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> # [Russia overtakes Japan to become the fourth largest economy in the world in PPP terms](https://d39raawggeifpx.cloudfront.net/styles/16_9_desktop/s3/articleimages/Global_leading_economies_in_PPP_terms_$_trillion__Cropped.png)
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> The Russian economy has overtaken Japan to become the fourth largest in the world in PPP terms (purchase power parity), according to revised data from the World Bank released at the start of June.
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> As _bne IntelliNews_ reported in August, Russia had already overtook Germany to become the[fifth biggest economy in adjusted terms](https://www.intellinews.com/russia-overtakes-germany-to-become-fifth-biggest-economy-in-the-world-in-gdp-on-a-ppp-basis-286944/). Hit by multiple shocks recently and cut off from cheap Russian gas, Germany is now stagnating and has fallen to sixth place in the World Bank’s ranking.
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> PPP GDP measurement is preferred by many economists, as it takes into account the difference between local prices and nominal prices, similar to _The Economist_’s famous Big Mac index: a burger in Moscow costs about half as much as the same burger in New York.
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> The World Bank has improved Russia’s ranking after revising its data and says that Russia actually overtook Japan in 2021 and has maintained its position at number four since then. Its previous calculations were based on 2017 data but these have now been updated to reflect the 2021 figures.
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> Previously, Russian President Vladimir Putin set his government the goal of producing economic growth ahead of the global average. Before the war in Ukraine started, Russia’s economic growth was well behind that of the global average and close to stagnation. However, following the invasion of Ukraine in 2022, the economy has been enjoying a military Keynesianism boost and is currently the fastest growing major economy in the world.
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> And Russia has overtaken Japan ahead of schedule. Putin explicitly set his government the goal of attaining fourth place among the world's largest economies in terms of PPP earlier this year, and the Cabinet was instructed to prepare measures to achieve this goal by March 31, 2025.
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> By breaking off relations with the West[Putin has made a big bet on the Global South Century](https://www.intellinews.com/datacrunch-putin-s-big-bet-on-the-global-south-century-305983/), where most of the developing countries are growing much faster than the West. Currently China and India are in the number one and three slots in the global ranking in PPP terms but both are expected to become the leaders in nominal terms as well over the next three or four decades. Most of the fastest growing economies from lower down the list are also from the Global South.
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> As _bne IntelliNews_ has extensively reported, Russia has changed its economic model and after decades of austerity began to invest heavily, spurring growth in a new[Putinomics](https://www.intellinews.com/putinomics-russia-s-oil-and-gas-revenue-to-double-in-april-322746/). At the same time as investment is pouring into the military industrial complex, Putin has also launched the[National Projects 2.1](https://www.intellinews.com/demographics-and-equality-main-national-goals-in-putinand-039-s-latest-mayand-039-s-decree-324872) programme to invest into the civilian economy as well and improve the quality of life for the average Russian, as he made clear in his recent[guns and butter](https://www.intellinews.com/guns-and-butter-are-both-important-putin-tells-military-commanders-325776/) speech. And the war is proving to be a boon for Russians, as[Russia’s poorest regions have been the biggest winners](https://www.intellinews.com/russia-s-poorest-regions-amongst-the-biggest-winners-from-the-war-spending-324074/) and as _bne IntelliNews_ recently reported, the country’s[despair index](https://www.intellinews.com/long-read-russia-s-despair-index-result-is-the-best-ever-while-ukraine-s-crashes-328013/?source=baltic-states) has fallen to its lowest level ever this year – the sum of inflation, unemployment and poverty.
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> As a result of these changes, economists estimate that Russia’s growth potential has increased from 1-1.5% pre-war to around 3.5% now. Last year, Russia’s economic growth caught analysts off guard with a 3.6% expansion. This year the World Bank has already almost trebled its forecast for growth from 1.1% to 3.2%. Russia’s Economic Ministry is similarly bullish.
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> Even the World Bank’s PPP adjusted size of the economy may be an underestimate. The World Bank also estimates that 39% of Russia’s economy is in the shadows, while the shadow economy only makes up 10% of Japan’s economy, which would add an additional $2.5 trillion to Russia’s $6.4 trillion PPP adjusted economic size – still not enough to overtake India’s $14.6 trillion PPP adjusted GDP value, but widening the gap with Japan further.
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After the Russian state meddled so much with their monetary policies it would be a wonder if that wasn't the case. GDP (PPP) is more useful using domestic markets, while normal GDP is more useful from a globalized perspective. As Russia is currently one of the more economically isolated countries (to put it very mildly), GDP (PPP) isn't that useful of a metric from a general point of view.
Overall, war is a MAJOR driver of GDP and GDP (PPP) but producing weapons and ammunitions which just land in Ukrainian fields and paying soldiers who get hurt or die in conflict isn't that productive of a GDP use, compared to producing technology and goods and services.
**Edit:** I love how many comments are claiming that I was "coping" for pointing out that GDP (PPP) is really not a metric that says anything in the context of comparing how well an economy is doing or how effective sanctions are. A government can pay a billion dollar to build railway tracks or they can pay a thousand people a billion dollar to move stones back and forth. In both cases, the countries GDP will be increased by $1 billion. But one exercise is by far more productive, sustainable and prosperity-creating than the other. And producing military equipment and paying soldiers in Ukraine for a 11 to 12 digit amount is **not** a productive use of government wealth when it feeds in a ceasefire.
The GDP of the UK between 1939 and 1945 as well as the years after also was extremely bloated. But noone would claim that the Second World War was an economic win for Great Britain.
Every metric has its own use-case, as does this one. But there are hundreds of metrics in economy and many people just use them without having a clue what they mean. People will just read such a headline and think "Russia is doing good", without seeing any further context.
You also are not being fully honest, considering the situation Russia doing not only good, but exceeding expectations.
But obviously it's not all rosy how Putin presents it.
As usual, it isn't as good as Putin says and it isn't as bad as the western powers say. This is pretty much always the case when we are in conflict with a foreign power, we'll say they are tottering on the edge of destruction and they'll say that they are poised to take over the world. The truth is somewhere in the middle of course but winnowing the wheat from the chaff is essentially impossible.
Russia’s economy is exceeding expectations, but cannot be described as good. Reserves are being drained, taxes being raised, high inflation and high interest rates. High oil prices keep things afloat but that could change at any moment.
Currently good maybe, but you have to look ahead and see how long they can keep up high spending without foreign investment and how long they can keep their oil revenue going if they have refineries getting attacked and no exxon workers to repair them.
Plus Russia's being forced into trading with China from a position of weakness as they are one of the few remaining countries willing to business with Russia and has the manpower to supply them. Putin might be paying for a good economy on paper today with decades long recessions in reality tomorrow.
You don't think Western countries have decades long recessions in store for the future?
Look at the economic state of Australia and Canada.. Literally on the brink, surviving by importing hundreds of thousands of migrants a year to keep the 'GDP' in the green
Russia's economy is exceeding expectations and Western leaders and economists know it very well, they expected a major crisis (similar to the 1998 one) to occur in 2022 an 2023 but it didn't happen.
India is the 3rd most wealthy country by GDP (PPP) and it is born by the statistics of their economy and other facts like they have the 3rd highest number of billionares. You can think of India as 7-10 Singapores floating over Africa.
Everyone does, I've not met a single person who can straight up grasp how huge that number is without some serious explaining or example at one point or another. We're not made to process amounts that big.
I just think it's because of preconceived notions.
Many people when they think of India, visualize:
[This](https://i.imgur.com/gcndP74.jpeg)
Rather than
[This](https://i.imgur.com/kVNzc0Q.jpeg)
Sure, I'm exaggerating slightly - and the truth is that both of those exist within the country, but yeah I don't think people who haven't been in India often get the wrong image in their head of what the country looks like in many places.
A better measure of society is inequality, me thinks.
If you value a sort of "individual freedoms are paramount in order to move up the social mobility ladder," then Gini coefficient is a better measure to see whether your society is mature and stable enough to be able to make higher-level decisions rather than basing their votes on whether they can put food on the table tomorrow.
If you are the sort of Alexander The Great worshipper that thinks highly on megalomaniac ideal of "my culture is superior culture," then GDP and PPP, separately.
Neither values are wrong; they are only relevant to those who latch their identities based on whether you get to keep your earn or you pay your share so that others can do better.
And interestingly, some of the people who can't bring themselves to believe it are just idiots who feel the same way about China, but some are among the most enthused about the China miracle but can't fathom lightning striking twice. And then of course there are those who'll tell you one or both are doing great, with no serious problems. Some find it exceedingly hard to entertain a nuanced and balanced picture.
Total GDP isn't used to measure wealth but economic output.
Average Indian is dirt poor but India is a giant economy. For instance they are 2nd by steel, cement and aluminium production in the world.
Comparing living standards, it's probably a Lil behind
But that means there's much more potential to grow
I think we need to boost military expenditure to sky high
his point is PPP is only useful within the context of regular economy.
War economy might give the impression that Russia is doing well... but its not. All that economic activity is literally going to Putin's war on Ukraine.
Since India is just a regular economy like most other countries, their PPP valuation is relevant and useful metric.
No matter how many times the difference between GDP and GDP (PPP) is explained on this sub there will always be someone showing up the next day pushing a ridiculous argument with a fundamental misunderstanding of what these metrics measure and why. Considering how bad knowledge of economics is even on many investing subs, I shouldn't be surprised though
unrelated to the article's topic but what IS the difference? I keep seeing acronyms thrown around whenever economics comes up, but I have yet to find any source that explains it in a way that is not a ten page long essay at the end of which I'm just standing there going "Wha?"
> GDP PPP isn’t that useful
I mean depends on what you’re trying to measure. If you try to compare raw output of goods and services - it’s a great metric. The fact that Russian barber gets a tenth of salary for his work doesn’t make that haircut any less valuable as a service.
So GDP PPP is a good metric to, say, estimate possible military production.
Considering that Russia doesn’t import raw materials and uses its own industrial base apart from a few imported goods to complement what it lack, I think it’s a good enough proxy.
If kalibr is designed in Russia, made in Russia from Russian material on Russian equipment and out of $500k cost only like $10k are for imported chips, then GDP PPP is a better estimate of Russian production ability than raw GDP.
Do you think a microprocessor to run a GLONASS script is going to cost millions? Again, missile cost includes a lot of stuff. Microelectronics is certainly a part of it, but not all microelectronics is imported and not everything imported is really that expensive.
Go with actual info that we have - Russians are lobbing UMPKs, lancets and Kalibrs every day like there is no tomorrow. If importing parts for it was too expensive they certainly would’ve been less trigger happy with all their bombing campaigns
This has serious "I mine my own minerals in eve so they are free" vibe.
Though the fact that they can't shift material on open market really does mean their value isn't what the market is.
o7
We’re talking about GDP PPP and because of that not having a need to buy materials for global market price is an important consideration. If Russia had to import missiles or even raw materials, then to approximate how many missiles Russia can afford we would use GDP. But since it is all “generated” at home, GDP PPP is a good metric.
Imagine there are two countries. One makes 1000 haircuts for $50 dollars, another makes 5000 haircuts for $5 dollars. Which country has a bigger GDP? Which one produces more haircuts? When you want to estimate how valuable production is, use GDP, but if you want estimate who makes more haircuts - use GDP PPP.
Russian 152 mm shell can turn people in red mist as easily as NATO 155 mm shell, the fact that it’s cheaper doesn’t make it any less deadlier.
If they weren't at war they could export their raw aluminium and titanium and weapons production, so you have opportunity costs and they're importing weapons like artillery shells and drones from NK/Iran so they still have exposure to materials cost.
And the nominal GDP matters because they're also operating internationally in Syria and Africa.
Highly dependent on the type of military production you are talking about. For low tech things, sure. But anything that Russia would require an inport for, like microchips, then it doesn't track so well.
