Russia’s Economic Reform Outlook

Abstract

The author reviews the process of economic reforms in the Russian Federation in 2004-2005 and assesses reform perspectives for the period of 2006-2008. In most of the reform areas Russia is still a long way from the level of OECD countries: outcomes for 2004 demonstrate that during 2003-2004 Russia joined the economies in transition with the slowest pace of reforms. The article analyzes the possibilities and obstacles for continuation of reforms within the next three years. The author concludes that in the mid-term perspective the pace of Russian economic reforms is unlikely to accelerate. There is a close positive connection between the pace of reforms and the rate of economic growth in transition economies; therefore, the slow pace of reforms will contribute to deceleration of economic growth. Consequences of the reform slowdown will become most visible beyond 2008.