Economic Crisis


Trading Dollars for Yuan: How Wise Is Russia’s Reserves Management?

The greatest risk, which will grow together with funds and reserves, is that of the open or creeping politicization of investment. In other words, the state will choose to invest in “friendly” but unstable currencies, as well as to extend loans to even “friendlier” states and companies. Experience of past crises should make the responsible government agencies stay well away from such initiatives—as far as it’s politically possible.

Putin’s Courtiers: How Sanctions Have Changed Russia’s Economic Policy

Sanctions have thrust Vladimir Putin’s inner circle into the public domain. In response, the state has lent sanctioned individuals a helping hand. While previously, they would get individual government contracts, the lucky few are now setting their sights on entire industries via the mechanism of public-private partnerships. The president sees state capitalists as patriotic businesspeople, and they realize that sanctions have made Russia the only place where they can make money.

Digital Monopolies: Dividing the Big Data Pie in Russia

Companies close to the Kremlin are creating a monopoly on data in Russia. Although the data market has yet to take shape, it has already been turned into a monopoly by the president’s decisions. Competition takes a back seat to matters of national importance.

Russia’s New Agenda: Choosing Between Two Versions of State Capitalism

In an economic system that wasn’t so focused on solving government problems or fulfilling the “public agenda,” the state wouldn’t have to find ways of extracting funds from business to spend on social programs.

“No Trust”: What Russians Think About the Pension Reform Plan

The government’s pension reform plan has shocked the majority of Russians, who, in focus group discussions, expressed confusion, fear, and frustration with the government, including President Vladimir Putin himself. Russians expect the proposed measures to pass. But they are also prepared to resist them in various ways, and they want concessions and guarantees of employment and healthcare, especially for society’s most vulnerable members.

How Transitional Institutions Could Transform Russia’s Economy

Transitional institutions cannot be effective unless economic agents are confident that the state will fulfill its commitments and that the rules of the game do not depend on the discretion of a ruler. Empirical evidence shows that democracy protects investors from expropriation better than dictatorships do, thereby resulting in faster economic growth.

RIP Russian Banks: How to Resuscitate a Moribund System

Watching the drama of Russia’s private banks collapsing one by one naturally triggers fear: of more than 3,000 registered banks, about 2,600 have already lost their licenses. After the bailout of Otkritie and BIN, the government’s share in Russia’s banking system assets exceeds 80 percent. Fixing Russia’s banking system requires addressing the deep and systematic flaws in the central bank and the financial sector at large.

Pensions and Security: Russian Budget Reveals Government Priorities

The budget clearly illustrates its authors’ thinking. They fear popular discontent and so don’t want to risk taking unpopular steps. The regime’s main goal is short-term stability, so it keeps supporting the paternalistic governing model, which is increasingly trapped in the cycle of social spending.

How Long Until Russia’s Financial Reserves Run Out?

Talk of an impending economic collapse in Russia is misplaced. The Reserve Fund is doing what it was built to do—cushioning the economy from the shock of falling oil and gas prices and giving it time to adjust to new conditions.

The Battle for Bashneft

In the past, business deals could be secured if Putin endorsed them personally. Now, the Russian president seems to have stopped making promises to anyone; no deal is ironclad anymore.
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