How severe is the damage to Russia’s economy?
The Hundred #10: May 20, 2022
Thank you for reading The Hundred, a newsletter in which 3 experts answer 1 question in 100 words. If you haven’t subscribed yet, click the button below.
“Russia’s economy is in crisis. In early 2022, the country was still deeply integrated with the West. Sanctions and the self-sanctioning of Western companies have severed this link. Russia will experience the deepest recession since the early 1990s. The real extent of the crisis will become apparent in the following years, with living standards falling markedly. Many goods and services that were part of everyday life have disappeared or are about to disappear. Without access to Western supply chains, financial markets and technologies, Russia’s economy will become much more primitive and rely even more on the export of raw materials.”
“Sanctions, export controls, transport bans and Russia’s own defensive policies have done more to cut imports than exports. Brain drain and corporate exits further limit access to global technology and capital, hitting medium growth and current rearmament. Russia continues to accrue revenues from admittedly discounted commodity sales, has little need to borrow and its painful rate hikes stabilized local financial markets. The outlook depends on the Western commitment to reducing reliance on Russian commodities, how emerging markets are crowded in and on Russian choices on distributing the pain. Overall, Russia will be more inward-focused, smaller, lower-tech and even more state-led.”
“The ex-USSR and now Russia is an extreme mirror onto global economic processes. In the early-to-mid 20th century it built a towering version of the industrial economy and later its greatest rust belt. In the 2000s, Russia became an extreme case of globalization. Now, Russia must deal with the problems of scarcity caused by deglobalization and supply shocks due to its criminal war in Ukraine. Russia isn’t alone in this. This is a global phenomenon. However, Russia’s case is more extreme due to low state capacity and the speed and extent of its isolation.”
That’s it for The Hundred #10. Please share this post with friends and colleagues if you found it interesting. If you want to learn more about this topic, here’s a list of further reading. If you haven’t subscribed yet, click the button below.
Russia wont be brought to its knees by sanctions. Its too insulated at this point. It grows its own food and has plenty of natural resources. It will hurt in the long run but sanctions wont stop Russia. Things may change for Russia because Putin is old and dying so there could be some kind of junta or Myanmar situation but sanctions wont be the reason for Russia collapsing.
Only a complete embargo of the country will change things including oil and gas. Personally I think NATO should just join the war and get it over with. If they wanted to use nukes they would have already. They are bluffing. As long as Crimea stays in Russian control they can tolerate a slight humiliation.
Lol yeah yeah economy crushing, people on lines for bread right ? How bad you want to believe this yourself.