Contemporary Russia: the fall and rise of the market economy

A recent survey compared the cost of living tor expatriates in cities around the world. Not surprisingly, the top ten most expensive cities included Tokyo, London and New York. Hut more expensive than any of these was... Moscow'! Less than two decades ago, Moscow was the heart of the world's biggest planned economy. There was no property for sale back then. The state-run shops had few consumer goods. Shortages for simple things like shoes were соmmon. Today, things could not be more different. Moscow is the centre of a free market with some of the highest property prices in the world. The state-run shops have been replaced by expensive shopping centres and designer stores. Hut the change has not been easy.

(109)

The figures for Russia's real gross domestic product since 1991, when the economic reforms began, show that the economy has been on quite a roller-coaster ride. In 1991 GBP was over, S 350 billion. That fell dramatically year after year until 1998, when GDI was just over $220 billion. However, the situation improved again from 98. In fact, Russia's GDP increased steadily year after year from 1999 until 2006 when it reached around $740 billion. What caused such a change of fortunes?

Changing over to a completely different economic system could never be painless. The Russian government of the early l990s decided to use a shock therapy approach. They introduced severe fiscal and monetary policies. The government drastically reduced its spending. It cut subsidies to its crumbling state industries. Interest rates and taxes were raised, Government price controls on nearly all consumer goods were lifted. Only prices for staple goods like food and energy remained controlled by the government. New laws were introduced to allow private ownership and businesses to exist.

All of these measures were intended to create conditions for a market economy to grow. However, they also caused great hardship for ordinary people. Most workers at that time were on fixed incomes. The measures caused the cost of living to rise, but their salaries did not rise at the same rate. To make matters worse, events in the banking system in 1992 caused the money supply to balloon. This resulted in hyperinflation levels of 2,000%. Despite Russia's enormous reserves of oil and gas. the economy went into a long and difficult depression. Finally, in l998, when an economic crisis hit the East Asian Tigers, oil prices began to fall around the world. For Russia, it turned a depression into an economic crisis.

However, from 1999 world oil prices began to rise again Mostly with money earned from energy exports. Russia began to pay off its foreign debts. Inflation fell and the value of the rouble stabilized. The economy was recovering. GDP grew steadily year after year, and foreign investors began to show confidence ill investing in the country. Moscow's place at the top of the list of the world's most expensive cities is not enviable. However, it is a clear sign that the Russian economy has survived a difficult time.

 

В Comprehension

 

Now read the text again and match each paragraph with the correct heading.

PARAGRAPH 1.......................

PARAGRAPH 2.......................

PARAGRAPH 3.......................

PARAGRAPH 4.......................

PARAGRAPH 5........................

A Recovery

B Drastic measures

C Ups and downs

D Hard times

E Then and now

 

Before you listen_

Discuss this question with your partner.

Has everyone benefited from the changes in the Russian economy in recent years? Think about who is better off and who is poorer.

 

С Listening

You're going to hear three people expressing their views on the winners and losers in the Russian economic reforms. As you listen, make notes in the table.

	Winners	Losers
People
Industries
Places

 

(110)

What do you think are Russia's main exports and imports?

Where do you suppose most goods that you buy in Russian shops these days are made?

Do you have any idea which is Russia's strongest industry today?

 

D Vocabulary

Complete each sentence with a word or phrase from the box.

 

■ arms ■ broke ties with

■ domestic consumption ■ fall back on

■ infrastructure ■ open to

■ privileged elite ■ run down

■ Socialist Bloc ■the future holds

■ turnover

1 Factories become.......................if management

don't look after buildings and invest in now equipment.

2 Nobody really knows what........................but you

should make plans anyway.

3 Many countries make lots of money selling

......................like tanks and guns to

foreign armies.

4 In the West, the communist countries of the USSR were called the........................

5 When he left the company, he.......................all

jus old colleagues.

6 It's good to have some savings to.......................

during hard times.

7 The company was very...............my proposal for

a new range of products.

8 Most of the wealth in modern industrial countries is owned by a small.......................

9 Products for.......................are only sold in the

country where they are made.

10 The.......................means the roads, railways.

power and communication networks that industry needs.

