Russia was ranked 38th among the 138 countries surveyed in the World Economic Forum’s Global Competitiveness Report published on September 26, moving up five places and “rebounding strongly from the 2015–16 recession”. This made a faster advance than moving up by only 2 places in 2016.
In a separate ranking, for the World Bank’s Doing Business 2016 report, President Vladimir Putin has set a target for Russia to be in the top 20 best countries to do business in by 2018. When Putin set this goal Russia was ranked 121 but in last year’s ranking in 2016 it narrowly missed taking the 51st slot among 189 countries after climbing 11 places in the previous year.
The latest Global Competitiveness Report notes that despite the progress, Russia’s economy remains highly dependent on mineral exports and its prospects remain uncertain.
The weak links in Russian economy include the financial market (ranked 107th), in particular the banking sector, the report said, joining Fitch Ratings and Standard & Poor’s in their concerns over banking stability and the cost of the ongoing banking sector clean-up.
Other weak categories include aspects of institutional quality such as property rights (106th), judicial independence (90th), and corruption, which remains one of the most problematic factors for doing business.
“Russia has passed new laws to increase the minimum wage (2015) and protect temporary employment (2016), which have lowered labor market flexibility (75th, down 18 places),” the report also notes, while admitting that this “may have a beneficial overall effect by restoring domestic purchasing power.
Compared to last year’s survey, the macroeconomic environment improved the most (50th position), with Russia traditionally scoring strongly in market size (6th place), higher education and training (32nd), and infrastructure (35th).
Another international rating, the 2017 Economic Freedom Index compiled by the Heritage Foundation in February, placed Russia at the 114th position in the ‘Mostly Unfree’ category (countries from 93rd to 157th rank) with a score of 57.1 of 100.
Although compared with last year’s survey Russia’s score gained 6.5pp, the report by the conservative US think tank commented that the country’s economy is “severely hampered by blatant disdain for the rule of law and for the concept of limited government”.