Excellence in Historical Research and Analysis
Excellence in Historical Research and Analysis
Sorry, but another coronavirus post. This is a follow-up to our post a month ago:
Needless to way, with over 21,000 cases now reported in Russia and over 170 deaths (which are probably under-reported), Russia is very much part of the pandemic now. Chart of number of cases as of 4/14/20:
A couple of related articles:
Putin’ Bleak COVID-19 Admission: “We Don’t Have Much to Brag About”
Putin says Russia may need the army to help battle coronavirus
There are only 93 cases of the coronavirus reported for Russia (and no deaths). They have been reporting a lot less than that for a while, and 8 are reported as recovered. This is in a country of almost 147 million people.
Muscovites do travel. I have known a number of them that have traveled to Italy (27K+ cases and counting), Germany (7K+ cases) and many other parts of Western Europe. But there are only 93 cases in Russia. Neighboring Finland has 294 cases (population 5.5 million), neighboring Estonia has 225 (population 1.3 million). Latvia, Lithuania, Belarus, Moldavia, Georgia, Azerbaijan and Armenia, all former members of the Soviet Union, are each reporting between 18 and 52 cases. Only Ukraine is not reporting a lot of cases, only 7. Some of the “stans” are reporting cases, Kazakstan with 27, Uzbekistan with 10, although the other three “stans” are not reporting anything. Russia’s neighbors to the east included Mongolia, China and North Korea. China’s most northeastern province, Heilongjiang, is reporting 482 cases. So why does Russia have so few?
According to an article written on 13 March 2020, Russia had tested as of 12 March 76,963 cases. This is a particularly industrious effort and only three counties had done better (image is above). The article is here: https://ourworldindata.org/covid-testing
So, either: 1) Russia has been very good (even outstanding) at early testing, quarantining and controlling the virus, or 2) it has just managed by luck to have so far avoided Russia, or 3) the Russian figures are grossly underreported.
It looks like the next potential conflict in Eastern Europe is over Belarus. Russia has had more than one conflict with Georgia (population 3.7 million) that has split off two separate states from it (Abkhazia and Ossetia). Both of these conflicts pre-date Putin’s presidency of Russia. Russia more recently has had a conflict with Ukraine (population 42 million, excluding Crimea and Sevastopol) that split off two “Peoples Republics” (Donetsk and Lugansk) and annexed Crimea. Pre-dating Putin is the Transnistia Republic cut out of Moldava (population 2.7 excluding Transnistria, which is 0.5 million).
Now, apparently Russia and Belarus are in a discussion over economic integration that the dictator of Belarus, Alexander Lukashenko (age 65), is not too happy with. He claims that his talks last week with Putin is not about “integration” of their economies but about “merging.” Meanwhile Russia has cut the oil to Belarus, forcing it to get it from Norway and other places.
So what is Belarus exactly? It is a country of only abut 9.5 million people. Not very big, although not very densely populated. It has one major city (Minsk) with an urban population of around two million. Its second largest city is Homeyel (Gomel) with a only half million. For all practical purposes, it is an old style city state, with one major urban area and lot of land. It is 208 thousand sq. kilometers, or about the size of the state of Kansas or Nebraska. To compare:
Part of the problem is that Lukashenko has been dictator of Belarus for the last 20 years. He is not exactly close to the U.S., the E.U. or hardly anyone else. He is kind of standing alone, which is not a very good position to be in when one of your neighbors is at least 15 times larger (and over 27 times richer) .
We shall see how this develops, but an independent Belarus always looked a little improbable. It was briefly independent once before, in 1918. The Belarus Rada still maintains itself as a government-in-exile, located now in Vancouver Canada. This is actually the oldest remaining government-in-exile.
Again, this is not my area of expertise, since I’m mostly into Pfizer stock speculation and such, but as the Coronavirus does not seem to be going away any time soon, probably worthwhile to look at the effects of such a disease if it continues to expand, beyond the issues of health and mortality.
Economic Effects in China: Right now, around 60 million people are in partial or full lock down. The current population of China is over 1.4 billion, so this is 4% of the population. So lets say that their economic activity is reduced by at least 20% (it may be more). Let us say this is a ripple effect that impacts three times that amount of people (as they certainly trade with others). The most immediate economic impact of the virus is on consumption and travel. So 0.12 x 0.8 = 0.96 or basically a 1% decline in the Chinese economy/growth rate. The Chinese economy is growing at around 6% a year. Now, if this virus lasts for three months, it is simply a blip on the charts. If it lasts the better part of a year, we will see a reduction in the growth rate of the economy. On the other hand, if the virus continues to spread and more people and cities are on lock down, then the economic impact could be more significant.
Note: These are all the companies who have shut down operations….
