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Simiilarities and Diffierences Between Australian & Russian Economy

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Essay title: Simiilarities and Diffierences Between Australian & Russian Economy

Economic growth

The performance of the Russian economy since the 1998 crisis has been impressive. Between 1998 and 2005, Russian GDP expanded by an estimated 48 percent, while real incomes of the population grew by 46 percent. Poverty (headcount) rates were cut in half and regional disparities declined somewhat. The pace of growth began to slow in 2001 and 2002, along with the steady weakening of the factors the supported the initial growth, although a major strengthening of oil, gas, and other prices on Russia's commodity exports gave a new boost to economic growth since 2003. Modernization and productivity growth outside the oil and gas sector have also been important contributing factors to the recent expansion.

Russian economic growth in 2005 has been influenced by three primary factors: a continuing rapid expansion of domestic incomes and demand, improvements in the expectations of investors, and growing competitive pressures from the real appreciation of the ruble.

Australia is a relatively small economy, with a population of only 20 million people, and a national output that is ranked only just within the world’s top twenty. While Australia’s national output is well ahead of neighbours such as New Zealand and Indonesia, it is well behind the outputs of Japan, China, the United States and many European nations. The main reason why our economy is small is because of our small population. The Russian Federation, however, is a relatively large country yet suffered many economic downfalls during a period of time which has therefore attributed to its slightly under-developed economy.

Employment and Unemployment

Russia’s workforce totalled 78,374,600 people in 2003. Employment opportunities have changed radically as a result of the economic transition. Industry, for example, employed about 40 percent of the workforce in 1990, but only 29 percent in 1999. Meanwhile, the number of people employed in services increased rapidly. By 1999 this sector employed 59 percent of the workforce.

One of the Soviet system’s strengths was its commitment to mass education, and the population’s high level of education and skill has often been cited as a positive factor for Russia’s economic future. However, the 1990s fiscal crisis did serious damage to the educational system, and some analysts believe that the deterioration of the system may hamper the country’s economic revitalization.

Virtually unknown during the Soviet period, unemployment became a serious problem in the early 1990s. Estimates indicate that the national unemployment rate peaked at about 13 percent in 1999. The real level may have been considerably higher, because some employees who were counted as full-time workers actually worked only part time or not at all; even individuals who were not receiving wages often preferred to remain on the official rolls in order to obtain work benefits such as housing subsidies and social insurance. By 2002 the official unemployment rate declined to 8.6 percent, although some regions had much higher levels of joblessness.

The employment and unemployment rates for both countries are immensely varied. Despite Australia’s growth, it still has tended to have relatively high levels of unemployment. Russia’s unemployment rate however, is due to its preceding economic crisis.

Standard of Living/Quality of Life

In relation to ‘quality of life’, Australia and Russia are drastically contrasting. The Human Development Index is a popular measure of a country’s achievements in terms of life expectancy, educational attainment and adjusted real income. It has recently ranked Russia as the 60th best country to live in, and Australia as the 3rd. There is evidently as large difference between the two countries.

Russia has a unique contemporary history, full of political and economic changes. Serious economic crises in 1992 and 1998 are believed to have dramatically affected the quality of life. Australia on the other hand is believed to enjoy a quality of life amongst the highest in the world. It is one of the world’s most desirable places to live and to work

The city rankings for ‘the worldwide 2005 cost of living survey 2005’ indicate differences in the cost of living between Australian cities and Russia’s. Moscow, Russia’s capital city is ranked in 4th place and St Petersburg, another major city in 15th place. Australia’s highest ranking is Sydney in 20th position. However, Melbourne, Brisbane, Adelaide and Perth are also ranked within the top 100.Australia’s cost of living is what makes is such an attractive destination, items such as food, entertainment, school fees and health care are relatively low

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