11 The.......................of our new products has been

very high and we have gained a good income from them

Russia's foreign trade

Through most of the 20th century, Russia's, or the USSR as it was known for most of that century, trade with the outside work! was mostly limited to trade with other members of the Socialist Bloc. It was self- sufficient in energy resources and primary goods. Its manufacturing industry was for domestic consumption only. Foreign consumer goods simply didn't exist. Investment from abroad was not encouraged because the government wanted full control of production and prices. But

things have changed.

The Russia of the 21s! century is much more open to business with the rest of the world. In the first six months of 2005, its total international trade turnover was worth about 8150 billion. Both exports and imports have grown in recent years, but exports are growing more rapidly in value. This is mainly through the sale of oil and gas. in fact, energy resources make up over two thirds of Russia's exports. The growing price of these commodities on world markets has brought huge amounts of foreign currency into the Russian economy. Metals are also important for the Russian economy. Russia's steel industry, for example, is one of the world's biggest. Other primary goods such as timber, minerals and fish are also important.

The value of trade isn't the only thing that has changed There have been changes in Russia's trading partnerships, too. In the old Soviet days and even in the years that followed the fall of

(111)

communism. Russia's main trading partners were other communist countries that used to he known as the COMECON (Council for Mutual Economic Assistance) countries. In the early 1990s, tor example, Russia still had trade agreements to export energy resources to many former Soviet republics. As oil prices increased, however, many of these countries found it difficult to pay for Russian oil. and exports fell. At the same time, trade with other parts of the world, especially the European Union began to grow. Communist ties have not all been broken, though. One of Russia's most important trading partners is China.

Hut what does the future hold for the economy? The danger for Russia is that it relies very heavily on exports of oil. gas and minerals. Prices for these commodities can change suddenly on the world markets. What does Russia have to fall back on? At the moment, not very much. Its industrial sector is mostly run down and uncompetitive. During the Soviet years, a large part of the country's industrial strength was used to produce arms. Today, military equipment and weapons are still the biggest manufactured exports from Russia. It has to import almost all other manufactured goods.

Many economists believe that Russia must spend its oil money on investing in capital and infrastructure for industry. Doing this will encourage foreign investment and further economic growth. In turn, this will help to spread the benefits of growth to everyone in Russia, not just a privileged elite.

 

E Comprehension

Now read the text again and decide whether these statements are true or false. If the statement is false, correct it in the space provided.

1 During the Soviet times, Russia did not trade with other nations.

2 The value of exports is growing faster than the value of imports.

3 Metals are Russia's largest export.

4 Many of Russia's old trading partners cannot afford its prices any more.

5 Russia no longer trades with communist nations.

 

Weapons are Russia's biggest export.

Economists believe that Russia needs to invest more in its manufacturing industries.

Notes:

 

Before you listen

Discuss the following with your partner.

Russia is the second largest ой producer in the world. It also produces huge amounts of natural gas. How many other oil or gas producing nations can you name?

F Listening)))

Now listen to someone talking about Russia's oil and gas industry. Complete the notes with the correct number.

Russia's gas reserves: (1).......................

cubic metres

Russia's gas output: (2).......................cubic

metres per day

Russia's oil reserves: (3).......................barrels

Russia's oil output: (4).......................barrels

per day

Proportion of European oil and gas bought from Russia: (5).......................

Proposed pipeline to connect Russia with China and South Korea:

Length of proposed pipeline: (6).......................km

Cost of proposed pipeline: $ (7).......................

 

(112)

G Speaking

 

Discuss these questions with your partner.

How have the economic changes in Russia affected you and your family?

Do you think life in Russia is better or worse than it was five years ago?

Are you optimistic about the future?

 

Task

Plan the Russian economy

Work in groups of three or four. Work together to make a plan for the economy. Your goal is to achieve steady growth, full employment and low inflation in five years from now! When you have your plan, take turns to present it to the rest of the class. Your plan should include the following.

fiscal and monetary policy education policy

social policy - health care, pensions and transfer payments

industrial policy - for example, what industries you will promote

foreign trade policy

environmental policy - how you will avoid negative externalities

Use the space below to make your notes.

H Writing

Imagine it is 2015. Where will you be? What will you be doing? What will the Russian economy be like? Write an informal letter to a foreign friend who has not visited Russia for many years.

Letter from the future

INTRODUCTION

PARAGRAPH 1

Thank your friend for their last letter and respond to the news they told you.

PARAGRAPH 2

Tell them your latest news:

What job are you doing?

Where in Russia are you living now?

Have you got a family?

PARAGRAPH 3

Describe how the Russian economy has got worse since 2008.

