As this is being written, Russia continues its war against Ukraine. It appears to be maintaining a significant cash flow from the sale of its natural resources, mainly oil and natural gas. It appears to have made an ally of China and has escaped sanctions by many of the world’s governments. Yet it is losing some of its best customers under the sanctions imposed by Europe and the US. This is hurting its economy, though perhaps not yet as much as was hoped. What appears to be the most serious problem for Putin as he executes his war with Ukraine is the quality of his army. It was clear in 2014 when Russia grabbed parts of Ukraine that it would be coming back for more. This interim stage gave Ukraine and its army time to prepare, while giving Russia time to stockpile enormous amounts of munitions. What Russia couldn’t stockpile was the necessary manpower to wage a serious war with a competent opponent. One wonders if the country has any generals left. About a dozen are believed to have been killed in battle, and perhaps more than that have been fired or demoted. Putin seems unwilling, or unable, to dare a general mobilization to fill his ranks as they are depleted in the fighting. Reports indicate that he has had to recruit mercenaries from within Russia and from other countries: people who will sign a short-term contract for money. Reports also indicate that these new recruits are provided little time for training before being thrown into battle.
Ukraine has about a third the population of Russia. That is enough people to support a sizeable army. And, as Russia should know, when a country is fighting for its life, the dedication of the recruits is going to be quite high. If Ukraine can continue to gain needed hardware from Europe and the US, it could be more than a match for Russia.
What is it about Russia that has caused it so much trouble with manpower? Russia has never developed a healthy society buttressed by a healthy economy that provided opportunities for its general citizens. It has been cursed by a combination of highly hierarchical social traditions and a wealth of natural resources. Under the Tsars, wealth was controlled by the Tsar and a collection of princes and counts along with religious leaders. Everyone else serviced the estates of the nobility or performed manual labor as serfs. Putin has essentially reproduced much of this system with himself having Tsarist powers and an array of wealthy oligarchs to support his power. The focus of the economy is on taking advantage of natural resources rather than developing a balanced economy in which Russian products of all kinds compete in a global marketplace. The focus on products such as oil and natural gas that are massive with large cash flows, provides perfect opportunities to capture wealth and hide it. Putin used this cash flow to prepare for war and support a passive society with cheap energy and other social benefits. Meanwhile, his collection of billionaires and their companies had considerable leeway in diverting capital out of Russia.
One reason for using paid contractors as soldiers is that the typical Moscow young man would have no interest, nor any motivation, to go to war in Ukraine. But those stranded in the far distant outposts of Russia’s extraction economy might view it as a means of escape from the isolation and drudgery. Putin is further limited by a falling population that is easily convinced to leave when the going gets tough. This source, Russian fertility rates fall to record lows on the back of a deteriorating economy and sanctions pressure, provides some perspective.
“Russia has one of the lowest fertility rates in the world of 1.58 births per woman, which is also below the replacement rate of 2.1 births per woman. Russia also has one of the oldest populations in the world with an average age of 40.3 years, according to demographers.”
“In the last decade Russia has made up for the demographic shortfall in its natural population by attracting significant numbers of economic migrants, mostly from Central Asia. However, the coronavirus (COVID-19) pandemic of recent years coupled with a deep devaluation of the ruble in 2014 and again in 2020 has made Russia less attractive as a work destination and the number of migrants has fallen significantly, worsening the demographic problems.”
“Russian emigration is also a problem. While emigration was low during the boom years of the noughties, it started to explode in 2012 after Putin began his third term as president. More recently, since the start of the war in Ukraine in February an estimated 1mn Russians have left the country and emigration is anticipated to stay high as the economic situation continues to deteriorate.”
Russian society is blighted by a tradition of corruption. It is disillusioning to the bright, well-educated young people the country can produce, and inefficient in running a war. Putin can allocate large sums to his military, but it is not clear that he can guarantee that much of it is not stolen as it filters down to the actual soldiers. Tales of lack of food and other provision for his troops are what one might expect with an organized kleptocracy.
Whatever the short-term evolution of this conflict, the longer-term effects of global warming will ultimately determine Russia’s fate.
Most of the world has begun to realize that climate change is a real phenomenon that must be anticipated and planned for. Russia, as a major provider of natural resources, will be greatly affected. Some analysts go so far as to predict that Russia’s geography will allow it to benefit from a warming climate. Thane Gustafson has been following Russian developments for many years. He was moved to devote an entire volume to the effect of climate change on Russia’s economy and government. It is titled Klimat: Russia in the Age of Climate Change and it does not bode well for the future. Gustafson published before the Russian invasion of Ukraine so there is no reference to the war and the current sanctions placed on Russia, but his take on the effect of climate change should still hold true.
