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Article
Publication date: 6 June 2019

Daniel J. McCarthy, Sheila M. Puffer and Daniel M. Satinsky

The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet…

Abstract

Purpose

The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet institutions collapsed and were either reformed or replaced in a new Russian institutional landscape. The paper presents a fact-based and balanced view of Russia’s evolving role in the global economy, as distinguished from the sometimes one-sided view presented by some Western commentators. The authors establish that the two countervailing views are fundamentally based on different cultural perspectives about institutions, primarily the roles of business and government.

Design/methodology/approach

This paper is developed as a perspectives article drawing upon the decades of academic and business experience of all three authors with Russian business, management and the economy. The paper focuses on the structure of Russian institutional change and places it within the historical context of the challenges of various periods of time from the late 1980s to the present. The authors posit that cultural foundations complicate that institutional evolution.

Findings

Russia will remain a major player in world markets for energy, raw materials and armaments for the near future at least. Principal institutional questions facing Russia have to do with how to reduce the country’s overall dependence on raw material exports, with its vulnerability to world market fluctuations, and how to modernize Russian economic and political institutions. The degree of success in addressing these questions will depend largely upon the ability of the new and reformed economic institutions to show the flexibility to respond to changes in the global order, on whether political considerations will continue to supersede economic issues, and how markedly cultural traditions will continue to impede positive changes.

Research limitations/implications

The entire system of international trade is under question, disrupted by the growing nationalism that is threatening the globalization that became institutionalized over decades in the wake of the Second World War. Russia’s future role is partially dependent upon how new patterns of international trade develop in response to the current disruption of established trade regimes, and by how political conflicts are expressed economically. The authors observe that Russia’s historical and cultural traditions, especially acquiescence to a highly centralized government with a strong autocratic leader, limit the country’s options. The authors explore how Russia’s reactions to Western sanctions have led to a new strategic approach, moving away from full engagement in the global economy to selective economic, and sometimes political, alliances with primarily non-Western countries, most notably China. The authors contrast Russia’s situation with that of China, which has been able to make substantial economic progress while still embracing a strong, centralized political institutional structure.

Originality/value

Many Western analysts have viewed Russian institutional evolution very critically through the lens of Western politics and sanctions, while Russia has continued along its own path of economic and institutional development. Each view, the authors argue, is based upon differing cultural perspectives of the roles of business and government. As a result, a distinct difference exists between the Western and Russian perspectives on Russia’s role in the world. This paper presents both points of view and explores the future of Russia’s position in the world economy based upon its evolving strategy for national economic policy. The authors contrast the situations of Russia and China, highlighting how Western-centric cultural views have affected perceptions of each country, sometimes similarly and at times with decided differences.

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Executive summary
Publication date: 19 May 2015

CAUCASUS/CENTRAL ASIA: Oil prices, Russia will hurt

Details

DOI: 10.1108/OXAN-ES199691

ISSN: 2633-304X

Keywords

Geographic
Topical
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Executive summary
Publication date: 26 February 2015

KAZAKHSTAN: Early election to allow 'safe' transition

Details

DOI: 10.1108/OXAN-ES197952

ISSN: 2633-304X

Keywords

Geographic
Topical
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Executive summary
Publication date: 2 September 2015

KAZAKHSTAN/CHINA: Ties set to strengthen further

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Book part
Publication date: 24 November 2017

Anna Abramova and Olga Garanina

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening…

Abstract

Purpose

Economic sanctions imposed by the EU and United States on Russia have brought significant changes into Russian foreign economic policy, in particular leading to deepening cooperation with Asian countries and China in particular. The present contribution aims to shed light on the influence of sanctions on Russian multinational enterprises (MNEs) internationalization toward China using the example of energy and information and communication technology (ICT) industries.

Methodology/approach

The chapter builds on case study analysis. The choice of sectors allows us to highlight the recent strategic trends in the internationalization of oil and gas industry, dominated by state-owned multinationals, and in ICT by privately owned companies.

Findings

Our results provide empirical data for understanding the influence of sanctions on MNEs from the country being under the sanctions. In the case of Russian oil and gas industry and ICTs, research indicates that the shift toward China was not initiated primarily by the sanctions. In both cases, expansion to Asian markets was correlated with business interests in the Chinese market. However, changes in geopolitical and macroeconomic business environment accelerated Russian MNE’s pivot to China, for the purposes of attracting capital and reaching new markets in context of deteriorating relations with western partners. The cases demonstrate a moderating role of the industry in the context of sanctions, helping compensate for the slowdown of economic relations with traditional partners.

