Analysis of Russia

After the collapse of USSR, Russia is still looking for a way to go back to those glorious days. After the collapse of USSR in 1991, things have changed for Russia. Economic problems hit the Russian economy and impacts of those problems can still be seen today. Inflation was one of the problems in Russia after the collapse of the USSR. Russia met the real prices in the global market which were totally different than the prices within the USSR which determined by government at Soviet era. Inflation occured as a result of the reveal of real market prices. The price boom in Russia after the collapse of the USSR, caused many problems for Russian economy during the transition from socialist economy to free-market economy.

Russian has many natural resources which gives the comparative advantage in global area. Other than trade of natural resources, Russia's trade is mostly on steel trade. However, the trade volume and the variety of the goods that have been trading are not satisfying. The numbers would have been higher for Russia. The reason of this issue is going back to Soviet Era. In Soviet Union, the western goods and technologies were out of the country, and mostly Russian products were sold. Lack of competitiveness in the Soviet market did not force the manufacturers in Russia to improve the quality and design of the products. The demand was higher than the supply, therefore low quality products were being sold in the USSR and other COMECON countries. However, after the collapse of the USSR, these products were not demanded in the global market and became obsolete. Consequently, Russia only could trade natural resources and steel.

Another problem of Russia is distribution of the wealth among the nation. Russian is the country who has the most dollar millionaire in the world. The 20 % of the Russian GDP is held by approximately 100 Russian billionaires. The reason for the issue is privatization could not be done properly in Russia after the collapse of the USSR. Some "entrepreneurs" who also known as Oligarchs acquired the Soviet assets for very low prices. Therefore,  Russian economy could get the benefits of privatization.

Lack of privatization, economic instability after collapse of the USSR  corruption and lack of tradition of capitalism have caused problem for Russia in global trading area.

Turkey- EU Customs Union

Turkey and the EU signed the Customs Union Agreement in 1995. The agreement allowed both sides to trade goods without any customs duties and tariffs. The agreement is beneficial for both sides. The trade volume has increased highly and The EU became Turkey's number one import and export partner. 

There are many benefits of the agreement for Turkey's side. The benefits could be listed as;

• Turkey has benefited from an “early” legislative alignment process before its accession negotiations started.
• Turkey is participating in the EU single market for goods.
• Turkey has been implementing an EU aligned anti-trust legislation for 10 years.
• Turkey has benefited from an almost EU aligned customs legislation for 10 years.
• Turkish exporters are experienced in manufacturing according to EU technical standards.
• Turkey has adopted and implemented many intellectual property rights.

Additionally, the agreement increases the foreign direct investments between the two sides. FDI is crucial for economies in order to acquire foreign currencies, job creations and cash flow. The chart which has been shown below, shows the increase of FDI between the EU and Turkey.

To sum up, the agreement benefits Turkey and the EU highly. Trading without tariff and duties encourage both sides to trade and make investments which helps the economies to grow.

References:

http://www.avrupa.info.tr/en/turkey-the-eu/customs-union.html?print=1

http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/turkey/

Rezoning issue of the Port of Providence

Ports are crucial for many countries in terms of trade. The issue with regarding to rezoning of the Port of Rhode Island must be analyzed in details. The benefits of rezoning the port and constructing of condominiums, hotels, marinas, restaurants may be seen attracting from the political side. New facilities may increase the tax revenues of the State of Rhode Island. Additionally, it may benefit the economy by  increasing  employment rate if we considered that new business will create new job opportunities for Rhode Islanders. However, this issue is very complex. The port of Providence is located in a very strategic place. The port is on the energy supply route for Rhode Island, some part of Massachusetts and Connecticut and the decision about rezoning of the part may affect the energy prices in the region. Also, the port has many employees and possible rezoning of the port would cause these jobs to be lost. In addition to these, giving decision about the case is getting more difficult as the history of the port of Providence is taken into account.

The decision about rezoning of the port will affect many stakeholders. It seems that it is impossible to make all the stakeholders happy. Creating job opportunities by losing current jobs is a debatable issue. The optimal decision should be given after the analysis of both disadvantages and advantages of the rezoning. The effect of rezoning of the port on oil prices, employment rate, tax revenues, import and export all should be taken into account, and the best decision for all stakeholders needs to be given.