Russia experienced an economic miracle between 2003 and 2013. Can it happen again?
In his state-of-the-nation address in 2003, President Putin said Russia would double its GDP in ten years.
At the time, many thought it could not be done. Russia was still recovering from the 1998 financial crisis, during which the Russian Central Bank devalued the ruble and defaulted on its debt.
According to former Duma Deputy Alexander Zhukov, "Many people doubted that [doubling the GDP] was possible".
Some even laughed at the notion as ridiculous or meaningless ("it's easy to double from zero").
But Russia's GDP more than doubled between 2003 and 2013, and Russia is now gearing up for another economic miracle.
(For the sake of accuracy, technically Putin's plan was to double GDP by 2012, taking the 2002 figure as the base. GDP doubled in this timeframe as well.)
Today the GDP value of Russia represents 2.14 percent of the world economy. GDP in Russia averaged 876.86 USD Billion from 1989 until 2015, reaching an all-time high of US$2230.63 billion in 2013 and then the combined influence of the drop in oil prices combined with imposed sanctions had its effect on growth during 2014, 2015 and to a lesser degree in 2016. It is worth recalling that the total GDP in 1999 was US$ 195.91 billion. This sort of improvement roughly equals a greater than tenfold increase in as many years.
Russia has the potential to double GDP by 2035, said former Finance Minister Alexei Kudrin who is now head of a leading Russian think tank, the Center for Strategic Research (CSR). Kudrin is the man behind a new economic program prepared for President Vladimir Putin, and he said that in order to reach the GDP goal, serious reforms must be implemented that will fundamentally change the Russian economy's structure.
Obviously, 2035 is not ten years away. So this time the GDP doubling will take a bit longer.
But Russia is well-positioned to make it happen. The plummeting price in oil has been a blessing in disguise. Russia was forced to diversify its economy and develop industries such as agriculture and manufacturing. Russia isn't planning on "throwing hydrocarbon resources into the furnace to maintain extensive growth". Now it's focused on creating a full-bodied, sustainable economy.
You can laugh if you want. But there's a bad historic precedent for doubting Russia's economic potential.
This post first appeared on Russia Insider
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