ABSTRACT
Russia is a mineral economy. It has 5 per cent of world oil reserves and one-third of the natural gas reserves (Economist, 1999). However, the standard definition of a mineral economy is based not on the scale of the resource endowment but upon the relative importance of minerals to the economy. It states that a country is a mineral economy if it derives at least 10 per cent of its GDP and 40 per cent of its exports from minerals (Nankani, 1979). Although the Russian mineral sector’s share of GDP almost halved during the years 1992-97 to 16 per cent of GDP, it remained within the definition threshold. As for exports, minerals became dominant because exports of other primary products and manufactured goods fell more dramatically. Fuel exports alone accounted for 42.3 per cent of total exports 1996-98 (World Bank, 2000). Finally, the contribution of minerals to total taxes rose despite the declining share of natural resources taxation in GDP. This is because the overall tax base shrank even faster.
