Russia's elite believe that by spending billions on glossy projects like an international skiing center for the 2014 Sochi Olympics or on a new “innovation city” at Skolkovo near Moscow makes up for lack of progress on the rest of the sclerotic economy. Indeed, a recent report published by Russia's Economic Development Ministry calls for using “Soviet methods” of propaganda to convince foreigners to invest in Russia. Out in the real world, Russia's economy shrunk by 8 percent last year, and oil and gas production has fallen to Soviet levels thanks to a lack of investment in new fields.
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