EDITORIAL: Russia’s Economic Morass



Russia’s Economic Morass

The Moscow Times has made an impressive major reworking of its website design, and part of it allows the mighty little paper to publish larger photographs and images, such as the brilliant editorial cartoon show above which captures the fundamental dishonesty of the Russophile hoards who rabidly seek to defend the Putin regime from its obvious and endless economic failures that have brought the nation to its knees.  Their ridiculouse lies hide the truth only from the lemming-like people of Russia themselves, while the rest of the world gapes in horror and pity.

The cartoon accompanied an editorial from the Vedemosti newspaper that is published with assistance from the Moscow Times and which is one of Russia’s last remaining bastions of real information — though like all the others it is ready a perilous few.

The editorial lays waste to the notion that Russia’s economy can or will recover in any meaningful way from the economic apocalypse that has seen it shed 75% of the stock market’s value, one -third the value of the national currency and FOREX reserves and totally obliterate one of the major budgetary reserve funds as the budget deficit skyrockets.  The Putin regime is thoughtlessly squandering funds meant for social programs to relieve national suffering, funds which were already inadequate to accomplish their alleged goal.  Inflation is still hopelessly out of control, home loans are far beyond the reach of most ordinary Russians, thousands of one-industry towns like Pikalyovo teeter on the brink of collapse  and unemployment is soaring at crisis levels.

Vedemosti makes things quite clear:  “Both inside and outside of Russia, politicians and analysts are focusing on economic indicators that point to the end of the recession. This is a much-needed dose of optimism, but unfortunately little qualitative change has taken place.”  Vedemosti points out that while Russia is on pace to post a double-digit recession, the G-7 nations will average less than a 4% contraction, with significant growth in the third quarter.

Then Vedemosti makes the key point:  “The crisis did not change the fundamental global financial structure: The West consumes and the East manufactures. The problem, however, is that the West clearly can no longer consume as much as it did previously, and the East does not have enough domestic demand to sop up the excess supply that the West cannot buy.” It then adds:

Many analysts believe that when the global crisis hit in fall 2008, Russia was already going through its own cyclical crisis that had begun several months earlier. But the Russian government did not take adequate steps to cope with the consequences of either crisis. According to Standard & Poor’s, the uncoordinated anti-crisis measures among the country’s various economic ministries and government institutions only made an already severe crisis even worse. What’s more, this situation will hinder Russia’s ability to pull out of the crisis in a timely manner. Russia’s economy is still just as overly dependent on raw materials exports as it ever was, and if oil prices remain high the hard lessons of the crisis will be easily and happily forgotten.

But it seems very few others in Russia have this basic understanding, which is why Putin’s popularity remains high. And they lack it because their primary source of news, TV, is dominated by the Kremlin and simply does not report it.  Russians know they suffer economic privation, but they think it is because of a massive Western conspiracy to do Russia in, not because of the fundamental incompetence of their totally unqualified leaders. For this reason, Russia is doomed to go the way of the USSR.

4 responses to “EDITORIAL: Russia’s Economic Morass

  1. there is joke from Soviet times: There are two way of bringing order, justice and wealth – real and unreal way. Unreal way – russians just organizes and do the job. Real way – martians arrives and do that.

  2. This is also worth a read, having been posted on the MT site, too.

    Russia ranks 120th in the World Bank’s annual “Doing Business” report, which evaluates laws and regulations that affect business activity in 183 countries.

    Meanwhile, Russia fell 12 places in the “Global Competitiveness Report,” published by the World Economic ­Forum, to 63rd out of 134 countries. It was ranked lower than Azerbaijan, which replaced Russia at No. 51, but higher than other CIS countries. Switzerland, the United States and Singapore topped the list.


  3. One should always quote how the Russian top officials in 2008 excepted their country to be “the oasis of stability”, or even how they would emerge from the crisis to dominate the world-in-ruins. It either shows how cynical or how insane they are.

    • “It either shows how cynical or how insane they are.”

      I’m going to go with both on this one. I truly believe that Russia/Russians would love to see the world’s entire economy go tits up, just so they could “gloat”, although they would be suffering even worse.

      In terms of the “oasis of stability”, they neglected to connect the dots to figure out who would buy their price-inflated natural resources in the event of the world’s major consumer countries reducing their consumption and production.

      It is similar to the Russian government’s shutting off of the gas supplies – they just do not fathom that they are selling something for a profit and that it would behoove them long term to maintain amicable relations.

      The country, as one/many academician(s) has/have stated, Russia has always been at least 100 years behind other European (US and Japan, too) countries. The Enlightenment just seems to have passed the country right over.

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