There was a story I read which said R from BRIC (Brazil, Russia, India, China) needs to be removed. The Russian economy has slipped big time as the 2008 crisis became deeper. Russia seemed to have undergone a major crisis in 1998 and comparisons are bound to be drawn.
There is an interesting analysis in IMF’s F&D comparing the two recessions in Russia.
Unlike the situation 10 years ago, the government now has sufficient funds to administer sizable demand-side fiscal stimulus and provide targeted social transfers to those hit particularly hard by the crisis. However, allocating public spending in a way that is productive and stimulates aggregate demand without creating new bottlenecks remains a challenge in Russia. In particular, the government’s capacity to manage large infrastructure programs is still limited. With the financial sector now playing a much more prominent role in the Russian economy compared with the 1990s, the potential costs of a banking system collapse for the real economy could be very high, as could be the cost of misguided fiscal policies. Russia’s government will have to tread carefully in the months ahead.
Read the whole thing for details.
I am actually wondering the experience of Russia like commodity driven economies. I know situation is bad as commodity/oil prices have declined and export bases must have shrunk. But how bad is the situation? What have been the policy responses? Chile had a stabilization fund from Copper exports which helped them sail through somewhat (same is the case with Russia as indicated in above analysis). It should be a good comparison study to do.