Russia has been enjoying robust economic growth since 1999, and gross domestic product has doubled within a decade (after halving during the decade before this). The expansion is largely due to the country’s natural resource wealth and to rising oil and gas prices. The economy is worryingly dependent on commodity exports, which exceed 20% of GDP.
Nevertheless, strong education, innovation and entrepreneurship scores contribute to the economic dynamics. The combined gross enrolment ratio for primary, secondary and tertiary education is just below 90%, and the average worker has almost 5 years of secondary education. This is partly a legacy of communism, and these high levels of education sometimes reflect instruction inappropriate for a modern market economy. Nonetheless, Russian scientists are known for their expertise in many fields, and Russia scores very well on a range of human capital and innovation indicators, including researchers in R&D, patents granted, and high-tech exports (which constitute almost 10% of GDP). The low cost of starting a business, an entrepreneurship indicator, should allow these skills to be put to use and opportunities for growth to be taken.
However, Russia’s openness and integration into the world economy is harmed by controversial obstacles to foreign investment, including bureaucratic inconsistency and legal restrictions in strategic sectors such as energy. The governance indicators are consistently weak, with both effectiveness and regulatory quality scoring badly overall. Speculation about politically motivated interference in the economy is amplified by international tensions, which also contribute to the perceived deterioration of investment climate.
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Solid economic growth fails to translate into Comparative Liveability, in which Russia ranks a surprisingly low 83rd (although this is consistent with the low average self-reported wellbeing of Russians). One positive aspect is the high level of women’s share in national income, but this is not enough to turn around the low equality of opportunity ranking.
Besides the extremely cold climate conditions, health conditions are alarming. 42%g of the population is dissatisfied with their health, according to the Gallup World Poll, which may not be surprising given that the average health-adjusted life expectancy is under 60 years. Infant mortality rates are relatively high, HIV prevalence is among the highest in Eastern Europe and almost 40% of Russians smoke. Partially as a consequence, the population is decreasing, despite a massive influx of migrants, mainly from Eastern and Central Asia.
Despite an abundance of nature, including the extraordinary forests of the Russian taiga, environmental preservation efforts are almost entirely absent and air quality is widely perceived to be poor, according to Gallup. High levels of divorce and widowhood result in a poor score for family life, which is compounded by low scores for community involvement. Russia has extremely high levels of corruption and a bad record for the protection of human rights. Added to a lack of government effectiveness, Russia achieves a weak score for political life overall.
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