The Economy of the Russian Federation

A. Pre-Reading activities

Task I. Study the vocabulary notes that will help you to understand the text better:

arrear (n) – задолженность, просрочка

average (v) – составить в среднем

balance of payments – платежный баланс

cod (n) – треска

combat (v) – бороться

consumer (n) – потребитель

copper (n) – медь

co-product (n) – побочный продукт

crop (n) – урожай

crunch (n) – перелом, кризисная ситуация

cutback (n) – сокращение, понижение

dampen (v) – ослаблять, сдерживать

decline (v) – уменьшаться, приходить в упадок

deposit (n) – месторождение

diamond (n) – алмаз

disperse (adj) – рассеянный

diverse (adj) – различный

enterprise (n) – промышленное предприятие, предпринимательство

expand (v) – расширяться

expenditure (n) – расход

extract (v) – добывать, извлекать

fertile (adj) – плодородный

flounder (n) – камбала

fodder (n) – корм для скота, кормовое растение

foreign debt – внешний долг

GDP (Gross Domestic Product) – валовый внутренний продукт

herring (n) – сельдь

in the vicinity – поблизости

iron (n) – железо

lead (n) – свинец

livestock (n) – домашний скот

lumber (n) – пиломатериалы, бревна

manufacturing (n) – производство, обрабатывающая промышленность

meadow (n) – луг

mine (v) – добывать

mining (n) – горное дело

nonferrous metals – цветные металлы

offshore (adj) – иностранный, осуществляемый в других странах, оффшорный

ore (n) – руда

outline (v) – очертить, набрасывать

pasture (n) – пастбище

poverty (n) – бедность

principal (adj) – главный

rank (v) – занимать место

raw (adj) – сырой, сырьевой

rescue (adj) – спасательный, аварийный

retail trade – розничная торговля

revenue (n) – доход

reverse (v) – перевернуть на 180 градусов, полностью измениться

scatter (v) – разбрасывать, рассредоточивать

sentiment (n) – мнение

setup (n) – структура, система

skew (v) – склониться, сдвинуться

specialty (n) – специализированное изделие

stock market – рынок акций / ценных бумаг, фондовая биржа

surplus (n) – излишек, избыток

taper (v) – сузить(ся), заостряться

unemployment (n) – безработица

unveil (v) – открыть, обнародовать

walrus (n) – морж

welfare (n) – благосостояние

Task II. Task II. Mind the following proper nouns and abbreviations:

CIS (the Commonwealth of Independent States) – СНГ, Содружество Независимых Государств

EU (the European Union) – Европейский союз

APEC (Asia-Pacific Economic Cooperation) – Азиатско-тихоокеанское экономическое сотрудничество

G 8 (the Group of 8: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States) – страны «Большой восьмерки»

SCO (the Shanghai Cooperation Organization) – Шанхайская организация сотрудничества

Task III. Guess the meaning of these words and word combinations checking your guesses as you read the text:

domestic manufacturing global crisis to diversify and modernize industries

light-industry sector the catch Strategic Sectors

B. Reading and Comprehension Activities

Task IV. Read the text and check your understanding by doing the tasks that follow:

Russia ended 2008 with GDP growth of 6.0%, following 10 straight years of growth averaging 7% annually since the financial crisis of 1998. Over the last six years, fixed capital investment growth and personal income growth have averaged above 10%, but both grew at slower rates in 2008. Growth in 2008 was driven largely by non-tradable services and domestic manufacturing, rather than exports. During the past decade, poverty and unemployment declined steadily and the middle class continued to expand.

Russia also improved its international financial position, running balance of payments surpluses since 2000. Foreign exchange reserves grew from $12 billion in 1999 to almost $600 billion by end July 2008, which include $200 billion in two sovereign wealth funds: a reserve fund to support budgetary expenditures in case of a fall in the price of oil and a national welfare fund to help fund pensions and infrastructure development. Total foreign debt is approximately one-third of GDP. The state component of foreign debt has declined, but commercial short-term debt to foreigners has risen strongly.

These positive trends began to reverse in the second half of 2008. Investor concerns over the Russia-Georgia conflict, corporate governance issues, and the global credit crunch caused the Russian stock market to fall by roughly 70%. The global crisis also affected Russia’s banking system, which faced liquidity problems. Moscow responded quickly in 2008, initiating a rescue plan of over $200 billion that was designed to increase liquidity in the financial sector, to help firms refinance foreign debt, and to support the stock market. The Government also unveiled a $20 billion tax cut plan and other safety nets for society and industry.

In the first year of his term, President Medvedev outlined a number of economic priorities for Russia including improving infrastructure, innovation, investment, and institutions; reducing the state’s role in the economy; reforming the tax system and banking sector; developing one of the biggest financial centers in the world, combating corruption, and improving the judiciary. The Russian Government needs to diversify the economy further, as energy and other raw materials still dominate Russian export earnings and federal budget receipts. Russia's infrastructure requires large investments and must be replaced or modernized if the country is to achieve broad-based economic growth. Corruption, lack of trust in institutions, exchange rate uncertainty and the global economic crisis continue to dampen domestic and foreign investor sentiment.