No sign of growth
At the time of transition there were hopes that Russia would convert to a high skilled, high income economy with strong social protection programs inherited from Soviet Union days. This is almost a parody of what happened in practice. Efforts were made at the outset to distribute state assets equitably: most of the housing stock was given away to residents and shares in Gazprom were allocated to Russian citizens. But other choice assets in resource-rich companies went to the chosen few, and subsequent developments in a nation notorious for weak institutions have reinforced the importance of political connections rather than entrepreneurial talent.
While recent performance has been bearish, the period since 2000 as a whole has seen robust growth fuelled by a
world hungry for the natural resources that Russia has in abundance. Using constant exchange rates, household wealth has risen over sevenfold, from USD 1,650 in 2000 to USD 11,900 today. Wealth per adult is above the post-crisis low, but still remains below the peak in 2007 when the US dollar bought less than 25 rubles: now it buys 33.
The quality of wealth data for Russia is mixed. Financial balance sheets are now available and indicate that gross
financial assets average a little over USD 4,000. There is less information on real assets, but our estimates suggest that they are twice as high. Personal debt grew by a factor of 20 during 2000-07, and although it seems low in absolute terms, at USD 2,550 per adult, it amounts to 19% of gross assets.
Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident
billionaires. Worldwide, there is one billionaire for every USD 170 billion in household wealth; Russia has one for every USD 11 billion. Worldwide, billionaires collectively account for 1%–2% of total household wealth; in Russia today 110 billionaires own 35% of all wealth.