What Russia’s Failing Economy Means

An article in the Huffington Post caught my attention: What Russia’s Failing Economy Means

A few lines from it:

“But the economic decline in Russia started in the very beginning of 2012. The growth rate was only 1.3 percent in 2013, for example, when oil was well above $100 per barrel”

“The key problem of the economy, and the key reason for the decline, was the decline in investment. The economy cannot grow without investment…In 2012, investment stopped growing. In 2014, investment started to decline. That’s the main reason why the Russian economy is contracting.”

“That means that the only one real chance the Russian economy has is if the government improves the investment climate and boosts investment. But in order to do this, Russia needs to implement the rule of law. Once again, that’s not in the interest of Putin, because implementing the rule of law is the best way for him to lose power” (I put this line in bold)

The increase in military budget by 0.8 percent when inflation in the country is 13 percent actually means shrinking of the military budget. I would not pay big attention to the nominal numbers because inflation in Russia is very high.

“It’s important to note that the Russian economy is not in free fall. It’s not like a landslide, like in Venezuela” (which nicely serves as a lead-in to my next post)

And finally:

“They [poverty and unemployment] may change the political climate, but it won’t happen in a year, or in two years. It may take a decade, maybe, but it’s not a very fast and rapid process.”

 

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Christopher A. Lawrence
Christopher A. Lawrence

Christopher A. Lawrence is a professional historian and military analyst. He is the Executive Director and President of The Dupuy Institute, an organization dedicated to scholarly research and objective analysis of historical data related to armed conflict and the resolution of armed conflict. The Dupuy Institute provides independent, historically-based analyses of lessons learned from modern military experience.
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Mr. Lawrence was the program manager for the Ardennes Campaign Simulation Data Base, the Kursk Data Base, the Modern Insurgency Spread Sheets and for a number of other smaller combat data bases. He has participated in casualty estimation studies (including estimates for Bosnia and Iraq) and studies of air campaign modeling, enemy prisoner of war capture rates, medium weight armor, urban warfare, situational awareness, counterinsurgency and other subjects for the U.S. Army, the Defense Department, the Joint Staff and the U.S. Air Force. He has also directed a number of studies related to the military impact of banning antipersonnel mines for the Joint Staff, Los Alamos National Laboratories and the Vietnam Veterans of American Foundation.
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His published works include papers and monographs for the Congressional Office of Technology Assessment and the Vietnam Veterans of American Foundation, in addition to over 40 articles written for limited-distribution newsletters and over 60 analytical reports prepared for the Defense Department. He is the author of Kursk: The Battle of Prokhorovka (Aberdeen Books, Sheridan, CO., 2015), America’s Modern Wars: Understanding Iraq, Afghanistan and Vietnam (Casemate Publishers, Philadelphia & Oxford, 2015), War by Numbers: Understanding Conventional Combat (Potomac Books, Lincoln, NE., 2017) , The Battle of Prokhorovka (Stackpole Books, Guilford, CT., 2019), The Battle for Kyiv (Frontline Books, Yorkshire, UK, 2023), Aces at Kursk (Air World, Yorkshire, UK, 2024), Hunting Falcon: The Story of WWI German Ace Hans-Joachim Buddecke (Air World, Yorkshire, UK, 2024) and The Siege of Mariupol (Frontline Books, Yorkshire, UK, 2024).
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Mr. Lawrence lives in northern Virginia, near Washington, D.C., with his wife and son.

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