The author’s goal is to predict Russia’s state as it reaches the year 2050.
“On present trends, despite the plethora of political pledges, the world will have missed its targets for greenhouse emissions by a wide margin. Instead of ‘zero carbon,’ annual CO2 emissions will have grown from todays 35 billion tons to over 50 billion. The world will have warmed, not by the 1.5 or 2 degrees Celsius that it has risen since the beginning of the Industrial Revolution, but perhaps by 3 to 5 degrees, particularly at Earth’s northern latitudes, where most of Russia is located.”
Gustafson’s analysis seems to be based on global climate remaining within the 1.5-to-2-degree range, at least until 2050. However, the temperature rise experienced in Russia will be greater.
“Temperatures are rising 2.5 times faster in Russia than in the rest of the world. Between 1998 and 2018, there was a 300 percent increase in what Russia statistics call dangerous weather events. These include floods and fire, but the greatest threat is drought, combined with increasingly violent rains.”
Will Russia see what is coming and respond accordingly? Will it join the world community and contribute to the effort to limit greenhouse gas emissions? Russia, like many other nations, has leaders whose opinions are tainted by their economic circumstances. If your income is from selling oil, you will figure out a way for climate change to not be a threat. Consider Vladimir Putin.
“He continues to downplay the negative consequences of climate change for Russia…It was only in 2019 that Putin acknowledged for the first time that the global role of oil might begin to decline in favor of gas and renewables, but he did not see that happening soon…he continues to see a strong future for hydrocarbons in the form of gas, and especially LNG (liquid natural gas).”
“Some may argue, especially in Russia…that in some respects climate change could even be beneficial for Russia. I argue that such a view is profoundly mistaken. The internal impact of climate change will be primarily negative. Any internal benefits it may bring to Russia will be overwhelmed by the impact on Russia of the energy transition in the rest of the world.”
One of the successes of the Putin era has been the growth of Russia’s agricultural exports. It is occasionally viewed as an area that would benefit from a warmer climate. Instead, Gustafson argues that Russia will have to work hard just to maintain its agricultural productivity. It uses the same practices as the rest of the world and is beset currently by the problems of soil acidification and soil erosion. A warmer climate might help for a while, but there is no more soil left that can be brought into production. Seventy percent of Russian terrain consists of useless permafrost.
“As one moves out of the present agricultural land area, soils are generally poorer, thinner, and more acidic. To the north and east, even though permafrost will melt, the resulting exposed soil is infertile. Permafrost is not actually soil, but a mixture of sand and ice, and it has not had the long accumulation of humus that results from plant life or the action of underground organisms. A recent government survey of the state of Russian soils concludes flatly, ‘Russia has very limited resources of soil suitable for agriculture. Climate change will not increase this area. In other words, there is no potential for further expansion of agricultural land in the country’.”
Russia is locked in a position from which there appears to be little chance for recovery. Its economy, and its society, is based on the continuation of income from selling gas and oil to external users. As its customers make the inevitable switch to renewable energy, Russia will have no Plan B
“Russia’s entire political and economic system rests on the formal and informal distribution of ‘rents’—payments, especially those from fossil fuels, many through multiple channels that bypass the formal budget. These include the direct social costs covered by the producers themselves…the hidden subsidy provided to gas consumers in the form of low domestic prices, and the cost of padded construction contracts awarded to favored interests, as well as the steady leakage of profits abroad by various ‘informal’ channels. As the best reserves are produced and production costs go up, and export revenues decline, the flow of available rents will decline throughout the system, with potentially destabilizing consequences, both economically and politically.”
“Even now, high global commodity prices have not been sufficient to keep the Russian economy growing at more than a snail’s pace over the past decade. As time goes on, the state will have fewer means available to cope with the consequences. This will be a major change, in view of the leading role the state has always played throughout Russian history, and particularly in the past century, in both the Soviet and the post-Soviet eras. This in turn will lead to a number of further consequences.”
Putin may dream of a greater Russian empire dominating
the Eurasian land mass, but the Russian future begins to look more like just a
replay of the fall of the Soviet system: another poorly constructed system
unable to change with the times.
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