A country's transitional economy is one which is changing from a centrally planned economy to a market economy. Russia, also known as the Russian Federation, is a country in northern Eurasia. It is a federal semi-presidential republic which is currently ruled by Vladimir Putin. Russia is the largest country in the world, covering one-eight of the worlds inhabited area. It has a developed, high-income market economy with a huge variety of natural resources such as oil and natural gas. Russia today has the 9th largest economy in the world by GDP and the 6th largest by purchasing power parity (PPP).
After Mikhail Gorbachev came into power as the leader of the Soviet Union, continuing the economic liberalisation moved the economy towards a market-oriented socialist economy. All of the factors that started to change contributed to the final dissolution of the Soviet Union in 1991. The end of development and progress that would consume the last years of the Soviet Union was caused by poor governance under Leonid Brezhnev, which was when the faults of the Soviet Union had started to appear, and disorganization within the command economy. When the downfall began is questioned, but is normally placed either in the 1960's or early 1970's. At that time the government had specific planners that created 5-year plans for the economy and its different sectors. The complicated demands of the modern economy and inflexible administration put a lot of pressure on the central planners. Corruption and messing with data became a common practice among the bureaucracy by reporting incorrect data which caused the crisis to become even larger and more complex. This piece of information makes it hard to get reliable data on this topic even today, so most data are simply estimates.
Heavy industry was always the focus of the Soviet economy, even in its later years. Economic planners made little effort to determine the wishes of household consumers, resulting in major shortages of many consumer goods.