International Economics: The Chinese economy now makes up 16% of the world economy. They are certainly the manufacturing hub in many industries (for example, my first Kursk book was printed there). So, any disruption in the Chinese economy will result in a decline worldwide. These fears were amplified this last Monday morning when the DOW declined by over 500 points, which is almost a 2% drop. Now it was recorded somewhat and as of 1:00 PM on Monday was at 337 (1.16%). Still this shows the economic impact on the markets. Of course, the market going down 1 or 2% does not mean the economy is in decline, but it does indicate that this is a global concern.
Oil Prices: U.S. oil prices were down on Monday morning by nearly 2% also to $53.13 a barrel. Now oil prices directly affect consumers as we can see the fluctuations from day to day at the gas pump, but…..if also significantly impacts the economy of Russia, which relies heavily upon taxes on oil and natural gas for its budget. As of 1 PM on Monday, the exchange rate for rubles to dollars went from 62 rubles to 63 rubles.
Internal Stability in China: Keep in mind that China had a major internal unrest incident in 1989 with Tiananmen Square. They have been hesitant since then to run over people with tanks. More to the point, the continued growth of the Chinese economy has dampened much of the political and internal unrest, and will probably continue to do so as long as the economy continues to grow. Many people (and I am one of them) does consider that the development of a capitalist economy under control of a communist regime is a fundamental contradiction that at some point will lead to political unrest. This was the case 30 years ago, and if the economy stagnates or decline, I have no doubt will be the case again. Added to that, right now there has been an extended pro-democracy protest in the Chinese city of Hong Kong that has not been resolved. Is this an isolated case, being a former British colony; or is it the first of many others? I do get the sense that the stability of China is not guaranteed and could be quickly become an issue if the economy declines.
Internal Stability of Russia: The Russian economy is tied to oil prices, maybe not as much as Iran and Saudi Arabia, but enough that this is a big issue. In 2012 oil, gas and petroleum products account for over 70% of their total exports. Russia already had one extended economic decline from 2014-2015 where is actually saw its GDP decline by 3.7% in 2015. This is significant. We do note today that the when the stock markets declined by over 1%, the price of oil declined by 2% and the ruble declined by 2% also. So……what happens if the decline continues? The Russian GDP grew by only 1.2% in 2019. The next Russian election is in 2024, so they have some time to ride out any problems, but as they are busy changing the constitution into who knows what; then if we actually do see a significant decline in the Russian economy over an extended time, then the elections, or even internal stability, could become an issue.
Ukraine and sanctions and such: Not unrelated to the Russian economic problems are the sanctions imposed by the U.S. and European as a result of its actions in Ukraine, including the seizure of Crimea. This have been an issue since then, both in Russia and in U.S. politics. Needless to say, if the Russian economy declines, these issues will remain at the forefront.
Iran and Iraq: Cannot help but notice that Iran has a lot of internal turmoil and unrest, in addition to occasional head-to-head confrontations with the U.S. The Iranian economy is also heavily tied to the price of oil. Nothing fuels a protest movement like a declining economy. One could also say the same of Iraq. Of course, we have troops in Iraq.
[Photo deleted at the request of AFP]
Just noted this article:
https://news.yahoo.com/russias-only-aircraft-carrier-fire-port-news-agencies-100747109.html
This is Russia’s only carrier. It is in dock in Siberia undergoing refitting. It is supposed to be done in 2021…but this is doubtful. The Russian fleet is still extremely limited in capability.
We have written about this before.
Our count of carriers throughout the world in 2016 is given in this post:
2016 count:
I noticed that our blog was being pinged by a site I was not familiar with, so I took a look at it….and I don’t read Chinese Korean (see: https://m.blog.naver.com/alsrb19/221127427656).
But the site had a link to a paper written by Dr. Phillip A. Karber of the Potomac Foundation. This is worth looking at:
https://drive.google.com/file/d/0BwsSGlkg0LM2aVhrNXExQ2FVTngxbzhWYVFCSFpvNWNCdVFB/view
This was done as part of the “Historical Lessons Learned Workshop.” I gather Dr. Phillip Karber and retired Gen. Wesley Clark wandered around Ukraine a lot during 2014 and 2015. Mr. Karber was wounded in June 2015 in a MLRS strike at Bebedynsky during the process. While I have never met him, Phil Karber has been around for a while, having worked for Andy Marshall (OSD Net Assessment). A few highlights:
There are probably a few other significant points that I passed on.
Just published by The Institute of Land Warfare is a paper by Major Amos C. Fox, U.S. Army called “Cyborgs at Little Stalingrad”: A Brief History of the Battle of the Donetsk Airport. It is not long (16 pages) and definitely worth a read.
