How Domestic Trends in the U.S., China, and Iran Could Influence U.S. Navy Strategic Planning

By John Gordon IV; Robert W. Button et al. | Go to book overview

CHAPTER NINE
Russia’s Near Abroad

This chapter discusses the status of Russia’s current domestic situation and its relations with its neighbors. First we examine the current state of the Russian economy, the role of hydrocarbons as drivers of present (and future) Russian growth, and current developments in domestic politics. Then we explore Russia’s relations with Europe, China, and Japan. Finally, we review future challenges and potential impediments—most of which are domestically rooted—to further economic development and their implications for Russia’s relations with its near abroad.


The Current Situation

Russia has recovered from the 1998 financial crash that caused it to devaluate the ruble and to default on its foreign debt commitment. Russian aggregate GDP grew an average of 6.1 percent per year in real terms between 2000 and 2005. Because of falling population, per capita GDP grew even more rapidly (at 6.6 percent each year). According to the International Monetary Fund, Russian GDP hit $1 trillion in 2006, which puts the country back in the group of the world’s ten-largest economies. Despite its rapid growth, however, Russia is still a small economy compared to that of the United States (see Table 9.1). In 2006, the Russian economy was the l4th-largest economy and amounted to one-thirteenth (less than 8 percent) of the U.S. economy.

These figures are somewhat different when the comparison is done on a PPP basis, in which data are adjusted to reflect the generally lower

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