Text 3. Russia in the Global World

Russia is part and parcel of the global world, whether we are talking about the economy, media or cultural development. Russian business is beginning to take part in all global initiatives. The great advantage of globalisation is that it increases competition. However, Russian companies and firms have to be careful and have to order their affairs so that they can really compete in a global market. Otherwise it can be overweighted by a large number of disadvantages.

The first is that globalisation can hurt the local government’s ability to deal with issues like welfare, benefits, wages and taxes mainly because the multinational is able to say to the Government, -‘Look, unless you lower your taxes on us, we’ll be moving off to South East Asia or Latin America’, and so on. And so it takes out of the hands of the government the ability to control their own welfare systems and provide a decent infrastructure for their people. However, the situation is not so bad now, as there are some regulations between Russian government and multinationals. But more and more in recent years companies have started to rule the roost.

The other problem is one of unemployment. As companies want to improve their profitability, they’re going to be looking for the low-cost, low-wage centres. And we are just about to see a major change in the global economy because of the addition of China and India to the global labour market. There are great advantages in this, but there are a lot of problems as well, because China and India are going to provide a skilled population. Also, they’re going to provide fairly good infrastructure for the companies that are going to go out there. So we’re going to see a flight of capital from the country which is going to be sudden and dramatic. If it is too sudden and is not managed properly, we could find very severe problems in the future.

Answer the Questions:

1. Is Russia a feed tank or part and parcel of the global world?

2.What is the main advantage of globalisation?

3. Why should Russian business be careful dealing with multinationals?

4. What are the main disadvantages of globalisation?

5. What ability does globalisation take out of the hands of the local governments?

6. What problems does globalisation cause?

7. What are companies going to do to improve their profitability?

8. What countries have recently joined the global labour market?

9. What major changes can we see in the global economy?

10. What kind of population are China and India going to provide?