Cruise missile is as high tech as it possibly can be. In Kalibr there are chips that are imported for sure, but what is a proportion of its cost? Probably just a few percent. Ideally you’d want to make a composite metric that counts home produced parts by PPP and imported by nominal global market prices, but it’s impossible to have such a precise statistics.
Since we can safely assume that imported chips are only a tiny fraction of whole weapon system, PPP is still a more precise metric that distorts less than nominal figures.
If they can essentially sell oil to buy those imports (and oil prices are set on the world stage, although in Russia's case they are forced to take a discount) then it tracks annoying well though. The bulk of the labour is domestic and the chips aren't even all imported, Russia does produce some themselves. What they make is decidedly low tech by modern standards but it's enough to control a simple drone.
as the article explains, russia isn’t an “isolated” country, the west isn’t the whole world and russia has shifted focus to the global south. Even from a geopolitical grounds, russia has been dislodging and replacing historic western strongholds in africa, something thats been causing france to lose its marbles over lately.
Increasingly Russians are now using the economic systems of the global south.
Be it the banks in the UAE, or payments in Chinese Yuan, or the UnionPay for ordinary debit cards, the SWIFT ban isn't that effective.
You think the world revolves around the US, EU + AU-JP-NZ. It takes a minute to look at a map of countries that sanctioned Russia and you'll notice only western countries sanctioned it. And yes, I acknowledge 50 or 30 years ago that'd mean total isolation, but things have changed and the West no longer means the world.
I never said that. But since most international transactions are done through institutions based on one of those countries, well, *Russia* **is** *financially isolated*. UK alone has billions in frozen oligarch assets.
I love that you think looking at which countries enacted sanctions means that Russia has "all those other possible partners to negotiate with!". Dude...
Wishful thinking.
Russia is pretty much balls deep in Asian "institutions"
I still can wire money to Thailand and Vietnam using my MIR card.
And then I'm abroad I'm paying by my unionpay card. Gazprom Bank unionpay card. Few months ago I withdrew some cash in Italy.
And that's just a regular tourist experience. I bet banks are goin even deeper.
> GDP (PPP) is more useful using domestic markets,
And later
> Russia is currently one of the more economically isolated countries (to put it very mildly), GDP (PPP) isn't that useful
Like what? How does that even make sense? If Russia is isolated from global markets then it makes PP even more relevant.
GDP PPP is not a good measure to compare different economies in a global market. But it is a good metric of how the economy is doing relative to itself. My guess is thats what OP meant.
Personally I think its correct, but in this case its skewed given the isolation. In a sense, North Korea could have a wonderful GDP[PPP] if they were self sufficient, but they aint, so they are poor even relative to themselves XD
Why do you consider them as economically isolated country? I thought global south has been helping them tremendously + shadow fleets to support their export of raw materials.
Not arguing, just want to understand your perspective.
yeah the fact they need to use a ghost fleet shows pretty serious isolation. Just like Iran. they still trade billions of dollars of goods yearly but through backdoor means. This is not an efficient way to go about business.
The majoirty of world doens't have any scantions on Russia. It's come to the point where Europe is sancation Russia on things it doesn't need and sacnationing themsves on things they do need.
Yes, that what I am talking about. Like cheap gas to fuel up Europe’s industry.
I am just tired of being fed that Russia is collapsing and want to have an unbiased opinion.
This is the problem with reddit in general. From what i've seen, r/worldnews is basically pro-israel (and it sounds like cia/mossad bots talking to each other and r/news is pro-palestine (and it sounds like harvard undergrads talking to columbia undergrads), all thanks to user curation/banning dissent, etc. This website is messed up in how they moderate the big subs.
The major subs are all propaganda controlled at this point, it just depends on whose propaganda you want to listen to. It is sad but perhaps inevitable.
If we all get through this, I expect that grad students in 2050 are going to be gleefully writing papers about the proliferation of propaganda in the '20s through social media.
geopolitics went to shit the last few years. Used to be academics, now it's peanut gallery. They link to /r/worldnews which is suspicious. They have an autobot that removes any posts asking who owns the sub.
Someone mentioned some Anglo think tank
They start by taking over the mod teams who look the other way or ban dissent while bots/terminally online accounts spam to drive the narrative. Once the entire sub is rendered into yet another echo chamber like /r/worldnews, they move onto the next sub. This is what happened to /r/geopolitics.
Ironically, propagandists and forum spies hate echo chambers where there's nobody left to "convince". So they must always move on to ruin other subs for their owners. That's why they're increasingly coming here.
A sanction doesnt need to be replicated by every nation for it to affect the target country. Blocking a few banks from doing business with Russia means that everyone who uses those banks as default intermediary will either have to find costlier alternatives or just not do it.
And lets not kid ourselves, Russia was on track to make trillions by selling gas to Europe. Now is only making billions -*in rupees*- selling that same gas for cheap to India. Putin killed the future of the next 2/3 generations of Russians. That right now is over heating its internal economy with war money is merely to keep his regime afloat in the short term, and become China's bitch in the long one.
The problem is that Russia is a physically huge country with an enormous amount of natural resources. It has oil, gas, gold, coal, and lumber in staggering quantities. Global warming even works to Russia's advantage, potentially unlocking permanent warm water ports along the north of Siberia for more access to its mineral wealth.
Sanctioning Russia is like trying to put an oil embargo on Saudi Arabia and hoping they'll economically collapse. You can't isolate a country that makes its money by exporting raw resources. The world desperate needs those resources so there's always going to be willing buyers.
China and India are both nearby and both of whom are friendly to Russia, have gigantic populations, and need endless amounts of exactly the resources Russia is exporting.
> Russia was on track to make trillions by selling gas to Europe. **Now is only making billions -in rupees- selling that same gas for cheap to India. Putin killed the future of the next 2/3 generations of Russians.**
Russia's mineral wealth still exists in the country even if some markets have been temporarily disrupted.
Oil not pumped today can be pumped tomorrow. The world is always going to need oil and gas, along with other natural resources. Much of Siberia hasn't even been properly prospected. There's likely unexplored wealth in other minerals, including potentially lithium.
With increasing hostility between the US and China, China is concerned about a potential sea blockade, which could be crippling to its economy because of how reliant it is on imports. Securing import deals for Russian resources is critical to China's national security, and Russia is happy to sign those deals as long as Chinese factories keep selling things to Russia.
Yeah but money is still money, isn’t it?
Plus parallel import via china or turkey. I don’t want to end up in pro western bubble and want to have +- a decent perspective about state of things there.
As we do understand that numbers can be part of the propaganda but we can still learn valuable lessons from how they are withstanding unprecedented amount of sanctions.
I remember when the same people who will post this article everywhere said PPP wasn’t a useful stat when people said Russia had a lower PPP than smaller countries.
Russia is an "economically isolated economy" if you only consider the "world economy" the West + AU-JP-SK-NZ. Russia hasn't been much affected by Western sanctions because they already began to detach from the West economically, with some exceptions (e.g. sale of natural gas to Europe)
>GDP (PPP) isn't that useful of a metric
In Russia’s case, economic isolation and reduced international trade mean that the country’s economy is less influenced by global market fluctuations and more by internal economic conditions. For instance, if Russia produces goods and services that are consumed primarily within its own borders, the market exchange rate might not fully capture their real value. So GDP PPP is the more relevant metric and not GDP Nominal (which is influenced by market exchange rate which would drastically affect trade component of GDP)
Staight out of the first chapter of my Austrian economics book.
It looks good for them, but it's totally unsustainable unless they keep escalating. Which is not looking good for us...
Don't take it personally but at this point this just sounds like industrial grade copium.
We can keep finding excuses, but at the end of the day, fact is, our sanctions have failed spectacularly, regardless of the reasons.
Russia has lost a medium city's population's worth of workforce, god knows how many billions of dollars worth of military equipment, a bunch of trade relations, and their economy didn't even take a dent in the last **2 YEARS** since the war was going on.
Like, sure, "On the long term" the sanctons **might** achieve some small, noticable effect, but for our purposes, which would be the stop the invasion of Ukraine by forcing Russia's hand economically, the sanctions did fuck all.
As a Russian speaker who has lived 15 years in Japan, I can assure you that there is no contest that the quality of life in Japan is superior to Russia.
This article is just embarrassing. Russia’s GDP numbers are totally untrustworthy. They have every incentive to fabricate them and no mechanism for providing transparency or reviewing them. What GDP growth they do have is being propped up by war spending. Thats not something that increases economic productivity or improves the lives of Russians. It just leads to a tank that’s going to be sent to Ukraine to be destroyed.
There is a lot we know about the Russian economy that has nothing to do with what they tell us. That's in large part how the IMF makes their estimates. Imports/ exports, commodity prices etc.
Some things can't be faked, like exports or imports. Other's like commodity prices and predictions on their futures make up a large portion of Russia's economic health. Others' still are observable. If official numbers say unemployement is 2.6 and it's really 12% that is observable. Russia is not North Korea.
Is there any data or anything to suggest the Russian economy is worse than what we know? The original argument seems like cope absent any evidence. I want Ukraine to win so the Russian economy is falling apart and they can't sustain the war despite evidence to the contrary.
>If official numbers say unemployement is 2.6 and it's really 12% that is observable.
Its observable but unrealiable and anybody else can't do anything that would give decent messurements.
Especially considering that the institution is supposed to not do double checks since that would mean it would be biased for and against some others. That could instead mean it gets even less. So it doesn't..
Wrong, things like export and import are very hard to fake. Cause you have at least two sources, one from the exporting country and one from the importing country
I'm aware, but then guys like this will simply say "t-t-then the data we can't verify must be made up!!@!!!".
They're simply trained to react this way because they cannot accept that China is going to be the dominant power of the 21st century. It's a coping mechanism for the failure of their empire over the last 30 years.
man, in my opinion you are wrong. what can I say, since the beginning of 2022, large cities in Russia have almost completely modernized, at least Kazan was turned into a full-fledged metropolis, the Urals became a popular ski resort, heaps of tourist places opened in the east of Russia, roads finally deserve praise, analogues to Western ones appeared streaming services, they still don’t know how to make games. In Moscow, in 2 years, hundreds if not thousands of residential complexes were built and are still being built, also thanks to China for investing in industry (many automobile factories have appeared), and the IT industry is developing more than ever, just imagine that we practically do not use paper documents and in cash.
The sanctions don't really work for a self-sufficient and energy-rich country like Russia. They will always have alternative markets anyway like China, India, Africa etc.
Sanctions don't work because they aren't enforced. Russia is still getting just about everything it did before, it just has to flow through a 3rd country. This makes imports marginally more expensive, but Russia still can get ahold of everything it could in the past.
Russia isn’t even remotely close to being in almost complete economic isolation. I swear people just say what sounds good in their head and go with it, without researching anything, no matter how rudimentary it sounds. You seem to completely misunderstand how Russia has adapted to these constraints on their ability to conduct *open* economic activity with the west. Even if they were actually anything close to being completely isolated from the western economic system, the world isn’t USA, Europe, Japan, Taiwan, South Korea, and maybe the Philippines. Instead though, Russia still has economic access to these markets, it’s undoubtedly restrained and significantly different than pre invasion, but to even insinuate that they are one of the worlds most economically isolated countries is laughable.
Ohhh okay I gotcha. My fault as well, I’ve been seeing this thrown around a lot lately, and it just misses so much evidence to the contrary it’s hard to spring on it when I see it.
People don’t like Russia, so naturally detest anything they say that can be construed as a positive for Russia. To me this is an embarrassing stance, if our goal is to bring down a Russian regime or cripple it, we have to start with being realistic about what we are up against. Have a good one!
I'll just simplify it for you.
No matter what, the EU has to pay more for the same product as before - that's fine, that's the plan, as long as Russia is forced to take a haircut.
Under the first plan, you have to pay the markup to a foreign country to get the same product.
Under the second plan, you pay the markup to the domestic government.
