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The Kremlin's desultory attempts at diversifying the Russian economy have largely failed.Indeed, in 2012, the IMF calculated that the consolidated public sector accounted for nearly 70 percent of Russia's GDP.The expansion of the state's control of the Russian economy has been driven by a proliferation of state-owned corporations, whose gross liabilities now amount to 150 percent of GDP. In 2014, publicly owned or controlled entities accounted for nearly 70 percent of the turnover and 85 percent of employment among Russia's top 15 companies. For the largest 100 companies, these shares were 54 percent and 68 percent, respectively. Putin's Russia is increasingly reminiscent of President Suharto's Indonesia – an intricate system of crony capitalism without real property rights.This system comes at considerable costs to the Russian economy, favoring rent-seeking at the expense of productivity growth.Despite all this, Putin's commitment to the system that he has built is unwavering.Opening up the economy to competition and expanding the private sector would undermine the system of wealth and power that Putin's associates enjoy.
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