December 24, 2004

In many respects, the Russian economy has changed little since the days of the Soviet Union. Most exports are still raw materials, and weapons. Russian arms exports rose again in 2004, to about $5.6 billion. Weapons are one of the few manufacturing industries that has been modernized since the the Cold War ended. Most of the weapons sales are to China and India, and that is primarily because Russia is willing to sell those two nations technology and manufacturing capabilities, as well as weapons themselves. The Russian economy has been growing rapidly for the last few years because of the rising price of oil and gas. Much of the additional tax revenue is going into rebuilding the armed forces after a decade of decline.