Ukrainian War Developments

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Bill Blazo

Junior Member
Registered Member
Russia doesn't have an industrial base that is geared towards becoming high-income. Putin has consciously steered the country towards "maximum resilience" for almost a full decade now, trying to derisk the economy and creating "Fortress Russia". The price paid was slow growth in exchange for building a country that is (almost) sanctions proof.

That gives Russia tremendous survivability, but it ensures that it will remain stuck in the slow lane for the foreseeable future. China can help somewhat, but it is unrealistic to expect every single private Chinese firm to sacrifice the much more lucrative Western markets for a country whose economy is smaller than Italy's. It will be a balancing act for Beijing, and Russia will have to accept that it won't get everything it wants from China as part of that balancing act.
Almost every metric in what passes for economics these days needs to come with huge red flags and blazing bullhorns. Russia has the sixth largest economy in the world if you’re adjusting GDP by purchasing power, almost twice the size of Italy. But the truth is that, for reasons I explained in this forum earlier, GDP is an absolutely terrible metric of productivity or living standards. It should never be used to assess economic scale (ie the "size" of a country's economy). The fundamental problem with doing so is that economists aggregate through prices, which are unstable units of measurement, and thus they are forced to adjust for inflation and keep prices "constant" by picking an arbitrary point in time. This basic problem impacts even the fancy chain-weighted methods introduced by the Bureau of Economic Analysis in the 1990s. That's why the chain-weighted "real" GDP of the US in 2014 was $16 trillion if you're using 2009 prices as a reference and $17 trillion if you're using 2012 prices as a reference. That's a $1 trillion difference for reference markers that are only three years apart. What's the real number, you may ask? There isn't one. That's the point. Depending on how you decide to aggregate, you can come up with thousands and potentially millions of different GDP figures for the same country in the same year.

A more reliable and stable metric of economic scale is energy consumption. It doesn't have the aggregation problems that financial metrics do. In 2020, Russia used about 28 exajoules of energy, the fourth highest in the world, and almost three and a half times more than France (link below). Energy consumption is by far the best measure of national power, because it gets to core issues like what countries can actually do with the resources they have (instead of how those resources are priced and financialized for profit).

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4Runner

Junior Member
Registered Member
Russia doesn't have an industrial base that is geared towards becoming high-income. Putin has consciously steered the country towards "maximum resilience" for almost a full decade now, trying to derisk the economy and creating "Fortress Russia". The price paid was slow growth in exchange for building a country that is (almost) sanctions proof.

That gives Russia tremendous survivability, but it ensures that it will remain stuck in the slow lane for the foreseeable future. China can help somewhat, but it is unrealistic to expect every single private Chinese firm to sacrifice the much more lucrative Western markets for a country whose economy is smaller than Italy's. It will be a balancing act for Beijing, and Russia will have to accept that it won't get everything it wants from China as part of that balancing act.
I differ. What Russia really lacks is know-how for commercialization. If you read the history of AliExpress vis-a-vis Russia Mail and Post system, you can get a clear picture what Russia really needs and what China can really offer.

It does not take much for Russia to become a mid-OECD level, if Russians take their hats in hands and learn commerce (and marketing and capitalism) from the Chinese. So basically it is an ego thing. They have all the hard (real) ingredients to achieve a mid-OECD level.
 

Overbom

Brigadier
Registered Member
I differ. What Russia really lacks is know-how for commercialization. If you read the history of AliExpress vis-a-vis Russia Mail and Post system, you can get a clear picture what Russia really needs and what China can really offer.

It does not take much for Russia to become a mid-OECD level, if Russians take their hats in hands and learn commerce (and marketing and capitalism) from the Chinese. So basically it is an ego thing. They have all the hard (real) ingredients to achieve a mid-OECD level.
What Russia truly lacks is internal reforms. Even Chinese companies have hesitated to seriously invest there in the past due to Russia's uncertain law and judicial environment.

That tells you a lot when you realise that Chinese companies are even willing to invest in African dictatorships which are known for instability...
 

FairAndUnbiased

Brigadier
Registered Member
Actually not - it's economic MAD by both sides hurting themselves trying to hurt the other part just a little bit more.
If things keep escalating like this we might cross the line where a wider hot war becomes unavoidable.
There's nothing a hot war between EU and Russia can solve because those pipelines are under Russian control. Nothing EU does militarily can open the pipelines again.
 

gelgoog

Lieutenant General
Registered Member
BTR-82A light tank seems quite popular due to good mobility, heavy firepower, amphibious ability, fast road speed.
Yes this is a pretty good upgrade. For the type of vehicle it is. Compared with older vehicles they replaced two lower power engines for a single high power one. They added splinter nets inside. And the new turret which allows high elevation of the gun is also really nice.
They are replacing older vehicles with this upgrade. And they are doing it at a pretty fast clip.

EU can do a lot worse (and more stupid too) than the current level of support to Ukraine.
No-fly zones, heavy armament, air planes ect. Even direct intervention.
They would risk getting hit with tactical nukes in that case. You can't do a no-fly zone over Ukraine without hundreds of aircraft. They would have to pool those. And then the Russians would hit their concentration areas.

