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Russia's Economic Status and High-Income Classification by the World Bank: A Lecture Overview
Jul 7, 2024
Russia's Economic Status and High-Income Classification by the World Bank: A Lecture Overview
Introduction
Focus on one SEO member: Russia.
Russia's economy received a positive outlook from the World Bank.
Russia is marked as a high-income country despite ongoing war and sanctions.
Historical Context
Last achieved high-income status in 2014, the year of Crimea invasion.
Western sanctions since 2014; Russia initially felt the brunt but adapted over the decade.
High-Income Classification
Determined by Gross National Income (GNI) per capita.
Difference between GDP and GNI:
GDP
: Economic output within national borders.
GNI
: Includes international income (remittances, overseas business earnings).
Russia's GNI rose in 2023, crossing $14,000 per capita.
Factors Contributing to Economic Growth
Wartime Economy
:
Demand for weapons and military services.
Higher paid military recruits from poorer regions.
Sanctions and Trade Adaptation
:
West-imposed sanctions mainly affected trade with US, UK, EU.
Russia pivoted trade towards China, North Korea, Iran, India, Gulf States, African nations.
Russia's trade rebounded by 7% last year.
GNI per capita grew by over 11%.
Comparative Economic Growth
Russia's GDP growth: 3.6% last year.
Comparison:
United States: 2.5%
United Kingdom: 0.1%
Australia: 3%
Russia's economic performance surpasses all sanction-imposing nations.
Conclusion
Russia's adaptation and reliance on global South have defied expectations.
Significant growth despite geopolitical and economic challenges.
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