Russia's Government Policies and its effect on Russia's economy.

Essay by ssj4jinHigh School, 11th gradeA-, March 2003

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The role of the Russian Government is stated in the Constitution of the Russian Federation. A Detailed description of the Government structure and activities is located in Chapter 6 of the Constitution. This can be briefly summarised as follows:

"The executive power in Russia shall be exercised by the Government of the Russian Federation.

The Government of the Russian Federation consists of the Chairman of the Government of the Russian Federation, Deputy Chairman of the Government of the Russian Federation and federal ministries."


There are two types of policies operating in Russia:

1. Macroeconomic - which affects the country as a whole, and includes fiscal and monetary policies.

A high degree of political stability and co-operation between the federal government and the parliament during the recent years has created better opportunities for realisation of key economic policies. The Russian government and the Central Bank of Russia have been working on beneficial macroeconomic policies over the last few years, using the financial restraint, to stabilise expectations, solving problems with foreign creditors, and improving the credibility of fiscal and monetary policy commitments.

Russia has already succeeded in restoring the macroeconomic stability in 1999, after the 1998 crisis. The fiscal and monetary policies were improved by the strengthening of oil and gas prices on world markets. A contraction of imports, and a higher value of exports moved Russia's current account from a deficit of 6 billion USD in 1998 to a surplus of 45 billion USD in 2000. This resulted in an increase of gross foreign reserves from 12 billion USD at the end of 1999 to 37 billion by the end of 2001 and to a massive 51 billion USD in 2002.

2. Microeconomic - which affects individuals and businesses.

Russia's microeconomic policies are not as successful as they...