PARAGRAPH 4

Describe how the Russian economy has improved since 2008.

PARAGRAPH 5

Say what your plans are.

Sign off Write 200-250 words

Pronunciation guide

Subsidy

Expatriate

Enviable

Drastically

Shock therapy

Hyperinflation

Infrastructure

Elite

COMECON

Mutual P

rivileged

(113)

Revision Vocabulary

Units 17 to 21

A 1 Complete the puzzle with words from units 17 to 21. Can you find the highlighted phrase?

		V
					M
	.			N
				D
			M

CLUES

1 Hopefully this will happen to the economy after a recession.

2 The value of imports compared to the value of exports is called the balance of........................

3 Managed by the government.

4 Something that encourages.

5 When the value of imports is greater than the value of exports, there is a trade........................

6.......................goods are those which are not

absolutely necessary.

7 A land.......................is a man who rents

out property.

8 People who lend money to companies so that they can grow.

9 A kind of exchange rate mechanism.

10Goods that are raw materials for industry, or other goods that are not processed.

11....................inflation is very, very high inflation

 

Now write your own definition for the

highlighted phrase.

 

В 1 Organise these words and phrases into two groups: those with a positive meaning and words with a negative meaning.

I aid ■ boom ■ corruption

I deficit ■ emancipation ■ enviable I fortunate ■ hardship В hyperinflation I lay off ■ overheat ■ plenty I political instability M progress I recovery ■ run down ■ slump I stabilise ■ struggle ■ value for money

B2 Now make eight sentences using as many words as possible from this exercise.

С Complete this letter to a magazine with a suitable word in each gap. The first letter has been given.

 

Dear Editor.

When I read the article Tough Trade in the February edition of your magazine I was very disappointed. You complained that my country has

put unfair (1) t......................on imports of products

from more (2) d......................economies such as the

USA and the EU. You are also unhappy that we use (3)

q......................to restrict the import of some goods.

However, without those policies, our country would

(4) s......................to survive and the trading (5)

p......................we have would suffer.

Your government gives (6) e......................to

many of its industries. This financial help means that your farms and factories can produce goods much more cheaply than ours. How can we compete? Also, please don't forget that until my

grandfather's (7) g.......................our country was

a (8) с......................in your empire. We are still

paying off the (9) d......................that you left behind

when we finally won our freedom

For these reasons, the trade restrictions that my

government uses are (10) e......................for

our economy.

So please - no more complaints! Moses Samkange

(114)

 

TRANSLATION WORK

1 The science of economics studies business, production, trade, inflation. unemployment and the decisions that we, governments and companies take every day.

2 While microeconomics studies how companies and households run their business, macroeconomics looks at the economy of a country as a whole

3 Economic resources include both material things such as raw materials, housing and others, as well as non-material things, for example, time.

4 Every day we make many decisions and each is a trade-off between different resources.

5 Economists collect data and on the basis of this data they create economic models.

6 Economic models show relationships between different processes in the economy.

7 Adam Smith, the father of modern economies, considered that a nation's wealth depended on its ability to produce goods.

Unit 2

1 Economists test theories using empirical evidence. It is evidence that can be collected and measured.

2 This theory deals with factors such as inflation. taxes, salaries and unemployment.

3 Governments, companies and academies use econometrics to make correct decisions, find out relationships between variables, etc.

4 Some variables arc considered over a period of time. Such analysis is called time-series.

5 According to the law of demand as the price for the good rises, the demand for it falls.

6 Price elasticity, the price/demand relationship, helps to set prices at the correct level in the given market for a particular time.

7 Some other factors apart from price affect demand, and that causes a shift in the demand curve.

Unit 3

1 To make a higher profit the seller has to raise his price and reduce his production costs.

2 In the market economy companies have to compete with each other for a share of the market.

3 Today, in our lives,and in the economy, money, coins, banknotes and credit cards play a very important role.

4 In the traditional economy people hunted and gathered and had no property. Land was shared by the whole tribe. Division of labour first appeared here.

5 Any economic system has its benefits and drawbacks. The biggest drawback of the traditional economy is the fact that [people consume almost everything they produce.

6 The market economy is not controlled by a government. Competition, which helps to control prices and quality, exists in a trie market.

