Alexei Navalny, lawyer, blogger, and opposition activist, has a simple slogan for his campaign to become mayor of Moscow: Change Russia, start with Moscow. His program urges a broad spectrum of changes to legal, political, educational, and healthcare systems, but reform of Moscow’s and Russia’s economy underlie all of them.
Russia’s economy certainly could use a shot
in the arm. When Vladimir Putin first became president of Russia, the
economy was just beginning to emerge from the chaos of the 1990s. Putin
promised, rashly, to double GDP in ten years. If you pick the right
measure of GDP and the right years, he managed to do it. (See this earlier post
for details.) However, as the next chart shows, the Russian economy was
hit hard by the global crisis. In its best post-recovery year, 2010, it
grew at barely half the pre-crisis average. Year-on-year growth of real
GDP through the second quarter of 2013 has been just 1.2 percent. The
economy may have technically entered a recession in the second quarter,
although Bloomberg quotes Deputy Economy Minister Andrei Klepach as saying that there was no recession, only stagnation.
could the mayor of Moscow do about Russia’s GDP? More than one might
think. For one thing, the city of Moscow, all by itself, accounts for a
quarter of the country’s economic output—about the same share as the top
20 U.S. cities contribute to the American economy. More importantly,
though, Moscow exhibits all of Russia’s economic ills in microcosm.
Change there really could spark change throughout the country. >>>Read more