"Russia’s Weak Fundamentals"
Via Robert Farley, Charlie Whitaker makes the important and too-often-neglected point that notwithstanding Russia’s evident ability to kick around a tiny country that borders it, present-day Russia is really a poor man’s peer-competitor:
Now that we can measure it,* we find that Russia’s GDP is approximately equal to that of Portugal (which is not to knock Portugal). Much of Russia’s wealth comes from resource extraction: in other words, Russia is not making stuff. Is it thinking stuff instead? Well, is there a nascent biotech or semiconductor industry in Russia today? (Or is there maybe some other, more esoteric kind of activity that hasn’t yet permeated popular consciousness?) How are Russian universities doing?
Russia is fairly populous, although no one would call it densely populated. However, its population is shrinking; in part, because it is not a healthy country.
High prices for oil and natural gas have allowed Russia to pick itself off the floor it found itself on during the 1990s, but this is still not an economically dynamic country and as Farley says “the equipment it’s using in front line units is still a generation behind Western (to say nothing of American) capabilities.” Russia’s combination of resource wealth and nuclear weapons makes it a hard country to push around which, in turn, makes it difficult for anyone to stop Moscow from pushing Georgia around. But on the whole, Russia’s clout is still puny compared to what it was back in the day and demographically it continues to be in decline while a large number of countries once subservient to Moscow are growing more prosperous than ever in the western orbit.
Long story short, the whole “Russia’s Back!” narrative needs to be kept in perspective. There’s a lot of demand out there for “new cold war” scenarios featuring Russia or China or maybe both, but fundamentally that kind of talk is out of step with reality.
Photo by Flickr user memekode used under a Creative Common license.