Russia has made important progress in economic transition and the integration into world markets since 1995. This second Economic Survey concludes that monetary policy has achieved considerable progress towards price stability, a key factor for sustainable growth and development. In addition, the prolonged painful contraction of output may finally be over, with several sectors of the economy now showing signs of revival. Progress in the regulation of financial markets and commercial banks during the last two years has also been quite impressive. Despite persisting debates and conflicts within political circles about the desirable course of reform, a consensus appears to be beginning to form within Russia that the completion of transition to a full-fledged market economy is the only feasible path to future growth and prosperity.
Many obstacles still stand in the way.
Progress in monetary policy contrasts sharply with continuing difficulty in achieving fiscal soundness, which reflect a poorly-functioning tax system and a highly problematic budgetary process. The consolidation of gains in stabilisation and the revival of investment activity both depend greatly on fiscal reform, especially in taxation. Other key structural reforms are needed in the areas such as financial markets, public and private-sector governance buttressed by the rule of law. The Russian government, however, acknowledges these challenges and has stepped up the pace of reform during 1997. In the last few years, the OECD and the government of the Russian Federation have been forging closer ties and expanding co-operative relations in areas other than OECD Examination of the general economic situation.