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Russia Fast Facts

Russia is located in Northern Asia (the area west of the Urals is considered part of Europe), bordering the Arctic Ocean, between Europe and the North Pacific Ocean. Russia’s land area is 16,377,742 sq km which makes it the world’s largest country by size. Russia is not densely populated in many areas. With a population of 139,390,205 (July 2010 est.), Russia is the world’s 9th largest country by population size.

Russia Economy and GDP

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a globally-isolated, centrally-planned economy to a more market-based and globally-integrated economy. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy and defense-related sectors. Nonetheless, the rapid privatization process, including a much criticized "loans-for-shares" scheme that turned over major state-owned firms to politically-connected "oligarchs", has left equity ownership highly concentrated. The protection of property rights is still weak and the private sector remains subject to heavy state interference.

Russia’s economy is estimated to have a GDP of $2.116 trillion (2009 est. in US dollars) which makes it the world’s 8th largest economy when measured in terms of Purchasing Power Parity (PPP).

Russian industry is primarily split between globally-competitive commodity producers – in 2009 Russia was the world's largest exporter of natural gas, the second largest exporter of oil, and the third largest exporter of steel and primary aluminum – and other less competitive heavy industries that remain dependent on the Russian domestic market.

This reliance on commodity exports makes Russia vulnerable to boom and bust cycles that follow the highly volatile swings in global commodity prices. A revival of Russian agriculture in recent years has led to Russia shifting from being a net grain importer to a net grain exporter. The economy had averaged 7% growth since the 1998 Russian financial crisis, resulting in a doubling of real disposable incomes and the emergence of a middle class.

The Russian economy, however, was one of the hardest hit by the 2008-09 global economic crisis as oil prices plummeted and the foreign credits that Russian banks and firms relied on dried up. The Central Bank of Russia spent one-third of its $600 billion international reserves, the worlds third largest, in late 2008 to slow the devaluation of the ruble. The economic decline appears to have bottomed out in mid-2009 and by the second half of the year there were signs that the economy was growing, albeit slowly.

Investing in Russia and Russia’s Economy

There are many ways to invest in Russia ranging from Russian stocks traded internationally, Exchange Traded Funds (ETFs) specific to Russia, commodities linked to Russia, or including Russia as part of the BRIC region. We have focused on commodity plays, and Russian commodity producers, as the most practical way to invest in Russia’s economy and Russian growth.

Investors seeking to learn more about investment opportunities in Russia should click below: