Russian Economy From Szar-Present

The economy of Tsarist Russia was a mixture of different philosophies and

influences that generally performed poorly. As a general rule, the Russian economy

lagged behind the leading nations by a generation or two. Approaching the First World

War, the Russian economy showed signs of promise, but these merely veiled the

underlying weaknesses. When the war exposed these weaknesses in the most brutal

fashion, Tsarist rule came to an end.

The Russian Empire began life essentially as a feudal state. The economy was largely

agrarian, with serfdom being commonplace, and this being the replacement in the early

19th century for slavery. The disparity of wealth was high. As other European nations

were entering the Industrial Revolution, Tsarist Russia was barely throwing off the

shackles of serfdom, in 1861.

However, they only replaced on set of economic shackles with another. The serfs were

forced to pay heavy taxes to their former landowners for what was often marginal land.

The result of this policy was the perpetuation of economic stagnation and vast income

disparity. It was not until the later part of the 19th century that Russia began to move into

the Industrial Revolution.

One of the country’s most significant infrastructure development projects was the Trans-

Siberian railroad, which opened up the east to economic development. However, the

costs to the Empire for the building of the line were high, and the expected benefits

failed to materialize in the timely fashion. Industrialization, however, had some to

European Russia by the time of Nicholas II’s ascension. As the economy slowly lurched

out of agrarianism, income disparity continued, with industrialists holding the bulk of

wealth at the expense of workers, who were paid poorly, working in unsafe and

substandard conditions and lived in poverty.

These conditions remained through the early part of the 20th century. The discovery of

mineral wealth in Siberia gave cause for optimism. Under the far-reaching reforms of

Sergei Witte, Russia has adopted the gold standard and encouraged foreign

investment. The Baku oilfields had been developed and the agricultural sector had seen

improvements since the former serfs were no longer required to pay their land tax.

Production of steel, oil, coal and iron had tripled between 1890 and 1990.

However, the economy was weak, hobbled by corruption and poor management.

Exports were being reduced and imports increased. Grain production stagnated.

Inflation was high, which reduced real incomes dramatically. Food shortages become

rampant, especially in Petrograd. The outbreak of war exacerbated all of these

problems, and the high death toll demoralized the country. The economy all but

collapsed, and with it went the Tsar and the Russian Empire.

The economic chaos that ushered in the Soviet Union met the Russian people on the

way out of the Soviet Union as well. Despite the problems in the 1990s, ranging from

massive unemployment to currency collapse, the Russian economy today is showing

signs of improvement, modernization and stability.

Since the currency collapse, Russia has posted consistently high GDP growth figures

and ranks first in GDP growth in the G8. Macroeconomic indicators are consistent with

an emerging economy. The economy today is based