In February 4th 2022, Russia, a once seemingly dominant country in the world with the 2nd strongest military, launched a full scale invasion of Ukraine. Although a strong military, Russia has not kept itself from corruption, and as of September 2023, the war still rages on. However, it's not like the world is just watching, many countries and citizens are doing their best to support Ukraine in its war against Russia. The West has been hitting Russia with sanctions and as of April, they hit Russia with a sanction on the basis of “War Crimes”. However, Russia will not fall, in an economical sense. Sanctions are a means to damage the economy, however, in the case of Russia; they don’t care. The citizens could be starving however Russia will still go on with its war.
Russia is a country with the lowest national debt, meaning that if Russia wants to, they can go in a deficit for the next 10 years and still come out. Analysts have claimed “Russia is usually one of the ten least-indebted countries in the world. Russia’s debt is currently at a total of just over 302 billion USD.” Thus they can go on with this war for as long as they want until the populace has had enough.
Although Russia can hold on, that doesn't mean that it has not been hurt by sanctions, one of Russia's biggest exports is that of oil, not just oil however, natural gas. This natural gas is one of the leading energy sources that produces a somewhat clean energy. This venture of selling this energy however, has been cut short in Europe. Europe has placed heavy sanctions on Russia and aims to cut off Russian supply in the near future. An example can be seen in Nord Stream 2 where Germany has cut off its construction and its certification.
This pipe, honestly should never have been a thing in the first place. While benefiting Germany in the first place, many countries including the USA detested the pipe's construction as increasing Germany's reliance on a power such as Russia was detrimental to NATO’s goal of fighting against Russia. Like, even Trump, who is not really seen in a very good light within younger generations and has done many questionable things, has outright gone against the construction. Although it is now not gonna be finished, Germany’s insistence on this pipeline can be seen as a weak point of NATO and its future as many countries have their own initiatives and objectives they wish to complete.
This cancellation of Nord Stream 2 however does not mean Russia can no longer export its resources, when one buyer is out, another buyer is sure to come in. This time however, it came in the form of India and China, both of which are buying larger and larger quantities of natural gas and oil. This increased purchase of Russian energy is what Russia needs to keep its war with Ukraine going.
In my personal opinion, Russia, while being targeted by the West, will not fall. As of September 17th 2023, Russia’s war with Ukraine is still ongoing and has seen no stop. Russia's unstoppable economic power along with Russia’s low national debt has seen to it that Russia will have the money to back its war and will not stop until they reclaim Ukraine or what's left of it. However, that cannot be said about Ukraine. Russia is at this point playing a war of attrition where it throws money and men into the war to whittle down Ukraine until the western powers see that it is no longer worth supporting Ukraine. The USA and its government runs under a system of population governance where the government is influenced and run by the people that inhabit the country the government is formed upon. Therefore, any sway in the populace to no longer support the war will result in western or US support running dry just, and like Afghanistan and Vietnam, Ukraine will too fall under the pressure of the enemy.
https://www.cnn.com/2022/02/22/business/nord-stream-2-germany-russia/index.html
https://worldpopulationreview.com/country-rankings/countries-by-national-debt
https://www.bbc.com/news/world-europe-50875935
6 comments:
I found it really interesting that Russia is the country with the lowest national debt. A low national debt would seem to symbolize economic stability, and something other countries should strive to achieve. Apart from Hamilton's theory that a national debt would keep powerful elites invested in the fate of America when it was a young republic, I don't see any other reason why a country would want a high national debt. Russia is, of course, the face of an authoritarian and oppressive regime, and rightly painted as a symbol of "bad government" by many in the West. Yet, they seem to be thriving economically if a low national debt is good. Why are other countries like the United States or Germany, who are painted as "good government" with their democratic practices, not doing as well economically? Is there an inverse relationship between a strong economy and protection of freedoms?
While Russia does not have a large amount of debt, the effects of debt are ultimately based on investor confidence in a country to pay debts back. Russia has embarrassed itself on the world stage and has let it slip that their military and national infrastructure were vastly overestimated previously. All in all, Russia does not have the same leeway as the U.S. when it comes to the debt ceiling sorely because of their attempt to conquer Ukraine. What should have taken an advanced military a matter of months is instead being dragged over years. A possibility is that Russia can just "take over" the properties of its oligarchs, and pay its debts that way, but even that would not be sustainable and would only cause further deterioration of Russia's economy.
