Summary of the Russian Economic Policies March 21, 2011 Differences in Fiscal Policy of our Countries Several differences in Russia’s Fiscal Policy from the other countries are the multiple measures that are available to evaluate the performance of fiscal policy. Russia’s debt-stabilizing surplus funding through the Russian Central Bank is Russia’s most appropriate measure when evaluating its ability to sustain the public debt in the long-term. Russia currently has the third largest GDP growth rate next to India being second, China being first, and Brazil being fourth; however, Russia ranks 13th on the Global scale.
President Putin’s new fiscal policy in 2006 allowed Russia’s currency (in rubles) to become interchangeable for both recent and capital transactions. Russia also overhauled its entire tax system by taxing and saving the ever-increasing oil export revenues and provided flat 12% flat rate taxation for its citizens opposed to the higher tax rates for various citizen classes from other countries. In addition an integrated tax system was put in place for corporations providing a 110% improvement on tax collection.
During 2007 the Russian federal budget surplus was 6. 5% of GDP, and in 2008 the Russian Government finished the year with a surplus of 5. 1% of GDP. Russia’s new standard fiscal stance and fiscal impulse were the most appropriate measures in evaluating how much fiscal policy was contributed to changes in aggregate demand. Factors that contribute to economic growth Several factors contributing to economic growth are the country’s ability to export more resources than other countries; to include the increase in the quality of available resources.
For instance, Russia has the ability to manufacture and export more efficient fuel in the form of jet fuel, which is much more suitable than the normal oil or coal exports regarding energy conservation. This kind of switch in resources provides the country with a much higher economical growth rate due to a country being able to export a higher quality resource. In short, a Superior resource contributes to economic growth. A good tax policy also contributes to economic growth provided that there is equilibrium among the / a countries citizens and businesses.
Technological advancements assist in economical growth simply by allowing the country to locate and retrieve higher end resources such as biofuels and green energy; this provides an enormous prospective for expediting economic growth. Examples from Our Country According to World Bank estimates, Russia’s anti-crisis funding during 2008 and 2009 constituted to about 6. 7% of the GDP. This crisis funding provided relief to the financial market sectors and businesses simply through liquidity funding to banks and tax cuts to its businesses.
This also provided a modest support system for households and small and medium enterprises (SMEs); this included increases in unemployment benefits. By the end of 2009, Russian officials carefully agreed that the financial market turned for the better, leading to the discontinuation of several anti-crisis support systems by early 2010. The Russian federal government went ahead and approved a 6. 3% increase in pensions in April 2010 with intentions of further pension raises totaling 50% over the next couple of years.
The Russian President (Putin) re-distributed the responsibility concerning the national government by handing it authority that the government had not seen since the Soviet period. Businesses that were run by the State were constantly being used to eliminate several of the rivals of Putin who happen to be much wealthier. Putin’s policies though became highly well-liked among the Russian populace. This popularity handed Putin with his re-election victory in 2004.
Simultaneously, the export market Russia so much enjoyed came from the substantial incursion of currency from foreign markets; thanks to increasing global oil prices (beginning at $16/bbl during the late 1990’s to $42/bbl throughout Putin’s first term) Government Fiscal Interventions in Economic Expansion / Recession Some good Government fiscal interventions for expansion would be to streamline programs, such as making Healthcare universal, Force the governments to solve problems in the short run, and work on a greater investment consistency within small businesses.
Another positive Fiscal intervention would be for a government to reorganize and modernize trade-unions during times of economic expansion. And instead of borrowing from foreign countries like China and Japan while in a recession, money should be borrowed on a more intense scale through national banks within the country itself to self contain its own ability to control any kind of expansion or recession; in other words, utilize the resources available in country before running a high deficit of borrowing from foreign markets. Key economic indicators