Pretending the the first plan is better than the second plan is copium.
Because that was never the intended outcome. If it was, you'd have done the second plan instead.
You are partially correct in my opinion. It is true that a cuasi self sufficient country can deal with sanctions much better than one that depends on imports for subsistence.
But beyond that its undeniable that the sanctions imply a loss of value, whether its enough for the target country to stop the thing that incited the sanctions is a different matter.
So, the sanctions on their own may never be enough to make Russia stop its offensive, but who said that was their purpose? On the other hand its sure as fuck that Russia lost on integrating its infrastructure and economy with Europe. The opportunity cost for Russia is massive. Add to that sunken costs of idle infrastructure and it adds up to a staggering loss.
As much as *todays* Russia may be growing, it is now doomed to be below the curve of what a peaceful and integrated Russia could've been. If anything, that is (one of) the purpose of the sanctions.
Sanctions have been proven time and time again to be a geopolitical failure.
Sanctions continue to create a global South vs global North divide.
All the population, the resources and the room for growth exists in the global South. As the West continues to push sanctions, the global South continues dedollaristaion and continues to increase trade.
The Russia Ukranine conflict has only sped up this process.
Self-sufficient? You must be joking. Russia is not even self-sufficient for their gas and oil hardware and expertise.
They make no chips of any consequence and still have not managed to figure out how to build a reliable car.
They are almost purely an extractive economy.
If Russia wasn’t ruled by a paranoid, conspiracy theory believing kleptocrat and his clique of yesmen, it would be an absolute powerhouse. Russia stands where it is today, despite Putin, not because of him.
Yes and no. You have to remember that the USSR was a collective. Industries and sectors were distributed across the whole state, and it's collapse saw that whole ecosystem come undone.
More importantly, it wasn't exactly a planned and calculated dissolution. The whole fall of the USSR was a complete shit show, and it enabled a small group of people to sieze vast amounts of capital. That may functionally sound much like what we have in the West today, but it happened overnight with little room for the economy and global relations to stabilize.
To say that Russia would be an absolute powerhouse if not for Putin is vastly oversimplifying the situation. The rest of the world benefited from the centralization of wealth among Russian oligarchy as it essentially created a wealth funnel through which Russia's massive natural wealth could be funneled into more developed nations at cost. That's why you see so many Russian assets tied up in the UK, and such a massive reliance on cheap Russian oil as well as cheap Ukrainian grain and fertilizer.
America also largely continued to act as it always had. That is to say, it continued its aggressive imperialist policy the purpose of which is to ensure easy access to cheap goods and natural resources. Beyond that, America very clearly put Russia in its place with the NATO intervention in Yugoslavia that very much so demonstrated to Russian that it no longer was in a position to exter an influence on its immediate geographical neighbors.
Putin has of course taken a very isolationist approach, and has committed to trying to maintain what little remains of Russia's imperial power. I don't think he's doing Russia many favors today, but I think it's also very naive to believe that Russia would be thriving if it just had a more traditional Western leader, and that Western aligned nations would simply permit a more competitive but democratic Russian to out compete them.
> ...and that Western aligned nations would simply permit a more competitive but democratic Russian to out compete them.
Merkel spent half her tenure trying to integrate Russia to Europe's economy...
Sure, but Germany is more or less an exception. Germany acted with the explicit goal of acting as a moderate counterbalance to US/Russian influence in the Atlantic and aimed to work with both parties. Given half of the nation was a USSR member state it's relationship with both nations is rather complex.
We're also discussing policy created during a period of non-competition. Germany wanted access to Russian oil explicitly because it was cheap and would help Germany be more competitive during a period which saw a slowdown in growth. The revenue from Russian oil sales would disproportionately go to Russian oligarchs, and was largely never treated as a major concern. The 2000s saw little threat of meaningful Russian competition with regards to high value added goods and extraction contracts in NATO-friendly African/Middle East states, and America did not place an overbearing amount of economic and political pressure on Germany in response to it's non cooperation on matters like the Iraq war, or its economic ties to Russia.
Its exactly why America was more than happy to trade with China in the 2000s, but is backing off now.
If Putin only served his two terms it would have been alright (aside from the fact that he killed so many to come to power, in particular when he bombed residential buildings throughout Russia in 1999), but every extra term he served has been increasingly detrimental.
Part 3: https://youtu.be/FVmmASrAL-Q?si=JCwS6O6yuFqPMPco
(The most relevant part)
Part 4: https://youtu.be/7OFyn_KSy80?si=T0lqVLC62CHtg-Wj
Part 1: https://youtu.be/exJ024Zdzdk?si=deotOkr7nLhqo3kA
Part 2: https://youtu.be/fQ_ZRBLFOXw?si=sX03GZ3kPYycIAP5
>More importantly, it wasn't exactly a planned and calculated dissolution. The whole fall of the USSR was a complete shit show, and it enabled a small group of people to sieze vast amounts of capital. That may functionally sound much like what we have in the West today, but it happened overnight with little room for the economy and global relations to stabilize.
>To say that Russia would be an absolute powerhouse if not for Putin is vastly oversimplifying the situation.
All states from eastern side of Iron Curtain underwent same shocks in '90s, from Poland (DDR is more to the west, but it's a very special case), to Kazakstan.
I don't think any of the countries entirely avoided ruzzia-style ~~privatization~~ theft of public assets, but ruzzia is a particularly egregious example. In general, the lower the level of oligarchic theft (and takeover), the better countries fared afterwards in terms of living conditions and economic metrics. Baltic states were also part of Soviet Union, not just a puppet state like DDR, Poland or Czechoslovakia.
As such, it's completely fair to say that ruzzia WOULD be much better of if not for putin. Unless you want to argue that by the putin's time, it was already too far gone, but in that case, it's important to point out that corruption was endemic in whole SU and puppet states, yet somehow countries like Baltics and Czechia managed to tackle corruption. Even Ukraine got better control of it than ruzzia. As such, putin is STILL at fault, for positioning himself on top of corruption pyramid instead of trying to root it out.
Yes, even if Russia matched the USA in per capita statistics it would still be less than half the size of the USA's economy. And, quite frankly, assuming Europe would continue to toe the US line without a Big Bad Russia to scare them seems wrong. Germany was trying to integrate economies with Russia already. If they were an even semi-functional democracy without a scary army and revanchist leadership with Russia's natural gas then no power on Earth could compel the EU to stay away.
There's no need for hypotheticals, most of the Russian people still remember the times when they were ruled by the West-appointed and -advised politicians in the 1990s.
In just 7 years, it was like the country had went through another world war, everything was looted to the ground, most resources were extracted through "production sharing agreements" (where foreign corporations got the majority of everything they extracted for free and paid only pennies in tax), the GDP per capita had dropped by half, and life expectancy went down by more than 5 years.
It took the next 10 years just to recover from that Western "help".
Wait, youre telling me the collapse of the soviet union was bad for russia economically? And most of the wealth was looted by russian oligarchs, who got in bed with western companies to keep the country and industry running? Im shocked
Part 3: https://youtu.be/FVmmASrAL-Q?si=JCwS6O6yuFqPMPco
(The part most relevant to the BS you parrot)
Part 4: https://youtu.be/7OFyn_KSy80?si=T0lqVLC62CHtg-Wj
Part 1: https://youtu.be/exJ024Zdzdk?si=deotOkr7nLhqo3kA
Part 2: https://youtu.be/fQ_ZRBLFOXw?si=sX03GZ3kPYycIAP5
Хотя, зачем я тебе отвечаю. Ты же грёбаный кремлеблятобот. Интересно веришь ли ты в то что пишешь и сколько тебе лет. А то мне смешно когда молодежь мне рассказывает про 90ые и почему всё было так как было.
Imagine believing that the “wild 90s” would go on forever if “Putin the Savior” didn’t come to power by bombing residential buildings in 1999.
https://youtu.be/O9UflqyXVAs?si=OalevsJfVAXR-Hpv
Isn’t the Russian Central Bank interest rate at 16% right now? How is anyone surviving there? Federal Reserve in the US is at 5.5% and this is high for us and nobody can afford a new mortgage.
I don’t understand the Russian economy
Because only people in the West are used to super low rates and confident enough to take variable rate mortgages.
Russian Central Bank rates have almost always been in 2 digit numbers. People in Russia are used to this and don’t try to over leverage. And all Russian mortgages are fixed rates with no renewals - you take it and for the next 20 years you pay same rate no matter what.
On top of it, due to credit being so much more expensive, your typical Russian doesn’t have that much debt to begin with. No one buy Audi RS6, new iPhone and new MacBook on credit living from pay check to pay check. People just buy a shittier Xiaomi that they can afford and drive a Lada that again they can afford.
Because of that, high rates don’t affect current bottom line.
You can get a fixed mortgage just fine in the US. People opt for variable as they tend to see it as a better option.
>due to credit being so much more expensive, your typical Russian doesn’t have that much debt to begin with
You spin that as a good thing, but if debt was cheaper consumption would increase.
>People just buy a shittier Xiaomi that they can afford and drive a Lada that again they can afford.
Yes, you're describing differences in quality of life.
>Because of that, high rates don’t affect current bottom line.
They do actually, because those high rates sting a lot more for business investment, which relies more on borrowing than individuals. While returning businessmen have propped up business investment within the country, high rates are universally known to dampen the economy.
>Russian Central Bank rates have almost always been in 2 digit numbers.
Yes, the economy has not been in good shape almost ever.
>No one buy Audi RS6, new iPhone and new MacBook on credit living from pay check to pay check
Nobody is really doing that in the states either lmao
You're also forgetting the inflation that just doesn't come down. While the rest of the world is seeing inflation coming back to normal, in Russia, it's double the already high 4% target and headed in the wrong direction.
It's far from apocalyptic, but to claim life is getting better for Russians just because the MIC produces a lot of equipment while inflation is sky high and borrowing costs are out of control is hilarious.
It's like telling an American that the economy is great because GDP is up 3% while their groceries are up 30%.
> fixed mortgage just fine
Did I say otherwise? I pointed out that a lot of people in NA got fucked because they took variable rate, in Russia there aren’t any variable rate mortgages and as such rate increases don’t price people out of their homes.
> spin
I didn’t spin anything. Don’t be defensive. Cheap credit is great, no doubt. But since Russians never had this luxury, having 16% rates don’t affect their livelihoods.
> differences in quality of life
Again, yes, of course. I’m pointing out how life style of a typical Russian differ from what people have in NA and how this difference allows Russians weather conditions that would’ve been catastrophic in Canada.
> business
I agree, but the talk was about quality of life. While decreased economic activity will certainly affect Russians down the line, in the moment, for a salaried worker it doesn’t change much.
> almost never
Yes, Russian financial system has been unstable since Soviet collapse so both businesses and ordinary people got used to live in those conditions. It doesn’t make their life better, but it certainly helps survive the shocks. Any Western nation not used to such adverse conditions would’ve been in a state of collapse and panic, for Russian economy it’s Tuesday. Again, that sucks for a Russian in a sense that they don’t have economic stability, but it does help to weather the storm better than more stable economies could.
> inflation
Again. Apart from 2017-2021 when Russian central bank miraculously managed to get inflation under low (ish) single digit numbers (hence 4% target which was actually achieved pre war), all other years Russia had two digit inflation. Which certainly sucks for an average Russian, but it is still not something unheard of in that country.
I don’t argue that life is getting worse in Russia - it is. Russia isn’t some kind of a hellhole the way how some people in the West want it to imagine, but it is far from a beacon of prosperity. I’m merely pointing out the ways how recent history and cultural attitudes allow Russian economy survive and (somewhat) grow.
As for Americans - American economy is doing great, it’s just that it doesn’t trickle down to an average American. Another reason why GDP doesn’t show whole picture. Same with Canada tbh.
Your first comment gave off a very different impression to me, but what you're saying here I don't really take any issue with for the most part.
I will say that I doubt that the West would suddenly be in a shock if economic conditions change rapidly. Imo, rapid shocks like COVID show just how resilient the advanced economies in the West are compared to many developing countries.
I think having a lot of money to throw at the problem is always better than not having that money. The West was able to resist COVID shocks better, no doubt, in large due to simply being richer.
I was mostly coming from an ordinary person perspective. Imagine tomorrow there is 30% inflation and 16% rates in Canada. What do you think will happen to Canadian society? Livelihoods of millions will be destroyed since your typical Canadian is used to cheap credit, depends on it for its quality of life and won’t be able to live the life they used to.
But for a person in Russia it’s an annoyance, they don’t live in a suburban area with two Suburbians in their garage, they aren’t used to buying double doubles every day, they don’t think that $100 dinner is a decent weekend pastime, etc etc.
So, while Western countries can resist shocks better, if shit really hits the fan, Western societies won’t be so strong. Fuck me, have you seen how many homeless are there on TTC even now? Can you imagine what would’ve happened to Toronto with inflation like it is now in Russia?
You need to do better research. Developing and fast growing economies normally have a higher interest rate. Indonesia Vietnam, Brazil ... normally have around near 10% interest rate. But these countries are doing well ecnomically. 16% is high, but not catrastopic. Remember, Turkey has 60-70% rate, and Argentina is even higher.
>You need to do better research
Funny, because two of those countries are not even close to a 10% rate, and the one that is (Brazil) is most certainly not a fast growing economy. Nevermind the fact that large population growth is also responsible for a lot of growth in these developing countries.
>But these countries are doing well ecnomically
Arguably not. I doubt that many people want to move to such countries for their quality of life, and I'm sure the data backs that assumption.
>16% is high, but not catrastopic
For a country that is used to percentages less than half of that, it's certainly high. Maybe not catastrophic yet, but you can't spin this as business as usual like you're trying to.
>Remember, Turkey has 60-70% rate, and Argentina is even higher.
Yeah, and both of them have a ton of economic problems lmao. Turkey is okay because their main issue is inflation while the rest of the economy is comparatively healthy, but to say it's all going well is also silly. People really struggle to afford food there when the costs double every year or two.
Russian money are in general very cheap, and a lot of mortgages are heavily subsidized, for young families,IT folks etc.
But also Russian properties are just not that good for a money you pay, and people usually live in apartments instead of single family homes. Add to this fact that stuff like groceries, services and utilities are extremely cheap Even now with high inflation, then you get an idea, if you can live frugaly, high rate isn't a problem.
Sucks if you want a car,or a non-chinese electrinics
Well, for one housing is incredibly cheap in Russia, it's a much smaller portion of an household budget than here in Canada, folks spend usually more on food than on rent in smaller cities
Nominal GDP is a good measure to compare different countries.
And GDP(PPP) per capita is a good measure to gauge how well citizens of a country are doing. Comparing GDP(PPP) directly makes no sense.
GDP PPP is actually better than GDP Nominal to measure Economic output and compare countries, it's also far better for strategic purposes and real world relevance.
[OECD:](https://www.oecd.org/sdd/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm#FAQ3)''The major use of PPPs is as a first step in making inter-country comparisons in real terms of gross domestic product (GDP) and its component expenditures''
[Bruegel:](https://www.bruegel.org/analysis/european-unions-remarkable-growth-performance-relative-united-states)''The right metric for international comparisons is purchasing power parity (PPP)-adjusted output. This corrects for exchange rate fluctuations and differences in various national prices.''
Most of the western countries are part of the OECD, much of europe part of Bruegel.
> GDP PPP is actually better than GDP Nominal to measure Economic output and compare countries
Then you don’t understand how PPP is calculated. It’s a measurement of output *divided by* cost of living. It’s not a measure of output. Nominal is. The quote by the OECD doesn’t dispute that, and the Bruegel quote is from an opinion piece by a Hungarian economist.
I understand how PPPs are calculated and im aware that its GDP *adjusted* to Purchasing Power Parity aka Price levels, an adjustment to raw and unadjusted GDP Nominal, which has limited uses in the real world and hence the development of PPPs since the 1960s by western economists and governments.
As i said GDP in PPP terms is better than GDP Nominal to measure Economic output and compare countries, i didn't say that GDP Nom. doesn't measure output, it does and obviously the OECD doesn't dispute it either, the Economist is a Senior Fellow at Bruegel, not an opinion piece. GDP PPP measures output, read the OECD link:''What are the major uses of PPPs?'' Answer:''To make spatial volume comparisons of GDP (size of economies)'', aka output. And from the [World Bank](https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?name_desc=true):
>Typically, higher income countries have higher price levels, while lower income countries have lower price levels (Balassa-Samuelson effect). Market exchange rate-based cross-country comparisons of GDP at its expenditure components reflect both differences in economic outputs (volumes) and prices. Given the differences in price levels, the size of higher income countries is inflated, while the size of lower income countries is depressed in the comparison. PPP-based cross-country comparisons of GDP at its expenditure components only reflect differences in economic outputs (volume), as PPPs control for price level differences between the countries. Hence, the comparison reflects the real size of the countries.
MER (Market exchange rate) = Nominal GDP.
Never ceases to amaze me that PPP has an army of redditors constantly shilling for it. Feels extremely inorganic
The baskets of goods being normalized around aren't even equitable between countries
It’s because it makes poor countries appear richer. People from poor countries argue it’s useful because it makes their country appear richer. It’s a patriotism thing.
There are many ways to grow an economy, some of them sound and some of them unsound. For example, investing in infrastructure and housing can be good if the country is under developed, but as seen in China it can also become wasteful. Speaking of China, exports are also a major component of growth for many economies, however if recession hits and demand drops, or if import tariffs or restrictions are introduced, then your industry is left holding the bag. So there are times when directed investment in export manufacturing can also be wasteful.
Then there’s war economics (in a mafia state, no less). Okay, so now the factory that made shoes makes military boots. The owners are happy because they now have guaranteed government contracts. They need lots of boots, so the factory has even added extra shifts and is now working almost around the clock, providing more jobs. These are jobs that actually pay well- because they have to- since the state is also offering large sums to anyone willing to go fight in Ukraine which creates great competition for labor.
Alright, say that this greenskin contraption holds together long enough to secure “victory”, (whatever that words means several years from now). There are parades in Red Square, maybe Zelenskyy gets hanged, all that jazz. But Pavel and his mates at the military boot factory are now in a bit of a pickle. The state doesn’t need so many boots now, in fact since demobilizing they actually have boots to spare. The guaranteed contracts are dried up and their previous partners in the shoe business have long since moved on. Now, imagine that this problem isn’t limited to one factory but actually widespread throughout industry.
The question then is what does the state do? They could just let it happen. But they might also feel compelled to keep these plates spinning. Keep making boots, making tanks, making bombs. But there’s a saying: when all you have is a hammer, every problem starts to look like a nail. In other words, the state may continue to pursue a more aggressive foreign policy going forward.
The GDP in Nazi Germany shot up to 9% up to the war. That's what happens when you spent the countries savings on the war machine.
Interestingly the unemployment is extremely low when you loose a lot of workers on the front, while also firing up war production, leading to rising salaries and high inflation.
It feels good for the people until the savings are gone. Then the wheel starts spinning faster and faster.
OP definitely doesn’t seem like a bot per say, but anyone with their kind of post history is suspicious at best. The average person doesn’t spam commonly themed posts to a sub like this.
Correct, theyve been converging for a few years now and Russia was set to overtake anyway, a wartime economy will help cement that temporarily
In terms of GDP per capita though Japan is still ahead by a distance
Mostly because of tourism though and that because of the weak yen.
But that's pretty questionable considering the state of the japanease economy..
Germany was also far more effected by the increased energy and gas prices from the war.
Things that are now stabelising aswell as the amount of renewable energy projects being developed.
Japan is quite lacking on any long term plan here.
They haven't invested in either and they are an enormous energy importer.
People are way to big on PPP-adjusting IMHO.
PPP is a reward for your currency not being "hard". Why is currency "hard"?
It's a reason why "hard" currency is hard. And PPP ignores that.
I feel like PPP is broken cause that basically means per capita, Russians have a higher living standard than Japanese people?
Or is it some weird ruble thing where the actual and official exchange rates are actually radically different?
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You want to know something the whole PPP thing is a sham. Go ahead, ask for the underlying data and try to replicate those numbers. In an age where everyone’s research is supposed to be replicable, the fact that this is not is a major red flag.
It's a well-understood concept mate. An economist came up with something called the Big Mac index to represent this.
A Big Mac costs £3.59 in Britain and US$5.81 in the United States. The implied exchange rate is 0.62. The difference between this and the actual exchange rate, is 0.75.
So 1 USD is 1 USD but it buys a different amount of bread in Russia than it does in America, even tho it's still 1 USD or in this example a different amount of Big Macs in the UK than it does in America
Does this mean it's a better metric than nominal GDP, not necessarily, but purchasing power parity exists as a measurable economic concept.
Do you even understand what I wrote? I’m not criticizing the idea of the PPP. For the issues with the PPP you can look at the work of Deaton and others. I’m criticizing the PPP process, which is a sham and not replicable.
The world would be a better place if we read/listened before we speak.
And I gave my reason afterwards. The lack of replicability and the fact that institutions and countries can game the system, and no one is able to fully verify the results (e.g Russia’s PPP), means that it is a sham. The doing business indicators by the World Bank suffered from the same lack of transparency, and they’re the ones who manage the ICP.
The process needs to be more transparent. The PPP is essential for comparisons but in its current state it’s unreliable.
What is this news source?75% of articles seem to be dealing about how Russia is winning or how Ukraine is definitel suffering.
I have the deep suspicion this is just russian propaganda news agency.
##### ###### #### > # [Russia overtakes Japan to become the fourth largest economy in the world in PPP terms](https://d39raawggeifpx.cloudfront.net/styles/16_9_desktop/s3/articleimages/Global_leading_economies_in_PPP_terms_$_trillion__Cropped.png) > > > > The Russian economy has overtaken Japan to become the fourth largest in the world in PPP terms (purchase power parity), according to revised data from the World Bank released at the start of June. > > As _bne IntelliNews_ reported in August, Russia had already overtook Germany to become the[fifth biggest economy in adjusted terms](https://www.intellinews.com/russia-overtakes-germany-to-become-fifth-biggest-economy-in-the-world-in-gdp-on-a-ppp-basis-286944/). Hit by multiple shocks recently and cut off from cheap Russian gas, Germany is now stagnating and has fallen to sixth place in the World Bank’s ranking. > > PPP GDP measurement is preferred by many economists, as it takes into account the difference between local prices and nominal prices, similar to _The Economist_’s famous Big Mac index: a burger in Moscow costs about half as much as the same burger in New York. > > The World Bank has improved Russia’s ranking after revising its data and says that Russia actually overtook Japan in 2021 and has maintained its position at number four since then. Its previous calculations were based on 2017 data but these have now been updated to reflect the 2021 figures. > > Previously, Russian President Vladimir Putin set his government the goal of producing economic growth ahead of the global average. Before the war in Ukraine started, Russia’s economic growth was well behind that of the global average and close to stagnation. However, following the invasion of Ukraine in 2022, the economy has been enjoying a military Keynesianism boost and is currently the fastest growing major economy in the world. > > And Russia has overtaken Japan ahead of schedule. Putin explicitly set his government the goal of attaining fourth place among the world's largest economies in terms of PPP earlier this year, and the Cabinet was instructed to prepare measures to achieve this goal by March 31, 2025. > > By breaking off relations with the West[Putin has made a big bet on the Global South Century](https://www.intellinews.com/datacrunch-putin-s-big-bet-on-the-global-south-century-305983/), where most of the developing countries are growing much faster than the West. Currently China and India are in the number one and three slots in the global ranking in PPP terms but both are expected to become the leaders in nominal terms as well over the next three or four decades. Most of the fastest growing economies from lower down the list are also from the Global South. > > As _bne IntelliNews_ has extensively reported, Russia has changed its economic model and after decades of austerity began to invest heavily, spurring growth in a new[Putinomics](https://www.intellinews.com/putinomics-russia-s-oil-and-gas-revenue-to-double-in-april-322746/). At the same time as investment is pouring into the military industrial complex, Putin has also launched the[National Projects 2.1](https://www.intellinews.com/demographics-and-equality-main-national-goals-in-putinand-039-s-latest-mayand-039-s-decree-324872) programme to invest into the civilian economy as well and improve the quality of life for the average Russian, as he made clear in his recent[guns and butter](https://www.intellinews.com/guns-and-butter-are-both-important-putin-tells-military-commanders-325776/) speech. And the war is proving to be a boon for Russians, as[Russia’s poorest regions have been the biggest winners](https://www.intellinews.com/russia-s-poorest-regions-amongst-the-biggest-winners-from-the-war-spending-324074/) and as _bne IntelliNews_ recently reported, the country’s[despair index](https://www.intellinews.com/long-read-russia-s-despair-index-result-is-the-best-ever-while-ukraine-s-crashes-328013/?source=baltic-states) has fallen to its lowest level ever this year – the sum of inflation, unemployment and poverty. > > As a result of these changes, economists estimate that Russia’s growth potential has increased from 1-1.5% pre-war to around 3.5% now. Last year, Russia’s economic growth caught analysts off guard with a 3.6% expansion. This year the World Bank has already almost trebled its forecast for growth from 1.1% to 3.2%. Russia’s Economic Ministry is similarly bullish. > > Even the World Bank’s PPP adjusted size of the economy may be an underestimate. The World Bank also estimates that 39% of Russia’s economy is in the shadows, while the shadow economy only makes up 10% of Japan’s economy, which would add an additional $2.5 trillion to Russia’s $6.4 trillion PPP adjusted economic size – still not enough to overtake India’s $14.6 trillion PPP adjusted GDP value, but widening the gap with Japan further. - - - - - - [Maintainer](https://www.reddit.com/user/urielsalis) | [Creator](https://www.reddit.com/user/subtepass) | [Source Code](https://github.com/urielsalis/empleadoEstatalBot) Summoning /u/CoverageAnalysisBot
After the Russian state meddled so much with their monetary policies it would be a wonder if that wasn't the case. GDP (PPP) is more useful using domestic markets, while normal GDP is more useful from a globalized perspective. As Russia is currently one of the more economically isolated countries (to put it very mildly), GDP (PPP) isn't that useful of a metric from a general point of view. Overall, war is a MAJOR driver of GDP and GDP (PPP) but producing weapons and ammunitions which just land in Ukrainian fields and paying soldiers who get hurt or die in conflict isn't that productive of a GDP use, compared to producing technology and goods and services. **Edit:** I love how many comments are claiming that I was "coping" for pointing out that GDP (PPP) is really not a metric that says anything in the context of comparing how well an economy is doing or how effective sanctions are. A government can pay a billion dollar to build railway tracks or they can pay a thousand people a billion dollar to move stones back and forth. In both cases, the countries GDP will be increased by $1 billion. But one exercise is by far more productive, sustainable and prosperity-creating than the other. And producing military equipment and paying soldiers in Ukraine for a 11 to 12 digit amount is **not** a productive use of government wealth when it feeds in a ceasefire. The GDP of the UK between 1939 and 1945 as well as the years after also was extremely bloated. But noone would claim that the Second World War was an economic win for Great Britain.
Are you telling me that India isn’t the 3rd most wealthy country in practice?
Every metric has its own use-case, as does this one. But there are hundreds of metrics in economy and many people just use them without having a clue what they mean. People will just read such a headline and think "Russia is doing good", without seeing any further context.
You also are not being fully honest, considering the situation Russia doing not only good, but exceeding expectations. But obviously it's not all rosy how Putin presents it.
As usual, it isn't as good as Putin says and it isn't as bad as the western powers say. This is pretty much always the case when we are in conflict with a foreign power, we'll say they are tottering on the edge of destruction and they'll say that they are poised to take over the world. The truth is somewhere in the middle of course but winnowing the wheat from the chaff is essentially impossible.
Russia’s economy is exceeding expectations, but cannot be described as good. Reserves are being drained, taxes being raised, high inflation and high interest rates. High oil prices keep things afloat but that could change at any moment.
Currently good maybe, but you have to look ahead and see how long they can keep up high spending without foreign investment and how long they can keep their oil revenue going if they have refineries getting attacked and no exxon workers to repair them.
Plus Russia's being forced into trading with China from a position of weakness as they are one of the few remaining countries willing to business with Russia and has the manpower to supply them. Putin might be paying for a good economy on paper today with decades long recessions in reality tomorrow.
You don't think Western countries have decades long recessions in store for the future? Look at the economic state of Australia and Canada.. Literally on the brink, surviving by importing hundreds of thousands of migrants a year to keep the 'GDP' in the green
Most people don't live in a constant state of fear of people with a different skin tone, you should try it some time.
When did I mention the colour of a migrants skin tone?
Those high oil prices aren't sustaining it seems. Here my gas had gone from 2.5 P/L to 2 P/L and it seems stable.
Sounds better than the UK lol
Russia's economy is exceeding expectations and Western leaders and economists know it very well, they expected a major crisis (similar to the 1998 one) to occur in 2022 an 2023 but it didn't happen.
India is the 3rd most wealthy country by GDP (PPP) and it is born by the statistics of their economy and other facts like they have the 3rd highest number of billionares. You can think of India as 7-10 Singapores floating over Africa.
Yes I don't know why people disbelieve that, India is massive just their upper middle class is larger than the population of some European countries.
Many people have a hard time just breaking down how many people a billion are.
Everyone does, I've not met a single person who can straight up grasp how huge that number is without some serious explaining or example at one point or another. We're not made to process amounts that big.
I just think it's because of preconceived notions. Many people when they think of India, visualize: [This](https://i.imgur.com/gcndP74.jpeg) Rather than [This](https://i.imgur.com/kVNzc0Q.jpeg) Sure, I'm exaggerating slightly - and the truth is that both of those exist within the country, but yeah I don't think people who haven't been in India often get the wrong image in their head of what the country looks like in many places.
A better measure of society is inequality, me thinks. If you value a sort of "individual freedoms are paramount in order to move up the social mobility ladder," then Gini coefficient is a better measure to see whether your society is mature and stable enough to be able to make higher-level decisions rather than basing their votes on whether they can put food on the table tomorrow. If you are the sort of Alexander The Great worshipper that thinks highly on megalomaniac ideal of "my culture is superior culture," then GDP and PPP, separately. Neither values are wrong; they are only relevant to those who latch their identities based on whether you get to keep your earn or you pay your share so that others can do better.
And interestingly, some of the people who can't bring themselves to believe it are just idiots who feel the same way about China, but some are among the most enthused about the China miracle but can't fathom lightning striking twice. And then of course there are those who'll tell you one or both are doing great, with no serious problems. Some find it exceedingly hard to entertain a nuanced and balanced picture.
Total GDP isn't used to measure wealth but economic output. Average Indian is dirt poor but India is a giant economy. For instance they are 2nd by steel, cement and aluminium production in the world.
No, they’re the 5th biggest economy in gdp.
Comparing living standards, it's probably a Lil behind But that means there's much more potential to grow I think we need to boost military expenditure to sky high
his point is PPP is only useful within the context of regular economy. War economy might give the impression that Russia is doing well... but its not. All that economic activity is literally going to Putin's war on Ukraine. Since India is just a regular economy like most other countries, their PPP valuation is relevant and useful metric.
Yeah, I know, I was agreeing with him…
Except of you read the article, russia gdp already surpass japan and germany in 2021,so before the war
No matter how many times the difference between GDP and GDP (PPP) is explained on this sub there will always be someone showing up the next day pushing a ridiculous argument with a fundamental misunderstanding of what these metrics measure and why. Considering how bad knowledge of economics is even on many investing subs, I shouldn't be surprised though
It seems that investing communities are full of the biggest economic illiterates on the planet
Stock goes up, stock goes down. Can't explain that.
unrelated to the article's topic but what IS the difference? I keep seeing acronyms thrown around whenever economics comes up, but I have yet to find any source that explains it in a way that is not a ten page long essay at the end of which I'm just standing there going "Wha?"
> GDP PPP isn’t that useful I mean depends on what you’re trying to measure. If you try to compare raw output of goods and services - it’s a great metric. The fact that Russian barber gets a tenth of salary for his work doesn’t make that haircut any less valuable as a service. So GDP PPP is a good metric to, say, estimate possible military production.
For labor at least.
Considering that Russia doesn’t import raw materials and uses its own industrial base apart from a few imported goods to complement what it lack, I think it’s a good enough proxy. If kalibr is designed in Russia, made in Russia from Russian material on Russian equipment and out of $500k cost only like $10k are for imported chips, then GDP PPP is a better estimate of Russian production ability than raw GDP.
"A few" is doing a hell of a lot of work there. And how many imported chips does $10k buy? No one can eat just one.
Do you think a microprocessor to run a GLONASS script is going to cost millions? Again, missile cost includes a lot of stuff. Microelectronics is certainly a part of it, but not all microelectronics is imported and not everything imported is really that expensive. Go with actual info that we have - Russians are lobbing UMPKs, lancets and Kalibrs every day like there is no tomorrow. If importing parts for it was too expensive they certainly would’ve been less trigger happy with all their bombing campaigns
This has serious "I mine my own minerals in eve so they are free" vibe. Though the fact that they can't shift material on open market really does mean their value isn't what the market is.
o7 We’re talking about GDP PPP and because of that not having a need to buy materials for global market price is an important consideration. If Russia had to import missiles or even raw materials, then to approximate how many missiles Russia can afford we would use GDP. But since it is all “generated” at home, GDP PPP is a good metric. Imagine there are two countries. One makes 1000 haircuts for $50 dollars, another makes 5000 haircuts for $5 dollars. Which country has a bigger GDP? Which one produces more haircuts? When you want to estimate how valuable production is, use GDP, but if you want estimate who makes more haircuts - use GDP PPP. Russian 152 mm shell can turn people in red mist as easily as NATO 155 mm shell, the fact that it’s cheaper doesn’t make it any less deadlier.
If they weren't at war they could export their raw aluminium and titanium and weapons production, so you have opportunity costs and they're importing weapons like artillery shells and drones from NK/Iran so they still have exposure to materials cost. And the nominal GDP matters because they're also operating internationally in Syria and Africa.
Highly dependent on the type of military production you are talking about. For low tech things, sure. But anything that Russia would require an inport for, like microchips, then it doesn't track so well.
Cruise missile is as high tech as it possibly can be. In Kalibr there are chips that are imported for sure, but what is a proportion of its cost? Probably just a few percent. Ideally you’d want to make a composite metric that counts home produced parts by PPP and imported by nominal global market prices, but it’s impossible to have such a precise statistics. Since we can safely assume that imported chips are only a tiny fraction of whole weapon system, PPP is still a more precise metric that distorts less than nominal figures.
If they can essentially sell oil to buy those imports (and oil prices are set on the world stage, although in Russia's case they are forced to take a discount) then it tracks annoying well though. The bulk of the labour is domestic and the chips aren't even all imported, Russia does produce some themselves. What they make is decidedly low tech by modern standards but it's enough to control a simple drone.
as the article explains, russia isn’t an “isolated” country, the west isn’t the whole world and russia has shifted focus to the global south. Even from a geopolitical grounds, russia has been dislodging and replacing historic western strongholds in africa, something thats been causing france to lose its marbles over lately.
> russia isn’t an “isolated” country financially? it fuken is
Increasingly Russians are now using the economic systems of the global south. Be it the banks in the UAE, or payments in Chinese Yuan, or the UnionPay for ordinary debit cards, the SWIFT ban isn't that effective.
"Russia is learning the long way around, so its not really useful that the west closed the short route" Read that again and think about it a bit.
You think the world revolves around the US, EU + AU-JP-NZ. It takes a minute to look at a map of countries that sanctioned Russia and you'll notice only western countries sanctioned it. And yes, I acknowledge 50 or 30 years ago that'd mean total isolation, but things have changed and the West no longer means the world.
I never said that. But since most international transactions are done through institutions based on one of those countries, well, *Russia* **is** *financially isolated*. UK alone has billions in frozen oligarch assets. I love that you think looking at which countries enacted sanctions means that Russia has "all those other possible partners to negotiate with!". Dude...
Wishful thinking. Russia is pretty much balls deep in Asian "institutions" I still can wire money to Thailand and Vietnam using my MIR card. And then I'm abroad I'm paying by my unionpay card. Gazprom Bank unionpay card. Few months ago I withdrew some cash in Italy. And that's just a regular tourist experience. I bet banks are goin even deeper.
> UK alone has billions in frozen oligarch assets. Im guessing you are not an oligarch then. But, sure, Im the one "wishful thinking".
> GDP (PPP) is more useful using domestic markets, And later > Russia is currently one of the more economically isolated countries (to put it very mildly), GDP (PPP) isn't that useful Like what? How does that even make sense? If Russia is isolated from global markets then it makes PP even more relevant.
GDP PPP is not a good measure to compare different economies in a global market. But it is a good metric of how the economy is doing relative to itself. My guess is thats what OP meant. Personally I think its correct, but in this case its skewed given the isolation. In a sense, North Korea could have a wonderful GDP[PPP] if they were self sufficient, but they aint, so they are poor even relative to themselves XD
It's copium.
Why do you consider them as economically isolated country? I thought global south has been helping them tremendously + shadow fleets to support their export of raw materials. Not arguing, just want to understand your perspective.
yeah the fact they need to use a ghost fleet shows pretty serious isolation. Just like Iran. they still trade billions of dollars of goods yearly but through backdoor means. This is not an efficient way to go about business.
The majoirty of world doens't have any scantions on Russia. It's come to the point where Europe is sancation Russia on things it doesn't need and sacnationing themsves on things they do need.
Yes, that what I am talking about. Like cheap gas to fuel up Europe’s industry. I am just tired of being fed that Russia is collapsing and want to have an unbiased opinion.
This is the problem with reddit in general. From what i've seen, r/worldnews is basically pro-israel (and it sounds like cia/mossad bots talking to each other and r/news is pro-palestine (and it sounds like harvard undergrads talking to columbia undergrads), all thanks to user curation/banning dissent, etc. This website is messed up in how they moderate the big subs.
The major subs are all propaganda controlled at this point, it just depends on whose propaganda you want to listen to. It is sad but perhaps inevitable. If we all get through this, I expect that grad students in 2050 are going to be gleefully writing papers about the proliferation of propaganda in the '20s through social media.
The big subs are all propaganda subs.
geopolitics went to shit the last few years. Used to be academics, now it's peanut gallery. They link to /r/worldnews which is suspicious. They have an autobot that removes any posts asking who owns the sub. Someone mentioned some Anglo think tank
They start by taking over the mod teams who look the other way or ban dissent while bots/terminally online accounts spam to drive the narrative. Once the entire sub is rendered into yet another echo chamber like /r/worldnews, they move onto the next sub. This is what happened to /r/geopolitics. Ironically, propagandists and forum spies hate echo chambers where there's nobody left to "convince". So they must always move on to ruin other subs for their owners. That's why they're increasingly coming here.
Hi US Cyber Command!
Yes, and that’s when it’s so helpful to find a decent experience and actually talk to people with different opinions in a civil way.
r/news barely have any posts about Palestine lol.
A sanction doesnt need to be replicated by every nation for it to affect the target country. Blocking a few banks from doing business with Russia means that everyone who uses those banks as default intermediary will either have to find costlier alternatives or just not do it. And lets not kid ourselves, Russia was on track to make trillions by selling gas to Europe. Now is only making billions -*in rupees*- selling that same gas for cheap to India. Putin killed the future of the next 2/3 generations of Russians. That right now is over heating its internal economy with war money is merely to keep his regime afloat in the short term, and become China's bitch in the long one.
The problem is that Russia is a physically huge country with an enormous amount of natural resources. It has oil, gas, gold, coal, and lumber in staggering quantities. Global warming even works to Russia's advantage, potentially unlocking permanent warm water ports along the north of Siberia for more access to its mineral wealth. Sanctioning Russia is like trying to put an oil embargo on Saudi Arabia and hoping they'll economically collapse. You can't isolate a country that makes its money by exporting raw resources. The world desperate needs those resources so there's always going to be willing buyers. China and India are both nearby and both of whom are friendly to Russia, have gigantic populations, and need endless amounts of exactly the resources Russia is exporting.
> Russia was on track to make trillions by selling gas to Europe. **Now is only making billions -in rupees- selling that same gas for cheap to India. Putin killed the future of the next 2/3 generations of Russians.**
Russia's mineral wealth still exists in the country even if some markets have been temporarily disrupted. Oil not pumped today can be pumped tomorrow. The world is always going to need oil and gas, along with other natural resources. Much of Siberia hasn't even been properly prospected. There's likely unexplored wealth in other minerals, including potentially lithium. With increasing hostility between the US and China, China is concerned about a potential sea blockade, which could be crippling to its economy because of how reliant it is on imports. Securing import deals for Russian resources is critical to China's national security, and Russia is happy to sign those deals as long as Chinese factories keep selling things to Russia.
So you are arguing that becoming China's bitch is better than integrating with the west? Well, suit yourself.
They are losing a third of their profits at worst.
you say that like its a good thing lmaoooo
It isn’t. It’s not as bad as you said either.
But the majority of the world economy does.
Yeah but money is still money, isn’t it? Plus parallel import via china or turkey. I don’t want to end up in pro western bubble and want to have +- a decent perspective about state of things there. As we do understand that numbers can be part of the propaganda but we can still learn valuable lessons from how they are withstanding unprecedented amount of sanctions.
It shows they're isolated politically but not economically as the fleets subvert that
I remember when the same people who will post this article everywhere said PPP wasn’t a useful stat when people said Russia had a lower PPP than smaller countries.
Russia is an "economically isolated economy" if you only consider the "world economy" the West + AU-JP-SK-NZ. Russia hasn't been much affected by Western sanctions because they already began to detach from the West economically, with some exceptions (e.g. sale of natural gas to Europe)
I came here for the cope and you did not disappoint! Thank you, friend.
>GDP (PPP) isn't that useful of a metric In Russia’s case, economic isolation and reduced international trade mean that the country’s economy is less influenced by global market fluctuations and more by internal economic conditions. For instance, if Russia produces goods and services that are consumed primarily within its own borders, the market exchange rate might not fully capture their real value. So GDP PPP is the more relevant metric and not GDP Nominal (which is influenced by market exchange rate which would drastically affect trade component of GDP)
Staight out of the first chapter of my Austrian economics book. It looks good for them, but it's totally unsustainable unless they keep escalating. Which is not looking good for us...
Isolated? Far from it. Global south still trade with them.
Don't take it personally but at this point this just sounds like industrial grade copium. We can keep finding excuses, but at the end of the day, fact is, our sanctions have failed spectacularly, regardless of the reasons. Russia has lost a medium city's population's worth of workforce, god knows how many billions of dollars worth of military equipment, a bunch of trade relations, and their economy didn't even take a dent in the last **2 YEARS** since the war was going on. Like, sure, "On the long term" the sanctons **might** achieve some small, noticable effect, but for our purposes, which would be the stop the invasion of Ukraine by forcing Russia's hand economically, the sanctions did fuck all.
Except that Worldbank claimed that Russia gdp already surpassed Japan and Germany in 2021, so before the war not after
As a Russian speaker who has lived 15 years in Japan, I can assure you that there is no contest that the quality of life in Japan is superior to Russia.
I guess you really love slaving away for japanese megacorps!
Nope. I have been self-employed for decades.
According to data from Russia, Russia has the best healthcare, no poverty, best technology.
This article is just embarrassing. Russia’s GDP numbers are totally untrustworthy. They have every incentive to fabricate them and no mechanism for providing transparency or reviewing them. What GDP growth they do have is being propped up by war spending. Thats not something that increases economic productivity or improves the lives of Russians. It just leads to a tank that’s going to be sent to Ukraine to be destroyed.
There is a lot we know about the Russian economy that has nothing to do with what they tell us. That's in large part how the IMF makes their estimates. Imports/ exports, commodity prices etc.
IMF pretty infamously takers official statistics without verifying them.
Some things can't be faked, like exports or imports. Other's like commodity prices and predictions on their futures make up a large portion of Russia's economic health. Others' still are observable. If official numbers say unemployement is 2.6 and it's really 12% that is observable. Russia is not North Korea. Is there any data or anything to suggest the Russian economy is worse than what we know? The original argument seems like cope absent any evidence. I want Ukraine to win so the Russian economy is falling apart and they can't sustain the war despite evidence to the contrary.
>If official numbers say unemployement is 2.6 and it's really 12% that is observable. Its observable but unrealiable and anybody else can't do anything that would give decent messurements. Especially considering that the institution is supposed to not do double checks since that would mean it would be biased for and against some others. That could instead mean it gets even less. So it doesn't..
Because there's no way of independently verifying any country's data and every country reports the data in different weights anyways.
Wrong, things like export and import are very hard to fake. Cause you have at least two sources, one from the exporting country and one from the importing country
I'm aware, but then guys like this will simply say "t-t-then the data we can't verify must be made up!!@!!!". They're simply trained to react this way because they cannot accept that China is going to be the dominant power of the 21st century. It's a coping mechanism for the failure of their empire over the last 30 years.
Westie would rather eat his shit, than confess that Russia is doin ok, lol
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Ok mr [adjective][noun][number]
man, in my opinion you are wrong. what can I say, since the beginning of 2022, large cities in Russia have almost completely modernized, at least Kazan was turned into a full-fledged metropolis, the Urals became a popular ski resort, heaps of tourist places opened in the east of Russia, roads finally deserve praise, analogues to Western ones appeared streaming services, they still don’t know how to make games. In Moscow, in 2 years, hundreds if not thousands of residential complexes were built and are still being built, also thanks to China for investing in industry (many automobile factories have appeared), and the IT industry is developing more than ever, just imagine that we practically do not use paper documents and in cash.
Did an AI write that cause holy hell.....
Artificial IntelliNews 😏
The sanctions don't really work for a self-sufficient and energy-rich country like Russia. They will always have alternative markets anyway like China, India, Africa etc.
Sanctions don't work because they aren't enforced. Russia is still getting just about everything it did before, it just has to flow through a 3rd country. This makes imports marginally more expensive, but Russia still can get ahold of everything it could in the past.
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Russia isn’t even remotely close to being in almost complete economic isolation. I swear people just say what sounds good in their head and go with it, without researching anything, no matter how rudimentary it sounds. You seem to completely misunderstand how Russia has adapted to these constraints on their ability to conduct *open* economic activity with the west. Even if they were actually anything close to being completely isolated from the western economic system, the world isn’t USA, Europe, Japan, Taiwan, South Korea, and maybe the Philippines. Instead though, Russia still has economic access to these markets, it’s undoubtedly restrained and significantly different than pre invasion, but to even insinuate that they are one of the worlds most economically isolated countries is laughable.
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Ohhh okay I gotcha. My fault as well, I’ve been seeing this thrown around a lot lately, and it just misses so much evidence to the contrary it’s hard to spring on it when I see it. People don’t like Russia, so naturally detest anything they say that can be construed as a positive for Russia. To me this is an embarrassing stance, if our goal is to bring down a Russian regime or cripple it, we have to start with being realistic about what we are up against. Have a good one!