How granular is the gas infrastructure between Russia and Europe? Can Russia actually turn off the gas to specific countries while supplying it to others?
The Russians can cut the amount of gas that goes to the pipe by that amount. The EU spent quite a lot of money making gas pipelines reversible, so a lot of it can be switched around. But not 100%. And you can't pipe what you don't have.

Man, the U.S. sure is an energy hog
The US switched from coal and oil to natural gas for electricity generation in the 1990s. And yes they use a lot of energy.

I wonder how long it would take to have a new gasline up and pumping at China speed?
The time it seems to take is like 4 years to build a pipeline from start of construction to first gas. Then at least 2 years or more to ramp up the gas flow through the pipe.

The "Power of Siberia" started construction in 2017, and started pumping into China in 2019. Give and take a few months, I guess 3 years? They already announced "Power of Siberia II", when Putin was attending the Winter Olympics, IIRC.
Power of Siberia 2, which was approved, is a gas connection from Sakhalin to the same entry point into China as Power of Siberia.
The big one will be Soyuz Vostok (which confusingly they used to call Power of Siberia 2). They have already surveyed the route and Gazprom paid a contractor to make the detailed construction project just this month. This pipeline will go from Yamal to Northern China through Mongolia. This is a big boost for Mongolia too which is highly dependent on coal for energy generation and has really harsh weather. Their capital has huge amounts of air pollution.

Russia doesn't have an industrial base that is geared towards becoming high-income. Putin has consciously steered the country towards "maximum resilience" for almost a full decade now, trying to derisk the economy and creating "Fortress Russia". The price paid was slow growth in exchange for building a country that is (almost) sanctions proof.
Given Russia's resource base the "fast growth" would be extracting and processing resources to sell abroad. Which is what they already do. If it was not for the military Russia would have little high tech industry. Just look at Australia. They can't even make cars. Or Canada. Where is it's high tech industry? Countries which develop a high tech industry do this because they need to pay for the energy with something. And that has to be high value add industries. Luxuries or high tech or something like that. Countries with resources can use those to get what they need. I think for Russia's economy to grow they would have had to improve labor productivity. But that is hard to do in a country which is basically a freezer with huge distances to cover. And had they done that now they would be screwed with the cut of their semiconductor imports.

That gives Russia tremendous survivability, but it ensures that it will remain stuck in the slow lane for the foreseeable future. China can help somewhat, but it is unrealistic to expect every single private Chinese firm to sacrifice the much more lucrative Western markets for a country whose economy is smaller than Italy's. It will be a balancing act for Beijing, and Russia will have to accept that it won't get everything it wants from China as part of that balancing act.
I get what you mean. But thinking their economy is smaller than Italy's is really shortsighted. You are comparing it in GDP USD terms. The ruble has been depressed in value ever since 2014. In GDP PPP it is around the size of Germany.
 

Abominable

Major
Registered Member
Russia doesn't have an industrial base that is geared towards becoming high-income. Putin has consciously steered the country towards "maximum resilience" for almost a full decade now, trying to derisk the economy and creating "Fortress Russia". The price paid was slow growth in exchange for building a country that is (almost) sanctions proof.

That gives Russia tremendous survivability, but it ensures that it will remain stuck in the slow lane for the foreseeable future. China can help somewhat, but it is unrealistic to expect every single private Chinese firm to sacrifice the much more lucrative Western markets for a country whose economy is smaller than Italy's. It will be a balancing act for Beijing, and Russia will have to accept that it won't get everything it wants from China as part of that balancing act.
The Europe buying Chinese products isn't an act of charity by them, they do so because it makes economic sense for them as much as it does China. Also I don't think the west will remain high income much longer, they'll transition to a high middle income region. Richer than Russia but not by much.

Second, we've had 10 years of increasing hostility which morphed into outright hostility for the past 4-5 years. At some point it will be inevitable that the western markets would become closed to China, even if Russia didn't exist. Even though it's smaller and poorer, Russia is a much more reliable market.

Not saying now is the time to decouple, but it is better to do it on Chinese terms than European/American terms.
 

4Runner

Junior Member
Registered Member
What Russia truly lacks is internal reforms. Even Chinese companies have hesitated to seriously invest there in the past due to Russia's uncertain law and judicial environment.

That tells you a lot when you realise that Chinese companies are even willing to invest in African dictatorships which are known for instability...
Good point. Global commerce tells and votes.
 

Anlsvrthng

Captain
Registered Member
Western Europe was dealing with social unrest, economic downturn and high fuel prices before Putin stepped into Ukraine, it was pretty close to the 70s already. You don't think things are going to get much worse than that time period if Europe suddenly decides to stop using Russian gas and oil?

Russia post USSR lost 50% of their GDP in less than a decade, and it was already pretty low. Whatever the outcome of this war is it won't be as bad as that.
Just clarify, th economic downturn in eastern europe / CCCP was way more severe than the great depression anywhere.


It is not comparable with anything happened in the west in the past 150 years.
 
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Abominable

Major
Registered Member
I can say with much confidence albeit somewhat anecdotal that today isn't even close to how bleak it was back then.
We still have a very long way to fall before it reaches that low. At least from my spoiled north European perspective where Russian gas and oil have little sway.
That means very little. You'll soon be forced to ration Norwegian gas along with the rest of Europe.
 
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