Aniket.D.

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Global Country Report

Pestle Analysis Russia :-

For each of the 8 countries we're covering, we'll start off with
topline statistics as sort of a summary, or more of a launching pad
for further exploration. We'll start with Russia, partly because this
may be the last 5-year period that it is included in the top 10
international powers. Out of all the 8 countries I will look at
individually, Russia faces the most daunting challenges. They
have faced worse--I would hate to be a centenarian from Russia--
but I doubt if they have the resources or leadership to avoid a
sharp general decline over the next five years.

Most numbers here are from Wikipedia or the CIA World Factbook,
with a little Nationmaster thrown in.

GDP: 8th in the world 2009, 1.75 trillion

Population: 9th in the world, 142 million

Military expenditures: 5th in the world, $50 billion

The Russian Federation just finished a spectacular decade,

averaging 7% annual growth since 1998. But at the end of that
spectacular decade, their average income is $640 per head, their
life expectancy is 66, and they only average 14 years of
schooling. They really needed to make better use of the Golden
Decade.

Russia is extremely dependent on exporting natural resources,

especially natural gas and oil. The price of those are falling. So is
their population--it's declined 5% since 1993 and although it is
slowing it shows no sign of reversing. Alcoholism, drug addiction
and AIDS are taking a heavy toll on Russia. Inflation is high, at
12%, and unemployment looks to increase from its current 6%.
They've already blown through a good chunk of the petro-dollars
they had put aside, and the current economic crisis is not going to
be kind to Russia.

Seems pretty clear that Vladimir Putin is very much running the
show, with President Medvedev along for the ride. This suits the
Russians just fine--but it shouldn't. A decade of rising oil prices
made Putin look a lot better than he really is.
Their levers of power are the energy they supply to much of the
EU and their stockpile of nuclear weapons (They are 5th in
military spending, with $50bn annually, less than 10% of the
U.S.). On the perceived corruption index, they rank #129,
between Niger and Sierra Leone. On business efficiency, they are
ranked 45th out of a total of 51 countries, and sit between Italy
and Romania.

Their environment's a bit of a mess, with a lot of leftover waste

from the Cold War, the oligarchic exploitation of resources, and
some stuff left over from WW2. As Nationmaster lists them, "air
pollution from heavy industry, emissions of coal-fired electric
plants, and transportation in major cities; industrial, municipal,
and agricultural pollution of inland waterways and seacoasts;
deforestation; soil erosion; soil contamination from improper
application of agricultural chemicals; scattered areas of
sometimes intense radioactive contamination; groundwater
contamination from toxic waste; urban solid waste management;
abandoned stocks of obsolete pesticides". They can survive this
because the country's so big.

As for technology, they can't run their oil companies without

Western help--but they're trying. They export nuclear technology
and have good competence there. But Russia only has one
university in the top 100, so long term prospects for
entreprenurial excellence are dim.

I hate to be so bleak--maybe when we look in greater depth we'll

see reason for hope for this country--they certainly have shown
themselves to be resilient, if nothing else.
PESTLE highlights :-

Political landscape

In July 2009, President Medvedev and Barack Obama reached an

agreement to cut back their countries' stockpiles of nuclear
weapons. Russia also supported the US decision to shelve
controversial missile defense bases in Poland and the Czech
Republic.

In April 2010, Ukraine and Russia signed an inter-governmental

protocol on the supply of goods on industrial cooperation in 2010.
The sides also signed protocols on cooperation in the aviation
industry and on industrial policy.

Economic landscape :-

Although, the country managed to maintain 6% growth in 2008,

the Russian economy contracted by 8% in 2009. With the
prevailing economic deterioration, the government has drawn
policies to reduce budget deficit which was about 6% of GDP in
2009 to around 3% by 2012.

The insurance market in Russia has grown continuously for the

last five years, despite sharp declines in the life insurance
segments value since 2003. The Russian insurance market
generated a gross premium income of $36.9 billion in 2008,
representing a compound annual growth rate (CAGR) of 18.4% for
the period spanning 2004-2008.

Social landscape
Income inequality in Russia has widened in the post-liberalization
period. The difference between the 10% richest and 10% poorest
among the population in Moscow was over 42 times in 2008
compared to 38.6 times in 2005.
Even though the country went through a severe economic crisis
during 2009, the government was able to carry out large-scale
anti-crisis measures without any cuts in social spending. The
actual social spending increased by over 27% in 2009 compared
to that of 2008.

Technological landscape

Russia has been historically known for its excellence in space

technologies and is one of the most successful countries with
regards to its implementation of many space programs. The
government has allocated more than $11 billion for the Russian
Space Agency for the period 200615.

The country's IT market is presently the fastest-growing in the

Central and East European (CEE) region. There is huge potential
for IT spending by Russia's traditional industries to make their
conventional systems of operations IT compliant.

Legal landscape

The new government has set a long list of legal reforms which are
expected to bring improvement to the countrys judicial system.

Russia has also agreed to various legal assistance programs from

many countries to solve its domestic and international legal
issues.

Environmental landscape

The Russian government is planning to set up an effective

security system to prevent pollution and man-made
environmental disasters. The main tasks outlined by the
government include implementation of environmental decisions
consistently and completely, and the creation of an effective
system for ecological security in the country.