GDP


GPD of Russia:

According to the World Bank, Russia's GDP is primarily made up of Agriculture (4% of GDP),  the industrial sector (36%), and industrial services (60%).  Russia's GDP is also heavily reliant on the prices of commodities, particular energy. Although Russia's economic growth was slow in the early 1990's due to large political dislocations, the boom in commodities prices (especially oil) was responsible for Russia's economic growth between 2000 and 2008. More recently (2013- present), the decline in oil prices, geopolitical pressures, and sanctions imposed by European nations have lead to a decline in GDP.  The fall in GDP was further worsened by rapid inflation as well as poor domestic business sentiment causing stagflation. Some argue that Russia's state-controlled industries cause more inefficient production methods as well as systemic issues such as corrupt thus negatively contributing the Russia's GDP. Because of these factors, Russia's economy is in a deep recession. Overall, Russia's economy is very vulnerable to global commodities prices and geopolitical events. These issues could slow long-term growth, and to maintain a stable economy Russia needs to achieve more sustainable growth

Agriculture:

Agriculture has been limited to only 4% of Russian GDP due to harsh geographic conditions and weather. Agriculture is restricted to only a few small areas due to environmental factors thus limiting its role in Russia's overall GDP. However, Russia's agricultural industry does account for10% of Russia's labor force making it a significant portion of the overall economy. The agriculture sector is made up of both smaller farms where small land holders produce for self-sustenance, as well as large commercial producers. According to the World Bank, the sector includes forestry, hunting, fishing, cultivation of crops, and livestock production.

Industrial Sector
Image result for Russian industry

The contribution of the industrial sector to the GDP has been between 32 - 37% in Russia since 2000. The sector includes mining, manufacturing, construction, electricity, water, and gas. The sector currently is responsible for employing 27% of the Russia's population. This industry relies on Russia's natural resources which include oil, natural gas, timber, tungsten, iron, gold, platinum, tin, copper, and titanium. The leading industries within the sector are machine building/manufacturing which because of a severe shortage of capital and disruption of the USSR's economic system decline. However, in the early to mid-2000's the industry recovered with the petrochemical industry being the second largest contributor to GDP. Furthermore, Russia's  FEC (fuel and energy complex) is even more crucial for the economy because it supports other industries with its products being Russia's main exports. However, Russia's industrial sector has been faced with competition on the world scale which may inhibit some of its trading relationships. According to Ernst & Young Report, A large number of products with higher added value (such as specialty composites and additives) are not produced in Russia. China and Europe, for example, produce about 25% and 20% of the world’s primary plastics, respectively, while Russia produces only 2%.”


Service Sector
The service sector in Russia has experienced the greatest growth over the last decade. Since 2001 to 2015, it grew from 38% of GDP to nearly 60%. The key segments of the sector include financial services, communications, travel, tourism, advertising, marketing and sales, real estate, healthcare,  and IT services. 
Most of these industries have relied on a more capitalist economy in Russia where the devasted agriculture and industry gave the service industry room to grow through new employment opportunities and investment. However, limited property rights and government intervention in key institutions (especially in the financial sector) may slow growth or create economic inefficiency. 

Ukraine

Ukraine's GDP is primarily driven by agriculture (14.1%), industry (26.3%), and services (59.3%). Ukraine's economy and GDP growth remains fragile and limited. Disruptions caused by political chaos limit the country's production and export capacities. Recently, Russia's annexation of Crimea has led to further political disruption because Crimea was a powerhouse for the tourism industry and limited confidence in Ukraine's ability to recover from economic and political instability.  Fiscal policy has also deteriorated with public deficit and debt rising sharply negatively impacting GDP.  Economists expect that opening the economy to western countries and a strong anti-corruption commitment may also improve GDP growth.

Agriculture
Image result for russian farmingThe primary products produced in Ukraine' agriculture industry are grain, sugar, beets, sunflower seeds, vegetables, beef, and milk. When Ukraine was under USSR control, it served as the agricultural base for the entire Soviet Union. Fertile soil and ample amount of farmland allowed this industry to remain a large portion of the overall GPD in Ukraine. 


Industrial Sector

The industrial sector in Ukraine primarily produces coal, electric power, ferrous and non-ferrous metals,  machinery and transport equipment, chemicals, and processed food.


Services Sector
The key segments of the sector include financial services, communications, travel, tourism, advertising, marketing and sales, real estate, healthcare,  and IT services. The services sector is expected to have grown because of a movement away from Ukraine's old command economy.























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