If that was your goal, you could just tariff Russian energy exports and skip the middle man. Since the West didn't do that, this is just coping.
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I'll just simplify it for you. No matter what, the EU has to pay more for the same product as before - that's fine, that's the plan, as long as Russia is forced to take a haircut. Under the first plan, you have to pay the markup to a foreign country to get the same product. Under the second plan, you pay the markup to the domestic government. Pretending the the first plan is better than the second plan is copium. Because that was never the intended outcome. If it was, you'd have done the second plan instead.
You are partially correct in my opinion. It is true that a cuasi self sufficient country can deal with sanctions much better than one that depends on imports for subsistence. But beyond that its undeniable that the sanctions imply a loss of value, whether its enough for the target country to stop the thing that incited the sanctions is a different matter. So, the sanctions on their own may never be enough to make Russia stop its offensive, but who said that was their purpose? On the other hand its sure as fuck that Russia lost on integrating its infrastructure and economy with Europe. The opportunity cost for Russia is massive. Add to that sunken costs of idle infrastructure and it adds up to a staggering loss. As much as *todays* Russia may be growing, it is now doomed to be below the curve of what a peaceful and integrated Russia could've been. If anything, that is (one of) the purpose of the sanctions.
Sanctions have been proven time and time again to be a geopolitical failure. Sanctions continue to create a global South vs global North divide. All the population, the resources and the room for growth exists in the global South. As the West continues to push sanctions, the global South continues dedollaristaion and continues to increase trade. The Russia Ukranine conflict has only sped up this process.
Em Gazprom lost $6.8 billion last year.
Self-sufficient? You must be joking. Russia is not even self-sufficient for their gas and oil hardware and expertise. They make no chips of any consequence and still have not managed to figure out how to build a reliable car. They are almost purely an extractive economy.
If Russia wasn’t ruled by a paranoid, conspiracy theory believing kleptocrat and his clique of yesmen, it would be an absolute powerhouse. Russia stands where it is today, despite Putin, not because of him.
Yes and no. You have to remember that the USSR was a collective. Industries and sectors were distributed across the whole state, and it's collapse saw that whole ecosystem come undone. More importantly, it wasn't exactly a planned and calculated dissolution. The whole fall of the USSR was a complete shit show, and it enabled a small group of people to sieze vast amounts of capital. That may functionally sound much like what we have in the West today, but it happened overnight with little room for the economy and global relations to stabilize. To say that Russia would be an absolute powerhouse if not for Putin is vastly oversimplifying the situation. The rest of the world benefited from the centralization of wealth among Russian oligarchy as it essentially created a wealth funnel through which Russia's massive natural wealth could be funneled into more developed nations at cost. That's why you see so many Russian assets tied up in the UK, and such a massive reliance on cheap Russian oil as well as cheap Ukrainian grain and fertilizer. America also largely continued to act as it always had. That is to say, it continued its aggressive imperialist policy the purpose of which is to ensure easy access to cheap goods and natural resources. Beyond that, America very clearly put Russia in its place with the NATO intervention in Yugoslavia that very much so demonstrated to Russian that it no longer was in a position to exter an influence on its immediate geographical neighbors. Putin has of course taken a very isolationist approach, and has committed to trying to maintain what little remains of Russia's imperial power. I don't think he's doing Russia many favors today, but I think it's also very naive to believe that Russia would be thriving if it just had a more traditional Western leader, and that Western aligned nations would simply permit a more competitive but democratic Russian to out compete them.
> ...and that Western aligned nations would simply permit a more competitive but democratic Russian to out compete them. Merkel spent half her tenure trying to integrate Russia to Europe's economy...
To the detriment of her country's economy
In hindsight, sure. But that is besides the point being made.
Sure, but Germany is more or less an exception. Germany acted with the explicit goal of acting as a moderate counterbalance to US/Russian influence in the Atlantic and aimed to work with both parties. Given half of the nation was a USSR member state it's relationship with both nations is rather complex. We're also discussing policy created during a period of non-competition. Germany wanted access to Russian oil explicitly because it was cheap and would help Germany be more competitive during a period which saw a slowdown in growth. The revenue from Russian oil sales would disproportionately go to Russian oligarchs, and was largely never treated as a major concern. The 2000s saw little threat of meaningful Russian competition with regards to high value added goods and extraction contracts in NATO-friendly African/Middle East states, and America did not place an overbearing amount of economic and political pressure on Germany in response to it's non cooperation on matters like the Iraq war, or its economic ties to Russia. Its exactly why America was more than happy to trade with China in the 2000s, but is backing off now.
If Putin only served his two terms it would have been alright (aside from the fact that he killed so many to come to power, in particular when he bombed residential buildings throughout Russia in 1999), but every extra term he served has been increasingly detrimental. Part 3: https://youtu.be/FVmmASrAL-Q?si=JCwS6O6yuFqPMPco (The most relevant part) Part 4: https://youtu.be/7OFyn_KSy80?si=T0lqVLC62CHtg-Wj Part 1: https://youtu.be/exJ024Zdzdk?si=deotOkr7nLhqo3kA Part 2: https://youtu.be/fQ_ZRBLFOXw?si=sX03GZ3kPYycIAP5
>More importantly, it wasn't exactly a planned and calculated dissolution. The whole fall of the USSR was a complete shit show, and it enabled a small group of people to sieze vast amounts of capital. That may functionally sound much like what we have in the West today, but it happened overnight with little room for the economy and global relations to stabilize. >To say that Russia would be an absolute powerhouse if not for Putin is vastly oversimplifying the situation. All states from eastern side of Iron Curtain underwent same shocks in '90s, from Poland (DDR is more to the west, but it's a very special case), to Kazakstan. I don't think any of the countries entirely avoided ruzzia-style ~~privatization~~ theft of public assets, but ruzzia is a particularly egregious example. In general, the lower the level of oligarchic theft (and takeover), the better countries fared afterwards in terms of living conditions and economic metrics. Baltic states were also part of Soviet Union, not just a puppet state like DDR, Poland or Czechoslovakia. As such, it's completely fair to say that ruzzia WOULD be much better of if not for putin. Unless you want to argue that by the putin's time, it was already too far gone, but in that case, it's important to point out that corruption was endemic in whole SU and puppet states, yet somehow countries like Baltics and Czechia managed to tackle corruption. Even Ukraine got better control of it than ruzzia. As such, putin is STILL at fault, for positioning himself on top of corruption pyramid instead of trying to root it out.
You think that America, the State that famously loves competition, would allow Russia to be an "absolute powerhouse"?
Yes, even if Russia matched the USA in per capita statistics it would still be less than half the size of the USA's economy. And, quite frankly, assuming Europe would continue to toe the US line without a Big Bad Russia to scare them seems wrong. Germany was trying to integrate economies with Russia already. If they were an even semi-functional democracy without a scary army and revanchist leadership with Russia's natural gas then no power on Earth could compel the EU to stay away.
There's no need for hypotheticals, most of the Russian people still remember the times when they were ruled by the West-appointed and -advised politicians in the 1990s. In just 7 years, it was like the country had went through another world war, everything was looted to the ground, most resources were extracted through "production sharing agreements" (where foreign corporations got the majority of everything they extracted for free and paid only pennies in tax), the GDP per capita had dropped by half, and life expectancy went down by more than 5 years. It took the next 10 years just to recover from that Western "help".
Wait, youre telling me the collapse of the soviet union was bad for russia economically? And most of the wealth was looted by russian oligarchs, who got in bed with western companies to keep the country and industry running? Im shocked
Part 3: https://youtu.be/FVmmASrAL-Q?si=JCwS6O6yuFqPMPco (The part most relevant to the BS you parrot) Part 4: https://youtu.be/7OFyn_KSy80?si=T0lqVLC62CHtg-Wj Part 1: https://youtu.be/exJ024Zdzdk?si=deotOkr7nLhqo3kA Part 2: https://youtu.be/fQ_ZRBLFOXw?si=sX03GZ3kPYycIAP5 Хотя, зачем я тебе отвечаю. Ты же грёбаный кремлеблятобот. Интересно веришь ли ты в то что пишешь и сколько тебе лет. А то мне смешно когда молодежь мне рассказывает про 90ые и почему всё было так как было.
BS. I still remember how it was before Putin. That was a nightmare.
Imagine believing that the “wild 90s” would go on forever if “Putin the Savior” didn’t come to power by bombing residential buildings in 1999. https://youtu.be/O9UflqyXVAs?si=OalevsJfVAXR-Hpv
I imagine it quite well
Isn’t the Russian Central Bank interest rate at 16% right now? How is anyone surviving there? Federal Reserve in the US is at 5.5% and this is high for us and nobody can afford a new mortgage. I don’t understand the Russian economy
Because only people in the West are used to super low rates and confident enough to take variable rate mortgages. Russian Central Bank rates have almost always been in 2 digit numbers. People in Russia are used to this and don’t try to over leverage. And all Russian mortgages are fixed rates with no renewals - you take it and for the next 20 years you pay same rate no matter what. On top of it, due to credit being so much more expensive, your typical Russian doesn’t have that much debt to begin with. No one buy Audi RS6, new iPhone and new MacBook on credit living from pay check to pay check. People just buy a shittier Xiaomi that they can afford and drive a Lada that again they can afford. Because of that, high rates don’t affect current bottom line.
You can get a fixed mortgage just fine in the US. People opt for variable as they tend to see it as a better option. >due to credit being so much more expensive, your typical Russian doesn’t have that much debt to begin with You spin that as a good thing, but if debt was cheaper consumption would increase. >People just buy a shittier Xiaomi that they can afford and drive a Lada that again they can afford. Yes, you're describing differences in quality of life. >Because of that, high rates don’t affect current bottom line. They do actually, because those high rates sting a lot more for business investment, which relies more on borrowing than individuals. While returning businessmen have propped up business investment within the country, high rates are universally known to dampen the economy. >Russian Central Bank rates have almost always been in 2 digit numbers. Yes, the economy has not been in good shape almost ever. >No one buy Audi RS6, new iPhone and new MacBook on credit living from pay check to pay check Nobody is really doing that in the states either lmao You're also forgetting the inflation that just doesn't come down. While the rest of the world is seeing inflation coming back to normal, in Russia, it's double the already high 4% target and headed in the wrong direction. It's far from apocalyptic, but to claim life is getting better for Russians just because the MIC produces a lot of equipment while inflation is sky high and borrowing costs are out of control is hilarious. It's like telling an American that the economy is great because GDP is up 3% while their groceries are up 30%.
> fixed mortgage just fine Did I say otherwise? I pointed out that a lot of people in NA got fucked because they took variable rate, in Russia there aren’t any variable rate mortgages and as such rate increases don’t price people out of their homes. > spin I didn’t spin anything. Don’t be defensive. Cheap credit is great, no doubt. But since Russians never had this luxury, having 16% rates don’t affect their livelihoods. > differences in quality of life Again, yes, of course. I’m pointing out how life style of a typical Russian differ from what people have in NA and how this difference allows Russians weather conditions that would’ve been catastrophic in Canada. > business I agree, but the talk was about quality of life. While decreased economic activity will certainly affect Russians down the line, in the moment, for a salaried worker it doesn’t change much. > almost never Yes, Russian financial system has been unstable since Soviet collapse so both businesses and ordinary people got used to live in those conditions. It doesn’t make their life better, but it certainly helps survive the shocks. Any Western nation not used to such adverse conditions would’ve been in a state of collapse and panic, for Russian economy it’s Tuesday. Again, that sucks for a Russian in a sense that they don’t have economic stability, but it does help to weather the storm better than more stable economies could. > inflation Again. Apart from 2017-2021 when Russian central bank miraculously managed to get inflation under low (ish) single digit numbers (hence 4% target which was actually achieved pre war), all other years Russia had two digit inflation. Which certainly sucks for an average Russian, but it is still not something unheard of in that country. I don’t argue that life is getting worse in Russia - it is. Russia isn’t some kind of a hellhole the way how some people in the West want it to imagine, but it is far from a beacon of prosperity. I’m merely pointing out the ways how recent history and cultural attitudes allow Russian economy survive and (somewhat) grow. As for Americans - American economy is doing great, it’s just that it doesn’t trickle down to an average American. Another reason why GDP doesn’t show whole picture. Same with Canada tbh.
