Russia is a federal semi-presidential republic, though in practice it functions as an authoritarian state with centralized power. The country's economy, the largest in Eastern Europe, relies heavily on its vast natural resources, particularly oil, natural gas, and minerals. While technically a market economy, there is substantial state control over key strategic sectors. Other significant economic activities include manufacturing, agriculture, and arms exports. Despite its resource wealth and educated workforce, the economy faces challenges from international sanctions, dependence on commodity exports, and the need for diversification.