GLOBALIZATION CHALLENGES IN RUSSIA

The Globalization Challenges in Emergent Market of Russia



The Globalization Challenges in Emergent Market of Russia

Introduction

Globalization can be defined as the increased economic interdependence of all the national countries around the world. It can also be explained as the rapid acceleration of flow of cross border movement of people, goods, services, ideas, capital and technologies across the national borders around the globe (Hopkins 2002). Globalization has connected the different economies into a single world society, and this society is termed as the global society.

Emerging market can be described as the transitional markets which are under the process of rapid growth and industrialization. Such markets are making efforts in moving towards an open market. Emerging markets are on the phase of progression from the developing market to the developed market (Peterson 2005). The few examples of emerging markets are India, Brazil, Mexico and Russia. When an economy opens itself towards the global market, it faces a great deal of issues such as social, cultural, economical, and political influences over the country's economy. Hence, globalization brings numerous challenges for the emerging markets.

Russia has gone through rapid evolution since the end of the twentieth century. It has made swift progression after 2000 and emerged with the new hope to move towards the economic growth. The Russia is the nation which was at first most affected by the globalization. It moved from a number of experiences during that time. It went through the exceptional economic change. It faced over 30 percent of the economic growth decline during that period with the increased poverty and unemployment. There are so many folds in the recent twenty year history of Russia which lead the economy towards the substantial change.

Discussion

Russia met up with numerous impacts when it moved towards the open market economy. The major factors that were adversely affected were economic growth, trade, investment, living standard, exchange rate, unemployment, distribution of income, environment, and inflation. All of these factors have been discussed in detail as following:

Economic Growth

Embracing the globalization has always been very difficult for the developing countries. Russia also had to gone through a great decline of about fifty percent in gross domestic product. The production fell down in all the key sectors. The massive turn down was observed in 1998 after the currency crisis in which the gross domestic product fell down up to US $3500.

Right after that adverse time, Russia started to experience the favorable economic growth during the period of 1999 to 2005. During that time, the gross domestic product growth increased by 7.2 per cent per year, real income by 7 per cent and production was increased by 5 per cent in 2005. All of the major industries of Russia started to grow during that time.

Trade

Russia has a high reliance on the export of oil. The export fell down about 27.5 per cent during that time, but it experienced a steady increase since 2005, and now it has been exporting its major exports to the countries of European ...