g the 1990s, Russia became an emerging market country that badly needs a modernization breakthrough. How can the government of President Vladimir Putin attain this goal?The urge for modernization in Russia is stronger than in any other emerging market country. This former superpower lags further and further behind world leaders: Russias GDP now ranks only fourteenth in the world, and its social indicators are close to those of medium-income developing countries. Putin begins his rule during a strong economic recovery that follows a fourfold devaluation of the ruble in 1998 and a sharp rise in world oil prices. Throughout 2000, macroeconomic and industrial indicators are likely to remain favorable, with GDP expected to rise by 4-5 percent if oil prices stay close to $30 a barrel. In view of this good economic mews, is achieving a modernization breakthrough really that important for Russia? The answer is definitely yes, because, during 2003-05, Russia may experience shortages of natural resources, and its efforts to boost economic growth may be hampered by the continued decay of its industries. The more an economic takeoff is delayed, the more difficult it will be for Russia to catch up with the advanced nations. Leading experts estimate that $2 trillion will be required in the next 20 years to modernize Russias production facilities, infrastructure, and labor force. If modernization efforts begin today, it will take from 15 to 30 years for Russia t catch up with the Westand that is if the Russian economy grows at 6-8 percent annually. Putin thinks the backwardness in information industry will lead to the lag in all other industries, so Russia should push up the development of information technology. Presently, resource and war industries are still the leading parts of national economy, so the government should show adequate emphasis upon these industries and increase the export of these products so as to accumulate en...
