In fact government owns about a quarter of total Russian economy, not all of that. 25% is still high but as Viennacon said you can’t judge them by American standards. Government also makes some 40% of total investmensts in Russia which is a sign of both higher government control of economy and a crony capitalism but we are talking about a civilization which classified private enterprise as a felony just 30 years ago.
A lot of those “private” companies are really under the thumb of the government too.
Indeed. I didn’t know much about Russian economics, so I read an article this morning on it. Putin has hung the economy almost entirely on natural resources, sort of as a boiler plate, since its all they have. The gas lines keep the place running, but that wont last forever and a ‘monoculture’ economy is never a good idea. Like China, Russia is sitting on underlying problems it has to address, and for the ruskies the key issue is extremely slow growth. 1% to be exact. It’s strange because with the meltdown of Europe in 2008, you’d have thought they would have poached businesses from the EU, but too many are scared off by the blatant corruption and also the flaring ethnic tensions in the country.
These bombings in Volgograd are not going to have helped, and if Putin wants to start fixing Russia’s long term economic outlook, he really does need to follow through with his promise and annihilate the Chechen terrorist threat. If anything happens in Sochi, its not Russia’s political pride that will be most bruised, it will be its economic prospects.