Resource-Based Economy: Blessing or Curse Essay

Resource-Based Economy: Blessing or Curse Essay

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Resource-Based Economy: Blessing or Curse
Russia is not only the largest country on our planet, but also the richest in terms of natural resources. Russia has more than 20% of world reserves of natural resources. There are more than 10% of the global oil reserves, one third of gas, about 25% of mineral ores. Moreover, it has 9% of the world’s arable land, over 20% of the world forest area and it posses the largest reserves of fresh water. Only lake Baikal has about a fifth of the world’s fresh water. And of course the possessions of such a natural wealth have a substantial impact on economy of the country.
Russia, as the part of the Soviet Union, until 1930 was predominantly agrarian-based republic, after what transformed into agro-industrial, then industrial and agricultural, and finally it transformed into industrial-prevailed country. Along with industrialization, in the 1970-s it has begun an exploration of the largest natural and mineral resources. Precisely in these years’ natural resources, especially fuel and resources used for energy production became the predominant factor of development. Thus began the natural resource export-oriented era of Russian economy.
Within a very short period of time – 10-15 years – country has taken a leading position in the production and extraction of natural resources, which have been consumed massively worldwide. While the production have been increasing, expanded the processing industry and transportation of the resources, and including metallurgy and mechanical engineering in order to ensure the activities of extracting and service industry.
After the USSR have collapsed, we may observe that Russian economy is increasingly relying on the nature-based economy, so that the main par...


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...o not say that we need to refuse of all natural resources usage. What we should do – is to use oil and gas capital in order to encourage the creation of innovation-active Russian, surely verticaly integrated corporations. And if necessary, government itself should create such corporations on the basis of the public private partnership.



References



Sergey Guriev , Alexander Plekhanov, and Konstantin Sonin. "Development based on commodity revenues." European bank for reconstruction and development. Version 108. N.p., n.d. Web. 11 Mar. 2014. http://www.ebrd.com/downloads/research/economics/workingpapers/wp0108.pdf

Sugawara, Naotaka. "From Volatility to Stability in Expenditure: Stabilization Funds in Resource-Rich Countries." International Monetary Fund. Atish R. Ghosh, n.d. Web. 24 Mar. 2014.

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