Low debt does not necessarily translate to a good economy. Eswatini, Afghanistan, and Burundi are all ranked near Russia for having the lowest debt to GDP ratio, and all have faced extreme economic challenges and instability. Assuming a good credit history and fiscal responsibility, countries such as the United States can borrow large amounts of money in a sustainable way. Russia's minimal debt is not by choice, but rather as a result of a lack of investors' confidence in the Russian economic system. The Russian 10 Year Government Bond yield is 12.685% (a higher yield compensates for a higher risk of default) while the US 10 Year Government Bond yield is 4.555%. A common misconception is that American support for Ukraine is “free”. Under the Lend Lease Act (the same which was used to loan money and military equipment to the United Kingdom and other allies during WWII), Ukraine will eventually have to pay back the United States for much of the military assistance it has received at an interest rate that will likely compensate for inflation. The size and stability of the American economy, the ability to deteriorate an adversary without risking the lives of American soldiers, and the possibility of eventual repayment makes me believe that American support for Ukraine will continue. While the Russian economy may not fully collapse, the growing human and financial toll will likely lead the Russian population to question the necessity of the “Special Military Operation” and whether Putin's expansionist goals truly align with the needs of the people.
Others have touched the idea that Russia's low debt levels may not be as big of a factor as it might seem, but I want to address the comparison to Vietnam and Afghanistan. In these wars, the US had its own troops fighting the war and subsequently losing their lives over an uncertain target. In my opinion, the US's support of Ukraine is significantly different, as it is just fiscal/armament aid rather than Americans being sent off to fight. With much less skin in the game, I think the American populace will be more supportive of this conflict as opposed to Vietnam or Afghanistan as money is seen as more expendable than teenagers' lives. Additionally, Putin seems to me as a much more tangible evil. Granted, I never followed the War in Afghanistan too closely and wasn't around for the Vietnam War. However, the increased presence of social media has allowed for the Russians' atrocities and attacks on Ukraine's civilians to be seen by anybody with a device, which I think has an unquantifiable effect on public opinion. Heck, I've seen bodycam footage of the war just casually being shared on the internet, something unfathomable a few decades ago. Maybe one day in the near future the footage of the war will instead sway Russian public opinion enough to cause an anti-war movement akin to our Vietnam, though attrition is the name of the game for now.
As others have commented on the factor of debt in this discussion, I would like to discuss another perspective against your main idea of why this idea around low debt is why Russia can not fall. Many mention that as the atrocities of Russia are continued to be seen, there will eventually be an anti-war movement and enough opposition to stop this war, and this idea of an inner battle is truly what I think will be one of the stronger factors in Russia's fall. As seen in Russia's history with tensions over rule and dictatorship, a civil war between the politics of this nation will help bring its end in the modern world.
The main idea is that a civil war between an "autocrat, Russia’s military, and rival militia chiefs" who dispute over control of a nation with an immense nuclear arsenal, will cause mass instability. Earlier this year during our summer, chief Yevgeny Prigozhin mocked the Kremlin before deciding now stop his march on Moscow. Some assume this was a display of his current power and attempt to grasp more. The Kremlin strongman had consequently appeared to be almost willing to engage, but after the retreat, Putin accused him of treason. Such schisms may suggest that an end to Putin's rule may near and allow total opposition towards Russian rule to bring the nation to the ground.
Source: https://www.cnn.com/2023/06/26/politics/wagner-putin-us-ukraine-analysis/index.html
I COMPLETELY agree with Brennans assessment that Russias low debt is more reflective of low investor confidents rather than a strong economy. Russias failed attack on Ukraine has exposed their weak military and equipment while further weakening their already vulnerable government through sanctions. Russias failed attack was due to a lack of proper equipment information to Putin who surrounded himself with corrupt government officials who cared more about making superiors happy with false information rather than actual data. Putin started this war highlighting their military failures which was previously thought of as a one the worlds strongest militaries.
Another factor to consider which would keep Russia in power is its nuclear arsenal. As the nation with most nuclear weapons in the world, the west will try its best to not provoke Russia to start a nuclear war in Ukraine by listening to their demands. However, we will never fully know if their nuclear arsenal, much like their equipment used in Ukraine, is also faulty and not functional. But because there is no real way to determine if their nuclear weapons are functional, they will hold this power threatening to prevent Russia from falling.
https://www.csis.org/analysis/russias-ill-fated-invasion-ukraine-lessons-modern-warfare
https://www.cnn.com/2023/12/12/politics/russia-troop-losses-us-intelligence-assessment/index.html#:~:text=%E2%80%9CAs%20of%20late%20November%2C%20Russia,in%20Ukraine%20since%20early%202022.%E2%80%9D
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