You have been hired as a consultant by the Ministry of Trade and Development for the Russian federation. Identify the country's potential strengths and weaknesses. By using an appropriate tool of your choice make specific recommendations on policy design for the federation. It is well known that Russia has achieved a notable technological impact during the last forty years due to competition with other nations, which has created a strong concentration on innovation and creation in different spheres as well as simultaneously solving many problems that the country had to face.
In today's economic crisis around the world, Russian banks haven't been exposed to a lot of the financial sophistication that developed-market banks and global financial institutions have been exposed to in 2008 (Aenlle, 2008). However in order to strengthen the developing country and its economy, trade and development must be analysed in the context of PEST factors. By carrying PEST analysis, certain overview of the different macro environmental factors that the country has to take into consideration will be identified (Dibb & Simkin, 2004).
It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. This research analysis will also aid in identifying strengths and weaknesses in current Russia's trade and development. At the present some Russia's strength lie in the reserves of natural resources like oil, natural gas, metals, wood and other. As well as energy exports currently play an important role as a source of foreign exchange (Curtis, 1996). Ironically some of the crucial weaknesses lie in misuse of these resources.
In this essay by means of using PEST and SWOT analysis business tools, Russian Federation strengths and weaknesses will be identified in order to be analysed that will assist in drawing upon conclusions that consequently will be used to consult The Ministry of Trade and Development in context of policy design. Since 1999 the BRIC, currently developing countries became the main capital exporters of the developed countries and at the rapid rate became exporters of manufacturing production.
This has occurred due to their successful Global integration and via the change in the politics of macroeconomics by concentrating on increased importance of the competitive exchange rates. However the uncertainty and instability in international monetary and raw material markets brings gloomy perspectives to the development of world economy and therefore can slow the future economic development of developing countries.
In order to insure rapid growth it might be necessary to increase in addition official financial support to continue development and not only in order to compensate lack of finance in the interests of curing social problems and problems of development of human potential within the limits of United Nations Development Programme (UNDP, 2008), but also to promote maintenance of high growth rates of capital income and employment for steady maintenance in the future which is a threat.
At the moment The BRIC nations expecte GDP increase of 0. 6% for 2009. Latest massive oil trade deal between Russia and China confirms the economic potential of the BRIC nations (Gonzalez, 2008). The opportunities for growth together with the natural resources in these countries will attract a lot of investment in the near future which is strength for trade and development.
Important questions to consider are the once that reflect major problems with which the largest economic associations have collided during their progress. The European Community as of today represents the powerful grouping, capable to resist to such giants as the United States or Japan though each of its members separately concedes to them on the basic economic performance. However the Europe had to experience serious difficulties before to come to consolidation.
Whether Russia should deal with same problems, for better understanding of indispensability and advantages of integration, or is it better to learn and not repeat the mistakes of fellow countries, which therefore creates strength for Russia. As a whole the last decade economic development can be characterized by strengthening of processes of integration and globalization (Bairoch and Kozul-Wright, 1996).
As if for Russia, if the reasonable foreign policy in the future will allow to create preconditions if not for connection to the EU countries-members, then for creation of the general economic space. It will undoubtedly beneficially affect a condition of economy in the country. As other priority close relationship building with the CIS countries (Commonwealth of Independent States) – historical partners of Russia in world trade, should be considered in order to gain allies. Long-term foreign experience can render Russia an invaluable help.