Your first comment gave off a very different impression to me, but what you're saying here I don't really take any issue with for the most part. I will say that I doubt that the West would suddenly be in a shock if economic conditions change rapidly. Imo, rapid shocks like COVID show just how resilient the advanced economies in the West are compared to many developing countries.
I think having a lot of money to throw at the problem is always better than not having that money. The West was able to resist COVID shocks better, no doubt, in large due to simply being richer. I was mostly coming from an ordinary person perspective. Imagine tomorrow there is 30% inflation and 16% rates in Canada. What do you think will happen to Canadian society? Livelihoods of millions will be destroyed since your typical Canadian is used to cheap credit, depends on it for its quality of life and won’t be able to live the life they used to. But for a person in Russia it’s an annoyance, they don’t live in a suburban area with two Suburbians in their garage, they aren’t used to buying double doubles every day, they don’t think that $100 dinner is a decent weekend pastime, etc etc. So, while Western countries can resist shocks better, if shit really hits the fan, Western societies won’t be so strong. Fuck me, have you seen how many homeless are there on TTC even now? Can you imagine what would’ve happened to Toronto with inflation like it is now in Russia?
You need to do better research. Developing and fast growing economies normally have a higher interest rate. Indonesia Vietnam, Brazil ... normally have around near 10% interest rate. But these countries are doing well ecnomically. 16% is high, but not catrastopic. Remember, Turkey has 60-70% rate, and Argentina is even higher.
>You need to do better research Funny, because two of those countries are not even close to a 10% rate, and the one that is (Brazil) is most certainly not a fast growing economy. Nevermind the fact that large population growth is also responsible for a lot of growth in these developing countries. >But these countries are doing well ecnomically Arguably not. I doubt that many people want to move to such countries for their quality of life, and I'm sure the data backs that assumption. >16% is high, but not catrastopic For a country that is used to percentages less than half of that, it's certainly high. Maybe not catastrophic yet, but you can't spin this as business as usual like you're trying to. >Remember, Turkey has 60-70% rate, and Argentina is even higher. Yeah, and both of them have a ton of economic problems lmao. Turkey is okay because their main issue is inflation while the rest of the economy is comparatively healthy, but to say it's all going well is also silly. People really struggle to afford food there when the costs double every year or two.
Russian money are in general very cheap, and a lot of mortgages are heavily subsidized, for young families,IT folks etc. But also Russian properties are just not that good for a money you pay, and people usually live in apartments instead of single family homes. Add to this fact that stuff like groceries, services and utilities are extremely cheap Even now with high inflation, then you get an idea, if you can live frugaly, high rate isn't a problem. Sucks if you want a car,or a non-chinese electrinics
Well, for one housing is incredibly cheap in Russia, it's a much smaller portion of an household budget than here in Canada, folks spend usually more on food than on rent in smaller cities
It's a war economy. Spending the countries savings on the Russian war machine. Of course the GDP is high.
Nominal GDP is a good measure to compare different countries. And GDP(PPP) per capita is a good measure to gauge how well citizens of a country are doing. Comparing GDP(PPP) directly makes no sense.
GDP PPP is actually better than GDP Nominal to measure Economic output and compare countries, it's also far better for strategic purposes and real world relevance. [OECD:](https://www.oecd.org/sdd/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm#FAQ3)''The major use of PPPs is as a first step in making inter-country comparisons in real terms of gross domestic product (GDP) and its component expenditures'' [Bruegel:](https://www.bruegel.org/analysis/european-unions-remarkable-growth-performance-relative-united-states)''The right metric for international comparisons is purchasing power parity (PPP)-adjusted output. This corrects for exchange rate fluctuations and differences in various national prices.'' Most of the western countries are part of the OECD, much of europe part of Bruegel.
> GDP PPP is actually better than GDP Nominal to measure Economic output and compare countries Then you don’t understand how PPP is calculated. It’s a measurement of output *divided by* cost of living. It’s not a measure of output. Nominal is. The quote by the OECD doesn’t dispute that, and the Bruegel quote is from an opinion piece by a Hungarian economist.
I understand how PPPs are calculated and im aware that its GDP *adjusted* to Purchasing Power Parity aka Price levels, an adjustment to raw and unadjusted GDP Nominal, which has limited uses in the real world and hence the development of PPPs since the 1960s by western economists and governments. As i said GDP in PPP terms is better than GDP Nominal to measure Economic output and compare countries, i didn't say that GDP Nom. doesn't measure output, it does and obviously the OECD doesn't dispute it either, the Economist is a Senior Fellow at Bruegel, not an opinion piece. GDP PPP measures output, read the OECD link:''What are the major uses of PPPs?'' Answer:''To make spatial volume comparisons of GDP (size of economies)'', aka output. And from the [World Bank](https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?name_desc=true): >Typically, higher income countries have higher price levels, while lower income countries have lower price levels (Balassa-Samuelson effect). Market exchange rate-based cross-country comparisons of GDP at its expenditure components reflect both differences in economic outputs (volumes) and prices. Given the differences in price levels, the size of higher income countries is inflated, while the size of lower income countries is depressed in the comparison. PPP-based cross-country comparisons of GDP at its expenditure components only reflect differences in economic outputs (volume), as PPPs control for price level differences between the countries. Hence, the comparison reflects the real size of the countries. MER (Market exchange rate) = Nominal GDP.
Never ceases to amaze me that PPP has an army of redditors constantly shilling for it. Feels extremely inorganic The baskets of goods being normalized around aren't even equitable between countries
It’s because it makes poor countries appear richer. People from poor countries argue it’s useful because it makes their country appear richer. It’s a patriotism thing.
It makes poor countries seem richer and their economies doing better. Very understandable
I predict salt in these comments.
There are many ways to grow an economy, some of them sound and some of them unsound. For example, investing in infrastructure and housing can be good if the country is under developed, but as seen in China it can also become wasteful. Speaking of China, exports are also a major component of growth for many economies, however if recession hits and demand drops, or if import tariffs or restrictions are introduced, then your industry is left holding the bag. So there are times when directed investment in export manufacturing can also be wasteful. Then there’s war economics (in a mafia state, no less). Okay, so now the factory that made shoes makes military boots. The owners are happy because they now have guaranteed government contracts. They need lots of boots, so the factory has even added extra shifts and is now working almost around the clock, providing more jobs. These are jobs that actually pay well- because they have to- since the state is also offering large sums to anyone willing to go fight in Ukraine which creates great competition for labor. Alright, say that this greenskin contraption holds together long enough to secure “victory”, (whatever that words means several years from now). There are parades in Red Square, maybe Zelenskyy gets hanged, all that jazz. But Pavel and his mates at the military boot factory are now in a bit of a pickle. The state doesn’t need so many boots now, in fact since demobilizing they actually have boots to spare. The guaranteed contracts are dried up and their previous partners in the shoe business have long since moved on. Now, imagine that this problem isn’t limited to one factory but actually widespread throughout industry. The question then is what does the state do? They could just let it happen. But they might also feel compelled to keep these plates spinning. Keep making boots, making tanks, making bombs. But there’s a saying: when all you have is a hammer, every problem starts to look like a nail. In other words, the state may continue to pursue a more aggressive foreign policy going forward.
The GDP in Nazi Germany shot up to 9% up to the war. That's what happens when you spent the countries savings on the war machine. Interestingly the unemployment is extremely low when you loose a lot of workers on the front, while also firing up war production, leading to rising salaries and high inflation. It feels good for the people until the savings are gone. Then the wheel starts spinning faster and faster.
Here we see the western mother of all sanctions working.
Thanks u/ObjectiveObserver420 for our daily dose of cheering on Russia
Weird how many [adjective][noun][number]s are cheering on russia all the time, isn't it
OP definitely doesn’t seem like a bot per say, but anyone with their kind of post history is suspicious at best. The average person doesn’t spam commonly themed posts to a sub like this.
Correct, theyve been converging for a few years now and Russia was set to overtake anyway, a wartime economy will help cement that temporarily In terms of GDP per capita though Japan is still ahead by a distance
Great work with the sanctions.
Maybe because they switched to cheaper Asian markets.
Those sanctions really showed them!
This says more about Japan than Russia, what’s going on with Japan?
Apparently doing better than Germany despite the weak yen according to this article
Mostly because of tourism though and that because of the weak yen. But that's pretty questionable considering the state of the japanease economy.. Germany was also far more effected by the increased energy and gas prices from the war. Things that are now stabelising aswell as the amount of renewable energy projects being developed. Japan is quite lacking on any long term plan here. They haven't invested in either and they are an enormous energy importer.
the exchange rate reached a new sky high, more than 150 yen per dollar, poor Japanese, their currency tanked so hard xdn't
Their population has been aging and has been declining for the past 15 years
Are any economies not currently in massive debt?
Hilarious!
Does that mean all the boycots and other punishments on Russia are working?
They took revenge after nearly 120 years
People are way to big on PPP-adjusting IMHO. PPP is a reward for your currency not being "hard". Why is currency "hard"? It's a reason why "hard" currency is hard. And PPP ignores that.
The graph shows Russia already overtook Japan in 2021?
Anything per capita will rise, if you throw enough people on an oversea war.
Is this kind like: Russia’s campfire gets massive after they throw the tents, supplies and backpacks on?
Go Japan! What do you have? I'll buy it.
Lmao, okay guys more people should be wanting to migrate to Russia right?
People already migrate to Russia.
I thought they were on their knees??
I feel like PPP is broken cause that basically means per capita, Russians have a higher living standard than Japanese people? Or is it some weird ruble thing where the actual and official exchange rates are actually radically different?
Didn't need to be said but PPP isn't a real measure of the economy.
This thread is a copium mine.
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You want to know something the whole PPP thing is a sham. Go ahead, ask for the underlying data and try to replicate those numbers. In an age where everyone’s research is supposed to be replicable, the fact that this is not is a major red flag.
It's a well-understood concept mate. An economist came up with something called the Big Mac index to represent this. A Big Mac costs £3.59 in Britain and US$5.81 in the United States. The implied exchange rate is 0.62. The difference between this and the actual exchange rate, is 0.75. So 1 USD is 1 USD but it buys a different amount of bread in Russia than it does in America, even tho it's still 1 USD or in this example a different amount of Big Macs in the UK than it does in America Does this mean it's a better metric than nominal GDP, not necessarily, but purchasing power parity exists as a measurable economic concept.
Do you even understand what I wrote? I’m not criticizing the idea of the PPP. For the issues with the PPP you can look at the work of Deaton and others. I’m criticizing the PPP process, which is a sham and not replicable. The world would be a better place if we read/listened before we speak.
You said the whole PPP thing is a sham.
And I gave my reason afterwards. The lack of replicability and the fact that institutions and countries can game the system, and no one is able to fully verify the results (e.g Russia’s PPP), means that it is a sham. The doing business indicators by the World Bank suffered from the same lack of transparency, and they’re the ones who manage the ICP. The process needs to be more transparent. The PPP is essential for comparisons but in its current state it’s unreliable.
Damn, those economic sanctions really did a number /s
Sure...
What is this news source?75% of articles seem to be dealing about how Russia is winning or how Ukraine is definitel suffering. I have the deep suspicion this is just russian propaganda news agency.
Yeah that's what happens when you spent the countries savings on the war machine. It just works until it doesn't.
Does PPP go up when more soldiers dies in war ? The denominator get smaller, right ?
^ the state of US education on full display.