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.