Russia’s economy may have its problems, but the country’s size, plus the enormous boom its energy industry has enjoyed have combined to make Russia the 10th largest economy in the world, by overall size. The Economist Intelligence Unit (they of The Economist magazine fame) estimate that Russia’s economy in 2006 was worth $986.6 billion, a startling $223.3 billion increase on the previous year.
The Russian government is, as you’d expect, bullish:
Russian First Deputy Prime Minister Dmitry Medvedev said Saturday, Jan. 27, that the nation’s GDP topped $1 trillion and it will become the world’s 6th largest economy, overtaking Italy, France and Britain in two years.
Presumably he’s basing this prediction on a continued rapid increase in oil and gas revenues. I think he’s perhaps being a little too optimistic (to put it mildly), but we’ll see. Check back in 2009.
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The two key points that are being missed here are:
(a) Data about Russia’s economy relies upon information being provided by a clan of proud KGB spies who have every reason to lie about how well they’re doing, and
(b) That even if Russia DID have an economy the same size as that of France, it has THREE TIMES more people than France, so French people would still be three times richer than Russians (to say nothing of not having to live under the rule of a clan of KGB spies).
Moreover, of course, since at least a quarter and probably a half of Russia’s GDP growth is because of the inflated price of oil, what goes up can just as easily come down.
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