A few highlights:
To quote from the last paragraph of my book, War by Numbers (page 328):
The post-Cold War world appears to be world of many small conflicts…the terrorist attacks on 11 September 2001 proved that the United States is not immune to attack and that we do have to remain engaged with the rest of the world to some degree. Certainly U.S. armed forces will be part of that engagement, and they will be called upon to fight a range of wars, from drone strikes and special operations to full-scale guerrilla wars and conventional campaigns. All must be addressed and planned for.
This is a follow-up to the blog post:
One of readers commented on this post and posted the following link: Paper Wargames and Policy Making
In case you are not reading the comments to our blog post, wanted to make sure this was brought to your attention. The article is worth taking a look at just for the pictures. A few highlights:
A couple of recent articles on that latest wargaming effort done by RAND:
The opening line states: “The RAND Corporation’s annual ‘Red on Blue’ wargame simulation found that the United States would be a loser in a conventional confrontation with Russia and China.”
A few other quotes:
Also see: https://www.asiatimes.com/2019/03/article/did-rand-get-it-right-in-its-war-game-exercise/
A few quotes from that article:
The articles do not state what simulations were used to wargame this. The second article references this RAND study (RAND Report) but my quick perusal of it did not identify what simulations were used. A search on the words “model” and “wargame” produced nothing. The words “simulation” and “gaming” leads to the following:
Anyhow, curious as to what wargames they were using (JICM – Joint Integrated Contingency Model?). I was not able to find out with a cursory search.
The Soviet Union broke up into 15 separate countries in December 1991. What would a reconstituted Soviet Union/Russian Empire look like, if that is indeed one of the goals of Russian leadership (and some people say it is).
The three Baltic states appear to be out of their grasp, being members of NATO. They are militarily protected by an alliance of 29 members, and their economic growth has been significant. The per capita income of Estonia is $19,840 (IMF 2017), while that of Russia is $10,608. Half of Russia’s GDP is in Moscow, just to drive home what the rest of the country is like.
Some of these countries are united into the Eurasian Economic Union. It consists of five countries: Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan. It was Ukrainian President Yanukovych’s decision to develop closer economic ties with Russia and the Eurasian Union and back away from an association agreement with the European Union (28 countries) that started the Euromaiden protests in November 2013 that lead to his removal from power in February 2014 (and the Russian seizure of Crimea and the Russian-influenced revolts in Lugansk and Donetsk). The Eurasian Union flag is below. Interesting map choice.
So who would be in a reconstituted Soviet Union/ Russia Empire?
There are the five “stans” in Central Asia (Kazakstan, Uzbekiskan, Kyrgystan, Tajikistan, and Turkmenistan). By the nature of their geography they are somewhat isolated, landlocked, and potentially could be brought back into Russia’s orbit. Two countries are already members of the Russian created Eurasian Union. There is also Belarus, another Eurasian Union member. Belarus does not have a strong history of independence and could be brought back into Russia’s orbit. Belarus might very well rejoin Russia after its dictator Lukaschenko (age 64) moves on to wherever he ends up. These could reconstitute a new force if they could be brought into Russia’s orbit. Some stats:
This adds up. It is more significant demographically than economically. The per capita income of Uzbekistan is $1,491 per year and Kyrgyzstan and Tajikistan are worse. This recombined country would move from being the 12th richest in the world up to being the 10th richest, ahead of Canada but behind Italy.
Now there are three countries in the Caususus: Georgia, Azerbaijain, and Armenia and four odd political entities (Abkhazia, North Ossetia, Artsakh and Chechnya). Of the three former Soviet countries, Georgia is openly hostile to Russia (and Abkhazia and North Ossetia have been carved from it) and Azerbaijain and Armenia are hostile to each other. They fought a war over the province of Nagorno-Karabakh from 1988-1994, which Armenia won. It is now the Republic of Artsakh.
Only Armenia is a member of the Eurasian Union. It will be difficult for Russia to bring these three nations into its fold for a number of reasons, but again they remain relatively isolated with only Iran and Turkey as the neighbors in the region. So…lets us assume this somehow happens:
They are all pretty poor, with Azerbaijan having a per capita income of $4,141 and Georgia and Armenia having similar slightly lower numbers.This really does not get a new Russia Empire back to being a world power. Italy still has a larger GDP.
This now assembles 10 of the original 15 republics together. The three Baltic states are out of reach without a world war, and that leaves only Ukraine and Moldova.
Note that the Ukrainian population figures excludes Crimea and Sevastopol but includes Lugansk and Donetsk. The per capita income of Ukraine is $2,583 and Moldova is $2,280.
It is clear that if one was going to re-constitute the Soviet Union/Russian Empire that Ukraine is the real prize here. Some argue that this is what the conflict in 2013-2014 was about, and is the source of the continued conflict over Crimea, Lugansk and Donetsk.
P.S. The stats for the three Baltic states are: