among its BRICS counterparts, Russia trails only behind China with regards to its annual net investment. Over 325 key infrastructure projects were announced in the last five years alone.
Consequently, at the recent BRICS summit, the BRICS New Development Bank loaned over $400 million to India and Russia to fund both infrastructure and sustainable development projects.
China and Russia are working collaboratively on various mining and metal projects. The two nations set up a fund worth $1 billion to develop new projects and have allocated $500 million as the initial startup capital. These projects form a larger part of China’s recent Belt and Road Initiative, one of the key infrastructure initiatives that are ushering in a “new silk route”.
On the education front, the Russia Education Aid for Development (READ) Project is currently being led by a collaboration between the World Bank Group and the government of Russia, centered on education.
READ 2 is the second installation of the READ agenda, which aims to boost the capacities of key stakeholder groups in the provision of education. The READ Trust Program additionally assists in capacity building. Moreover, Project 5-100 is an independent agenda that could potentially attract a lot of investment in the Russian education sector and contribute to the growth and development of the wider industry.
Furthermore, the Microfinance Development Project works to galvanize legal and regulatory frameworks by bolstering the position of microfinance industries in the country, an important sector in the economy.
Development projects in Russia are also focused on improving social infrastructure. The Russian Federation Local Initiatives Support Program has initiated over 1200 projects across six regions. The agenda places a heavy emphasis on community and technical assistance.
Development projects in Russia are a good indicator of poverty alleviation in the country. They will help the economy sustain its performance and prepare for the long term, especially given the unpredictable world financial climate in recent years.
– Shivani Ekkanath