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

1. Wartime Economy:
   • Demand for weapons and military services.
   • Higher paid military recruits from poorer regions.
2. 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.