7 A truly free market economy cannot exist as all governments control the economy to some extent by setting limits.

Unit 4

1 In the market economy supply and demand decide everything: its direct opposite is the planned economy.

2 In a planned economy a government decides what is produced, how much is produced and how and at what price it is sold.

3 In the world there is no perfect economic system Market economies have their strengths, but they also have drawbacks. In planned economies governments can make sure that everyone can afford basic commodities.

4 Planned economies have problems with supply as it is difficult to calculate how much to produce and how high a demand to expect. 5 People have to hoard different goods and shortages of goods become common.

5 In many countries privately-owned businesses exist alongside state-run industries, which need protection from free market competition for their development.

(115)

6 Deregulation leads to increased competition and the influence of market forces.

7 Governments may put limits on free enterprise by banning trade in various goods, preventing monopolies and protecting consumers and the environment.

Unit 5

1 If you have a great deal of money and want to buy something, you always face a budget constraint.

2 The utility of a bundle depends on the utility of each good and its quantity.

3 Marginal utility is that of consumption of an additional item of the good.

4 Costs are money spent to manufacture goods or provide services. For example, rent, interest on loans, cost of electricity and raw materials.

5 Fixed costs change neither in the short term nor with increases in production.

6 Variable costs change with the size of production. An example of such costs is the quantity of raw materials needed for production of the goods.

7 An economy of scale is a situation in which variable costs rise much more slowly than the size of production.

Unit 6

1 Market structure is connected with competition. It affects the price.

2 A market of perfect competition has a number of features. There must be many competing companies, supplying one and the same good or providing one and the same service; all customers and companies must have complete information on the market; there must not be any barriers to new companies entering the market.

3 If we speak about a market of perfect competition, it is important that all companies should have access to technology and resources.

4 In a market of perfect competition there are many companies, but none of them are able to control prices.

 

5 In a monopoly the market share of one of the companies is so great that the rest are not able to compete.

6 As a rule, monopolies are not good for consumers as they are price-makers.

7 Besides natural monopolies, some monopolies can be created in more aggressive ways by takeovers of other companies.

Unit 7

1 The market where employers buy workers' service for wages is called the labour market.

2 Increased output is the utility which employers get from their purchase of labour.

3 All markets, including the labour market, obey the laws of supply and demand.

4 The labour demand curve may shift to the right and to the left. If, for example, the demand increases as a result of increased production, or decreases thanks to any new technology which can replace workers.

5 One of the trade-offs we have to make in our lives is to find the right balance between work time and leisure time.

6 Natural limits such as sleep and rest bring down the possible number of working hours. We need some time to switch off from work, which also decreases working time.

7 If the hourly rate increases, people want to work longer hours. This is called the substitution effect. But the effect also has a limit.

Unit 8

1 The factors of production are required to produce goods. These arc land, labour and capital.

2 Land as a factor of production includes everything that nature provides and which may be used for production.

3 An educated, skilled and fit workforce is more productive; that is why education and healthcare play an important role in the economy.

(116)

Translation Work

4 Capital includes factories, warehouses, equipment, tools and computers; everything that is used in the manufacturing process.

5 At present industry is becoming more capital intensive and less labour intensive.

6 Division of labour and specialization make the manufacturing process more efficient and productive.

7 Workers perform their operations automatically. This speeds up the productivity of the labour force and improves the quality of their work.

Unit 9

1 The market price is a reward for the efforts of the producer.

2 If the price on the market is lower than expected, the buyer will get a bargain.

3 Surplus measures the utility that the consumer gains from his purchase, or the profit that the producer makes.

4 The difference between the price that consumers are prepared to pay and the price that they really pay is called consumer surplus; it is a very important economic concept.

6 Companies make use of many pricing tricks which help them to increase their profits. Prices can be set higher or lower than the market price; sometimes companies use price discrimination.

7 Auctions are becoming very popular, for example, on the Internet. In an auction all participants make bids, and the highest wins.

Unit 10

1 Though many economic laws, formulas, theories and concepts often seem far removed from everyday life, economic policies affect the life of society, families and individuals. Welfare economics considers issues of equity or fairness.

2 Economists examine how income and wealth are distributed among the population. And equity is realized through taxation.

3 According to those economists who share the concept of welfare economics, any economic system is unfair.

1 Governments receive revenues from different sources with taxation as the main one.

5 Through taxation governments achieve different goals. They decrease the income gap between the rich and the poor, they discourage people from consuming harmful products and they control overall supply and demand.

