Is Russia Sick with the Dutch Disease?

Victoria Dobrynskaya and Edouard Turkish
Authors registered in the RePEc Author Service: Édouard Turkisch ()

Working Papers from CEPII research center

Abstract: Despite impressive economic growth between 1999 and 2007, there is a fear that Russia may suffer the Dutch disease, which predicts that a country with large natural resource rents may experience a de-industrialisation and a lower long term economic growth. We study whether there are symptoms of the Dutch disease in Russia. Using Rosstat and CHELEM databases, we analyse the trends in production, wages and employment in the Russian manufacturing industries, and we study the behaviour of Russian imports and exports. We find that, while Russia exhibited some symptoms of the Dutch disease, e.g. a real appreciation of the rouble, a rise in real wages, a decrease in employment in manufacturing industries and the development of the services sector, manufacturing production nonetheless increased, contradicting the theory of the Dutch disease. These trends can be explained by the gains in productivity and the recovery after the disorganisation in the 1990s, by new market opportunities for Russian products in the European Union and in CIS countries, by a growing Chinese demand for some products and by a booming internal market. Finally, investments in many manufacturing industries were largely encouraged, whereas those in the energy sector were strongly regulated, which contributed to economic diversification.

Keywords: RUSSIA; DUTCH DISEASE; COMPETITIVENESS; MONETARY POLICY (search for similar items in EconPapers)
JEL-codes: E23 E58 F43 P24 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-cis, nep-ene, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2009-20

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