On May 11, 2007, at 1:46 PM, Chris Doss wrote:
> What companies
> have India and China created that count for anything
> on a global scale?
Lenovo took over IBM's PC division, for heaven's sake. Haier is spreading around the world. Mittal is of Inidian origin, if not literally Indian. But Russia shoulda/coulda done better, if it had managed the Soviet inheritance better.
Leave aside the company question. What are the leading sectors of the Russian economy?
Here's what the World Bank said in its latest Russian Economic Report <http://ns.worldbank.org.ru/files/rer/RER_12_eng.pdf>, which is unfortunately a year old:
> Annual data confirm trends in manufacturing that were identified in
> the previous RER. The
> vast majority of manufacturing sectors showed marked slowdowns in
> economic growth in
> 2005 relative to 2004. This particularly concerns sectors producing
> tradable goods in
> competition with foreign producers. Of these sectors, the food
> industry continues to show
> resilience, expanding at the same pace as in 2004 (4.4 percent).
> The consumer electronics
> industry grew significantly, but almost certainly due to lower
> import tariffs on parts than final
> products. The strongest decline was registered in machine-
> building, where growth slowed
> from over 20 percent in 2004 to -0.1 percent in 2005. (Figures 1 - 4).
[...]
> Capacity constraints have become increasingly important in
> industry, particularly in resource
> extraction. Although the oil industry also suffered in 2005 from
> the disruptive effects of the
> Yukos affair, most experts expect slow growth from this sector over
> the medium term due to
> capacity constraints that can be alleviated only through high fixed
> investment. The
> slowdown in manufacturing appears to be related to increasing
> competitive pressures from
> the rapid appreciation of the ruble (Figure 9). Although the
> interpretation of official Russian
> financial data for enterprises is difficult, these figures
> nevertheless give an indication of
> possible huge swings in relative profitability across different
> sectors of the economy (Table
> 3). According to these data, aggregate growth in (nominal) net
> profits in manufacturing
> during 2005 was only slightly higher than inflation (16 percent),
> while profit growth in trade,
> finance, transportation and communication, construction, and
> (especially) resource extraction
> were considerably higher.
[...]
> Although Russia has experienced double-digit fixed capital
> investment growth for the third
> consecutive year, absolute investment levels remain low in Russia
> relative to emerging
> market economies that have sustained growth over a number of
> years. In 2005, fixed capital
> investment constituted only an estimated 18 of GDP, whereas
> countries that have sustained
> rapid growth usually have associated investment rates of 25 percent
> or higher. Investment
> also remains quite concentrated in oil and gas (‘transportation”
> includes pipeline investment).
> As illustrated in Tables 5 and 6, most manufacturing sectors of the
> economy receive rather
> low shares of investment and FDI. Although manufacturing on
> aggregate received a
> relatively large share of FDI in 2005, this was due entirely to
> exceptional investment in oil
> processing associated with the Sibneft deal.
[...]
> Despite the strong economic growth and other positive trends in
> recent years, Russia
> continues to face a challenging development agenda. This includes
> spatial imbalances,
> deteriorating infrastructure, still low investment rates, social
> distress in many regions, a
> demographic crisis, and problems in supporting the competitiveness
> of manufacturing
> industries.
[...]
> Poor health detracts from the quality of life of a large portion of
> the Russian population,
> restrains economic development, and is an important component of
> the growing demographic
> crisis in the country. A recent World Bank report, “Dying Too
> Young”1, investigated the
> exceptional problems of mortality and morbidity among the Russian
> working age population,
> and outlined some distressing implications for future economic
> development. Recently, the
> government has made improving health care a major political
> priority, and new data
> available for 2004 indicate that recent sharp increases in
> household incomes and declines in
> poverty may be having at least some affect on mortality rates.
> Still, Russia continues to face
> tremendous challenges in confronting its demographic and health
> crisis, reforming the health
> system, and changing the unhealthy life styles of much of the
> population. The rapid spread of
> Tuberculosis and HIV-AIDS presents a particular future health
> threat, compounding the
> already high toll imposed by non-communicable diseases such as
> cardiovascular conditions,
> cancer and injuries. This note summarizes some results from “Dying
> Too Young”, other
> recent information, and outlines the nature of the implied future
> challenge to the country.
>
> The countries of the former Soviet Union share, with sub-Saharan
> Africa, the dubious
> distinction of comprising the two major regions of the world in
> which life expectancy has
> been declining. In the Russian Federation, female life expectancy
> (72 years) is close to the
> level of 1955; male life expectancy (59 years) is three years less
> than in that year, and is now
> at the same level as in Eritrea and Papua New Guinea. Until 2004,
> declines in life expectancy
> in Russia contrasted sharply with strong growth in incomes and
> poverty reduction since 1998
> (Figure 3.1). Even with the positive dynamic exhibited in 2004,
> average life expectancy in
> Russia only rebounded to the low level of 2000 (65.3 years). This
> can be compared with a 78
> year average in the European Union.