Originality/value

The novelty of the chapter is to delineate the consequences of sanctions on MNEs from the country being under sanctions. In this way, it illustrates the role of geopolitical environment in intensifying internationalization of Russian MNEs toward China.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

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Book part
Publication date: 6 November 2018

Bruno S. Sergi and Andrey Berezin

The chapter considers the significance of the oil and gas industry for the Russian economy. The authors analyze the current state of the oil and gas industry, their…

Abstract

The chapter considers the significance of the oil and gas industry for the Russian economy. The authors analyze the current state of the oil and gas industry, their specific weight in the structure of Russian GDP, and tax revenues from this industry to the Russian budget that was estimated. We give scenario analysis that considers the problems that the Russian economy may face because of the sanctions, the price fluctuations at the commodity market, and the crisis phenomena in the world economy. The chapter points out that localization of technology production and development of technologies for offshore oil and gas production in the Arctic zone may become an incentive to further ensure import substitution for Russia. At present, the experience of Arctic defense enterprises in the production of equipment for oil and gas production and processing is becoming increasingly popular. The chapter elaborates the most significant examples of the creation of new industries in the Arctic zone, the prospects of seismic exploration on the Arctic shelf, and that localization of production capacities and service bases will allow obtaining a multiplicative incentive for a qualitatively new industrial and infrastructure development of the northern territories. Also, we provide an assessment of the development of liquefied natural gas (LNG) industry, which makes economically attractive use of natural gas on a regional level as LNG opens the way to fuel high-power needs and to long-distance transport.

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Abstract

Details

Energy Economics
Type: Book
ISBN: 978-1-83867-294-2

Abstract

Details

Dynamic Linkages and Volatility Spillover
Type: Book
ISBN: 978-1-78635-554-6

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Article
Publication date: 10 April 2017

Ilya Kuzminov, Alexey Bereznoy and Pavel Bakhtin

This paper aims to study the ongoing and emerging technological changes in the global energy sector from the frequently neglected perspective of their potential…

Abstract

Purpose

This paper aims to study the ongoing and emerging technological changes in the global energy sector from the frequently neglected perspective of their potential destructive impact on the Russian economy.

Design/methodology/approach

Having reviewed existing global energy forecasts made by reputable multilateral and national government agencies, major energy corporations and specialised consulting firms, the authors noticed that most of them are by and large based on the extrapolation of conventional long-term trends depicting gradual growth of fossil fuels’ demand and catching-up supply. Unlike this approach, the paper focuses on the possible cases when conventional trends are broken, supply–demand imbalances become huge and the situation in the global energy markets is rapidly and dramatically changing with severe consequences for the Russian economy, seriously dependent on fossil fuels exports. Revealing these stress scenarios and major drivers leading to their realisation are in the focus of the research. Based on the Social, Technological, Economic, Environmental, Political, Values (analytical framework) (STEEPV) approach, the authors start from analysing various combinations of factors capable to launch stress scenarios for the Russian economy. Formulating concrete stress scenarios and assessing their negative impact on the Russian economy constitute the next step of the analysis. In conclusion, the paper underlines the urgency to integrate stress analysis related to global energy trends into the Russian national systems of technology foresight and strategic planning, which are now in the early stages of development.

Findings

The analysis of global energy market trends and various combinations of related economic, political, technological and ecological factors allowed to formulate four stress scenarios particularly painful for the Russian economy. They include the currently developing scenario “Collapse of oil prices”, and three potential ones: “Gas abundance”, “Radical de-carbonisation” and “Hydrogen economy”. One of the most important conclusions of the paper is that technology-related drivers are playing the leading role in stress scenario realisation, but it is usually a specific combination of other drivers (interlacing with technology-related factors) that could trigger the launch a particular scenario.

Research limitations/implications

This study’s approach is based on the assumption that Russia’s dependence on hydrocarbons exports as one of the main structural characteristics of the Russian economy will remain intact. However, for the long-term perspective, this assumption might not hold true. So, new research will be needed to review the stress scenarios within the context of radical diversification of the Russian economy.

Practical implications

This paper suggests a number of practical steps aimed at introducing stress analysis as one of the key functions within the energy-related sectoral components of the Russian national systems of technology forecasting and strategic planning.

Originality/value

The novelty of this paper is determined both by the subject of the analysis and approach taken to reveal it. In contrast to most of research in this area, the main focus has been moved from the opportunities and potential benefits of contemporary technology-related global energy shifts to their possible negative impact on the national economy. Another important original feature of the approach is that existing global energy forecasts are used only as a background for core analysis centred around the cases when conventional energy trends are broken.

Details

foresight, vol. 19 no. 2
Type: Research Article
ISSN: 1463-6689

Keywords

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Abstract

Details

Energy Economics
Type: Book
ISBN: 978-1-83867-294-2

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