Russia trying to jump start economy

Saint Basil's Cathedral

Before I begin, this post is totally unrelated to today’s terrorist attacks in Moscow as this article was partly written before those events.

In an effort to give a kick in the behind to the Russian economy, President Dmitry Medvedev is trying something different from the basic government spending and tax cuts. Russia has decided to decrease the country’s time zones from 11 to 9. They hope that this will make Russia more manageable and easier to do business in as a result. This is a very interesting tactic that is out of the box, although I’m not sure how big of an impact it can really have.

Russia is the largest country in the world and covers two continents. Their land area is more than 11% of the entire land mass on earth and stretches more east/west than north/south making it cover many time zones. Russia has always had difficulty managing itself throughout history because of their enormous size. However, their size was a big part of how they were able to beat the Nazis in World War II, along with their cold winters.

President Medvedev’s thinking on decreasing the time zones comes from looking at how the United States and China use far fewer time zones and operate far more efficiently than Russia. In reality however, only a tiny, almost negligible amount of blame can be placed on the number of time zones for Russia’s relatively inefficient economy. Much more of the blame would have to be placed on the government as it is flush with corruption which fuels inefficiency.

For us in North America, we are used to having four major time zones (although there are actually more) and it does make doing business easier in that regard. However, I have no doubt that if we had twice that number of time zones, our economies and level of business would not be dramatically more difficult or smaller in scale. At the end of the day, people need to buy goods and services to live and that requires a fairly consistent level of business to be in place, regardless of the time zone one lives in.

It is an interesting concept however for Russia to reduce the time zones. I don’t think it will have a negative effect because it will streamline the country a bit more. Hopefully they will have an honest review and comparison after this change has had time for the people to adjust to see how much of a difference it has actually made. Regardless, I think a better jump start to the Russian economy is to strengthen ties with Europe and the US and one way to start that is to stop flying military bombers close to UK shores…just a thought.