Russia economy had been downturn for two decades because of disordered reform and  increased corruption.  In 2007, Russia faced a budget deficit from 2% to 10% that led to the financial crisis. Thus the Russia economy grew slowly from 7% a year. In addition, Russia gas export revenue was under threat from the world gas surplus, which caused by the achievement of new technology. Immediately, Russian demand of oil, gas, and metals were rising rapidly. It caused more revenue gushing into a treasury. After that, Russian foreign exchange had been declining sharply in 2008. Investors had pulled out $211 billion of the country and it was also not easy to get a fix at this time on what Russia growth rate. Indeed, Foreign Direct Investment (FDI) was one of the biggest problems that the Russian government was concerned.  Russia’s foreign direct investment was drying up as the global credit squeeze reduced investors. It led the Russian’s real economy was shrinking very fast under the weight of all these. Many service industries and manufacturers shrank by almost 8%.  For these reasons the Russian government needs to change their economy. 

Will WTO entry help Russia economy?

 Russia became the 155^th member of World Trade Organization (WTO) on December 16, 2011. It means Russia has already brought many of its laws on international trade in line with WTO procedure such as anti-dumping law and countervailing duties, which were replaced by the WTO. WTO rules will move the Russia economy toward and raise the living standard that will lead to reduce poverty. As Russia became a WTO member, import tariff has been reduced on goods entering Russia from 10% to 7%. It will lead to lower prices for consumers because of uncompetitive Russian factories and farms. Furthermore, WTO non-discrimination rules will increase the level of Russian’s foreign direct investment that leads to increase jobs. Also, transport costs and foreign made goods will be stable.

In my view, although Russian became a member in WTO, Russian industries may suffer from WTO entry in the short term. The government should find out the way to protect the important industries such as agriculture, automobile industries, and agriculture equipment manufacturer. As a WTO member, Russia must negotiate about the lowering tariffs on goods and continuing to make a commitment towards greater liberalization in services and energy. Also, Russia has to open its attractive sector (a private financial) and fighting corruption because it will allow the foreign investors to invest in Russia.