The economy of Russia can be defined as a mixed high-income economy, with the critical areas being owned by the state (Aswathappa, 2010, p. 305). Reforms to the market that took place in the nineties led to privatization of a huge part of the industries as well as agricultural sector in Russia, but noteworthy exceptions were in the energy and defence sectors. Russia has some peculiarity among the main economies in the manner in which it depends on energy revenues as the main drivers of its growth. The nation has numerous natural resources that include oil, natural gas as well as precious metals that constitute a huge percentage of the country’s exports (McColl, 2005, p. 778). By 2012, the oil and gas industry of the economy amounted to almost sixteen percent of the GDP, in excess of fifty percent of income of the federal budget and around seventy percent of all the exports from the country. The arms industry in Russia is expansive and sophisticated with the capability coming up with designs and manufacturing high tech military equipment like the fifth-generation fighter jets (Wenger, Perović and Orttung, 2006, p. 12). Russia’s arms exports were valued at more than fifteen billion dollars by 2013, which was second to the US with the main military exports from the nation including combat planes, submarines and ships among others.
By PPP, the economy of Russia is the sixth largest in the entire globe and boasts of living standards that grew exponentially between 2000 and 2012 as a result of energy exports. During this time, the real disposal incomes of the country rose by more than one hundred and sixty percent. In terms of dollar denominations, this could be equated to an increase of more than seven times in disposable incomes of the country since 2000.