Russia: Globalization, Structural Shifts and Inequality

Alexander Vorobyov and Stanislav Zhukov

in External Liberalization, Economic Performance and Social Policy

Published in print May 2001 | ISBN: 9780195145465
Published online September 2007 | e-ISBN: 9780199783960 | DOI:
 Russia: Globalization, Structural Shifts and Inequality

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By introducing convertibility of the national currency and liberalizing both current and capital accounts of her balance of payments, Russia fully exposed herself to globalization. In this chapter, a narrow functional meaning is ascribed to globalization: convertibility – with minor exceptions, the exchange rate regime in force from the end of 1994 until August 1998 – combined with free movements of capital and hard currency, pushed local producers into global competition. For Russia, with an economy historically built upon absolute and relative prices (and production costs) totally different from prevailing world prices, entering into global competition was an enormous shock. Seen in this perspective, globalization is the driving force in Russia's transition. The chapter is organized in six sections: post‐Soviet and economic chaos; external liberalization; dual economic structure; “shadowization” – the shift of a substantial part of production and consumption outside official recognition (a salient feature of the Russian transition) to the shadow economy; segmentation of the labor market; and conclusion.

Keywords: convertibility; dual economy; external liberalization; labor market; market competition; shadow economy; structural reform; transition economies

Chapter.  14296 words. 

Subjects: International Economics

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