29 billion in loans for projects to Russia, while the IMF has loaned more than $15 billion. Unfortunately, while integration with the world economy has resulted in success stories such as Hungary and Estonia, Russia has continued to struggle. .
Many of the pro-western politicians turned out to be politically inept, and some outright corrupt. In addition, there is a growing mistrust of the Western ideals and ways. In August of last year, the Russian government defaulted on $40 billion worth of debt in ruble bonds, rocking the world's economy. Before this crisis, the Russian economy appeared to be developing quite nicely. They had a growing middle class and the needs of the poor were being met by a small but thriving volunteer sector. Many businesses, in light of competition from foreign firms was beginning to show promise, and was putting more focus on meeting the needs of shareholders, customers and employees. Also the government had a steady tax revenue stream. Since the crisis however, the economy has been shrinking, and the fledgling middle class has been devastated. Russia still maintains a healthy current account surplus of $18 billion, but dues to the lack of confidence in the economy, most of these dollars are being deposited into stable foreign currency accounts outside of Russia in safe havens such as Switzerland. Little of this money shows up in tax revenue for the government. Russia has a remarkably inefficient tax system, which has allowed widespread nonpayment of taxes. Tax revenues last year were running at about $1 billion per month (less than that of New York City), yet the government was spending $1.5 billion per month. This has brought about widespread political uncertainty in the country, and raised the possibility of a non-Western friendly government coming to power. Most Russians think their lives will get worse before it gets better. .
This crisis has been worsened due to the recent drop in oil prices.