6 Most taxation revenues go on public goods which include national defence, street lighting, healthcare, education and others.

7 The effects which economic activities have on people are called externalities. These may be positive or negative. For example, industries can do harm to the environment.

Unit 11

1 Wealth can include valuable belongings, money, gold, stocks and shares, works of art, land, property and precious jewels.

2 Besides a salary or an unemployment benefit, there are other sources of income. For example, interest from savings in a bank or rent from property.

3 The distribution of wealth in many countries has remained practically without change for many years. A large share of the wealth is concentrated in the hands of a small group of the population. Inequality is difficult to eradicate.

4 The Lorenz curve shows the relationship between income and population, in other words it represents how income is distributed in the market economy. The extent of the inequalities in income distribution can be judged from the curve.

Poverty is a global problem. Though it is mainly-associated with developing countries, to some extent it also exists in developed countries.

When we speak about absolute poverty, we mean the people who live below the poverty line.

7 People on a low income spend all the money they have on daily necessities. They cannot save.

(117)

1 The Great Depression was a devastating collapse for the American economy the effects of which were fell almost in every country of the world. The depression changed altitudes to the science of economics.

2 After the depression of the l930s. the most important aims of any government have become steady economic growth and control over inflation to avoid serious economic recessions.

3 Fiscal policy is connected with the tax system and the budget of the country. By this policy the government can influence disposable income, demand and economic growth.

4 The main tool of monetary policy is interest rates.

5 Aggregate demand is demand in the whole economy. It includes demand from consumers, companies, the government and customers abroad.

6 The value of all the services and products produced by the whole economy forms real national product

7 The growth or falldown trend for supply and aggregate supply in the short run is the same, but in the long run aggregate supply growth is not affected by price, but depends on the factors of production available in the economy

1 Before the use of money, which is taken for granted by people today, the basic system of payment was swapping or bartering.

2 The first commodity money was metal, salt and other valuable commodities. Such money lacked liquidity, that is the ability to circulate freely, but it stored value.

3 Fiat money does not have any intrinsic value, but only represents value.

4 If you save money, you may put it in a box under your bed, which is unsafe and unreasonable, or you may put it in a bank account. The money in an account earns interest.

5 The main service which any bank provides to its customers is lending money. Banks are the most reliable lenders.

6 If a client defaults on a loan, the bank uses interest to cover the losses. Though most clients pay back their loans, interest serves as a form of security.

7 A banks' clients can make Withdrawals any time, as any bank keeps some percentage of the savings received from its clients as the reserve.

Unit 14

1 Fiscal policy regulates the functioning of the tax system and government spending. Both affect economic growth

2 A progressive taxation system operates in many countries of the world. The more money a person earns the higher the tax he pays.

3 Government spending can affect economic growth through the so called multiplier effect

4 Monetary policy involves making changes to the interest rate and controlling the money circulating in the economy

5 The interest rate is usually set by the central bank of a country, which also serves as a lender for commercial banks.

6 When buying houses many people take out mortgages from commercial banks. If the interest rate increases, the mortgage becomes more expensive.

7 If the interest rate is low. companies invest,and expand their business, the national currency value falls and national goods and services become cheaper for foreign buyers. Exports begin to grow and more money comes into the economy

A too rapid growth rate in the economy may cause infation. A steady growth rate is preferred. This is the and of monetary and fiscal policies

The interest rate is determined by the levels of supply and demand in the money marke

(118)

3 Money supply is the money in circulation, including cash, money in hank accounts, reserves, etc

4 Events like wars or natural disasters which cannot he controlled by governments may affect the economy in unexpected ways.

5 Demand-side shocks may occur in the countries heavily dependent on exports.

6 Shocks may be both demand-side and supply-side. They can cause a knock-on effect on the national economy or other economies.

7 When supply-side shocks occur, the supply of raw materials or components is disrupted. When some good is in short supply, its price rises, so do manufacturers' variable costs and their juices.

Unit 16

1 One of the ways to measure the inflation level is the retail price index, which is calculated for the basket of goods.

2 Cost-push inflation occurs when prices rise without an increase in demand, which is common when producers" variable costs rise sharply.

3 Among other causes of rising inflation is the growth in the circulating money supply. This is explained by the quantity theory of money

4 People with fixed incomes suffer most of all from rising inflation

5 Unemployment can be cyclical or structural. Cyclical unemployment varies with growth or recession in the economy. Structural unemployment depends on the low demand for labour in some industries.

