Old Saint Basil's Cathedral in MoscowJohnson's Russia List title and scenes of Saint Petersburg
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#25 - JRL 2008-217 - JRL Home
24 November 2008
Russias Path: Boom or Bust
Russia has potential but faces multiple constraints, report says
The following is an excerpt from the U.S. National Intelligence Council report Global Trends 2025: A Transformed World. For more information, see the America.gov article Worlds Best Thinkers Predict Resource Scarcity in 2025.

(begin excerpt)

Russias Path: Boom or Bust.

Russia has the potential to be richer, more powerful, and more self-assured in 2025 if it invests in human capital, expands and diversifies its economy, and integrates with global markets. On the other hand, multiple constraints could limit Russias ability to achieve its full economic potential. Chief among them are a shortfall in energy investment, key infrastructure bottlenecks, decaying education and public health sectors, an underdeveloped banking sector, and crime and corruption. A sooner-than-expected conversion to alternative fuels or a sustained plunge in global energy prices before Russia has the chance to develop a more diversified economy probably would constrain economic growth.

Russias population decline by 2025 will force hard policy choices. By 2017, for example, Russia is likely to have only 650,000 18-year-old males from which to maintain an army that today relies on 750,000 conscripts. Population decline also could take an economic toll with severe labor force shortages, particularly if Russia does not invest more in its existing human capital, rebuild its S&T base, and employ foreign labor migrants.

If Russia diversifies its economy, it could develop a more pluralistic, albeit not 32 democratic, political systemthe result of institutional consolidation, a rising middle class, and the emergence of new stakeholders demanding a greater voice.

A more proactive and influential foreign policy seems likely, reflecting Moscows reemergence as a major player on the world stage; an important partner for Western, Asian, and Middle East capitals; and a leading force in opposition to US global dominance. Controlling key energy nodes and links in the Caucasus and Central Asiavital to its ambitions as an energy superpowerwill be a driving force in reestablishing a sphere of influence in its Near Abroad. Shared perceptions regarding threats from terrorism and Islamic radicalism could align Russian and Western security policies more tightly, notwithstanding disagreements on other issues and a persisting values gap. The range of possible futures for Russia remains wide because of starkly divergent forcesliberal economic trends and illiberal political trends. The tension between the two trends together with Russias sensitivity to potential discontinuities sparked by political instability, a major foreign policy crisis, or other wild cards makes it impossible to exclude alternative futures such as a nationalistic, authoritarian petro-state or even a full dictatorship, which is an unlikely but nevertheless plausible future. Less likely, Russia could become a significantly more open and progressive country by 2025. (end excerpt)

The full text of the study (PDF; 34 MB) is available on the National Intelligence Council Web site: