In recent years, many discussions of the Russian economy have opened with an old joke. In the mid-1990s, John Major, the British prime minister, asked Russian President Boris Yeltsin to characterize Russia’s economy in one word. “Good,” Yeltsin said. Major, seeking more detail, asked him to elaborate in two words. Yeltsin replied: “Not good.”
The joke was prescient. Over the past 25 years, Russia’s economy has alternated between “good” and “not good.” In the 1990s, Russia’s GDP declined by some 40 percent, and in 1998, Russia suffered a major financial meltdown. Then, from 1999 to 2008, Russia’s GDP grew by roughly seven percent per year on average, almost doubling in nine years. In the past few years, however, Russia’s economy has taken a decisive turn for the worse.
In early 2013, Russian Prime Minister Dmitry Medvedev sought to push beyond official projections of four percent annual GDP growth. Yet by
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