Amid Russia's invasion of Ukraine, workers dismantle the Soviet monument to Ukraine-Russia friendship in Kyiv, Ukraine, on April 26, 2022. Genya Savilov/AFP via Getty Images
It’s almost certain that encroachment was a factor, or at least an excuse, but was that the big triggering event?
Or were there other factors driving Russia’s invasion?
If you’re like many observers, it may seem that there’s much more to the war than meets the eye. And you would be right.
As noted in an earlier post, for example, the war has resulted in Russia and China causing or worsening food shortages in the region and even much of the world.
Why is Moscow pursuing this destructive policy?
Clearly, it does not want to coexist in the current world order in which it finds it difficult to compete.
Russia’s Poor Prospects
Suppose we look at Russia’s current economic status and see how it stacks up against Western Europe, the United States, Japan, and other advanced nations. In that case, the results are depressing if you’re a Russian.
On a gross domestic product (GDP) basis, Russia is the world’s 11th largest economy. But for a nation with the largest landmass, enormous natural resources, and a highly educated population of about 145 million, even Italy, with a population of just 60 million, out-produces Russia.
On a GDP per capita basis, Russia ranks 49th globally, with Italy coming in at 34th, easily surpassing Russia’s GDP per capita ranking. For Russia, such a low ranking is abysmal.
Today, even with Russia reaping a windfall from crude oil prices hitting seven-year highs and revenues increasing 35 percent from 2020, any “broad economic recovery” that Russia may gain will be short-lived.
It’s easy to get a 10- or 11-point jump in GDP when the prior levels are so low and the one or two things you make—energy and grain—have suddenly doubled or tripled in price due to your war against another country.
But that isn’t a long-term strategy for sustainable economic growth. Russia’s regression from Wild West capitalism in the 1990s to authoritarian oligarchy in the 2000s has largely stifled new development—if not innovative thinking—and replaced economic dynamism with the predictable mediocrity of political repression.
A (Mostly) Mid-20th Century Economy
With the exception of nuclear missiles, computer programming/software engineering, and a few other verticals, Russia has a mid-20th century economy—which is why it’s finding it tough to compete in a 21st-century world.
According to the World Bank, Russia’s economy is based on three broad sectors and major industries: 62 percent of GDP comes from the service industry, 32 percent from the industrial sector, and agriculture has a share of around 5 percent.
But look at the big picture. In 2019, oil and gas accounted for 60 percent of Russia’s exports and 39 percent of federal budget revenue. The energy sector makes up about 25 percent of the country’s GDP.
A general view shows an oil treatment plant in the Yarakta Oil Field in Irkutsk Region, Russia, on March 10, 2019. Reuters/Vasily Fedosenko
As the saying goes, Russia is a nuclear-armed gas station that hacks Western networks.
Putin Blocking Russia’s Development
Those 2019 percentages are even larger now. But will Russia convert this brief window of enhanced revenue into long-term wealth?
Not likely.
This is Vladimir Putin’s Russia we’re talking about. Putin doesn’t share, and he doesn’t play well with others—with the exception of loyal oligarchs. The lion’s share of the wealth will continue to go to Putin and his oligarchy of supporters.
That’s what happens in dictatorships. Wealth and information sharing, and the innovation and market development that come with both, directly threaten dictators’ power and their hold on society.
That’s also why economic growth and innovation have eluded Russia. Long-term wealth and innovation need markets as well as economic and legal stability, none of which Putin can provide.
What’s more, with Russia’s aging and declining population, time and demographics are working against Putin’s visions of his empire. If Russia doesn’t change in a few decades, it will likely become even more of an economic backwater than it already is.
The most significant factor in Russia’s ongoing economic disaster story is Putin himself. At 69 years of age, the dictator has more yesterdays than tomorrows. In other words, whatever he has planned for Russia—and his perceived enemies—he will be carrying it out sooner than later.
A Future Undone
It didn’t have to be this way, of course. There’s no shortage of intelligence, industriousness, or capabilities among the Russian people.
With arguably the most advanced computer programmers in the world, Russia could be an information technology powerhouse. It should be leading the world in cutting-edge computer programming and software innovations.
In 2014, Russia’s Skolkovo Technopark—its so-called “Silicon Valley”—attracted Western capital. Then Putin invaded Crimea.
Investors eventually returned to Skolkovo Technopark, but then Putin invaded Ukraine, and again, institutional investors pulled out their money.
So where are many of Russia’s greatest innovators now?
In the real Silicon Valley, of course, and other tech hubs.
Ironically, Russia’s programming prowess makes it one of the world’s leaders in cyberthreats and cyberattacks.
That should embarrass Putin and anger all Russians.
Russia Plays the Spoiler Role
Can Russia ever hope to compete against the United States, Germany, Japan, the United Kingdom, or even France economically?
Not under the current leadership.
Rather than promoting a dynamic and innovative economy, Putin has his foot on the neck of the Russian people. Too many with brains and ambition leave in order to become successful or simply give up.
Given Putin’s track record of invasions and desire for empire building, it appears that we’ll be seeing more of the same. Nations use the advantages they have at hand, after all. Putin knows that to survive and remain a force in the 21st century, he must leverage the ones he possesses.
As the leader of Russia, Putin had the choice to make Russia a leader in enhancing the world or to play the leading role of a spoiler. He chose the latter.
As a result, war and destruction are what will mark Putin’s time on this Earth.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
James Gorrie
Author
James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.