6 There are other types of unemployment. For example, frictional unemployment, when people are looking for new jobs, as well as seasonal unemployment, when some industries work seasonally.

7 The situation in which everyone who wants to work has a job is called full employment.

Unit 17

1 When economic growth is calculated inflation is taken into account

2 Sharp, sudden economic growth may cause the economy to overheat. Such growth is called a boom.

3 Savings, capital growth and technological progress arc considered essential conditions for economic growth.

4 Technology advances lead to increased productivity from the same amount of capital and resources.

5 Long-term economic growth is often followed by a recession. Such a cycle is called the trade or business cycle. It has four stages, boom, slump, recession and recovery

6 When demand for goods and services is steadily growing, companies have to take on more employees, consumers confidence rises as their incomes also go up.

7 When the slump comes, the economy continues to grow but at slower rates. inflation starts to rise, confidence falls.

1 All through world history people and countries have been trailing with each other. In the modern world an economy is considered open when it imports and exports goods and services.

2 Export and import of goods is defined as visible in contrast to the invisible export and import of services.

3 The balance of trade is an integral part of the balance of payment. If imports exceed exports, a country has a trade deficit, if the situation is the opposite, a country achieves a trade surplus.

4 Almost every country in the workd has its national currency. Some countries share a common currency, for example, the 13 European Union member countries.

5 An exchange rate is the price of a currency. Like any price it is decided by supply and demand in the market.

6 The rate of exchange is the equilibrium between demand for the currency and its supply.

7 A change in the exchange rate of the currency always has an impact on the country's economy. For example, if the rate of exch

 

(119)

rises, the country's goods get more expensive and demand for them abroad falls. As a result the country's exports may decrease.

Unit 19

1 The exchange rate may affect the whole economy: interest rates, balance of payments and economic growth.

2 When a currency is free floating the government does not control its rate of exchange and the currency is priced by the market.

3 When a government wants its national currency to float with some other currency, for example, the dollar or the euro, it pegs it to that currency.

4 If a government wants to maintain the rate of its national currency, it has to sell or to buy it or other currencies on the international money market.

5 All countries can have absolute and comparative advantages. If an economy can produce goods at a lower cost than other countries or has resources others do not have then the country has absolute advantage.

6 An economy has comparative advantage when it can produce something at a lower opportunity cost than other countries.

7 In some cases countries have to restrict trade with other countries. For example, a government may increase tariffs on imports or impose import quotas.

Unit 20

1 There are several ways to measure how developed a country is. They are, first of all, life expectancy, education level and real income of the population.

2 In the less developed countries of the world many people die of hunger or because of poverty and millions of people can neither read nor write.

3 The populations of the poorest countries suffer from natural disasters, serious diseases like AIDS and cholera are also widespread.

4 The Russian empire stretched from Poland in the West to the Pacific Ocean in the East. Russia had the biggest territory, but

 

economically it was far behind the leading world powers.

5 The Russian empire preserved a feudal economic system and subsistence farming; most of the population remained serfs till 1861.

6 Russia's industrial base was poorly developed and the population was mainly illiterate and unskilled. In the country' there were few factories. Mechanical engineering was not developed during this period.

7 The emancipation of serfs and increased foreign investments helped Russian to build up manufacturing industries. The steel industry was rapidly developed, a railway network was constructed, and mining output increased.

Unit 21

1 In Moscow in the 1990s, state-run shops with few consumer goods were replaced by expensive shopping centres. The city has become one of the most expensive cities in the world.

2 At the beginning of the 1990s the Russian government used a shock therapy approach. Severe fiscal and monetary measures were introduced. Government controls over prices for ah consumer goods except for staple goods were lifted.

3 In the period before the crisis, taxes and interest rates were raised and subsidies to state industries were cut. Events in the banking system caused the money supply to balloon.

4 The Soviet Union traded mainly with the Gomecon countries. Primary products and energy resources were traded under full control of foreign trade prices.

5 Russia's foreign trade turnover has been rising lately with exports growing in value much faster than imports.

6 Russia exports primary products: oil, natural gas, timber, metals, steel, fish. Oil and gas make up about two-thirds of Russia's exports.

7 Most manufacturing industries are uncompetitive and run-down. That is why it is necessary to invest oil money in infrastructure and capital.

(120)

GLOSSARY

A