What’s in it for me? Understand what makes the world’s greatest economies tick

By making the right choices, nations can change their economic fate.
In the animal kingdom, natural evolution can lead to a dead end like the giant panda: a species that can barely survive or reproduce and has no hopes of changing. Fortunately, in world economics, it’s never too late to change.
Let’s take a look at why, of two countries with similar backgrounds, one managed to change and the other didn’t.
Russia is a good example of a country that tried, but ultimately failed, to change.
In the 1990s, after centuries of Tsarism and Communism, Russia attempted to transition into a free-market economy. But the nation quickly learned that it was ill prepared for this abrupt economic shift and ended up defaulting on its economic debt in 1998.
Russia then experienced a backlash against the free market and its unpredictability. As a result, Vladimir Putin restored the nation to a Tsarist-like state: he drove out foreign companies and placed the nation’s energy industry back under governmental control.
Though much of the economy hinges on its oil and gas reserves, the centralization of power has restored a sense of stability to the Russian citizens. Though it has come at a price, with the loss of free media and fair elections.
To see how a country can actually make fundamental changes, we can look at China.
China took a different approach to entering the free-market economy. Despite China’s history of being suspicious of foreign investors and businesses, the financial success of Hong Kong in the 1980s and 1990s proved that a diversified and open marketplace can lead to success.
So, when Hong Kong reverted back to Chinese control in 1997, the nation was able to follow the economic path of similar governments, including Taiwan and Singapore. Unlike Russia, China didn’t seal itself off from opportunities: it recognized the advantages a diversified economy has for creating potential revenue.
As with the other countries we’ve looked at, it’s clear that the economic outcomes of Russia and China were not written in stone. They are, in fact, the result of important choices the nations have made.