Amusingly, we’re seeing history on repeat here. In the early 20th century, while western economies were becoming increasingly intertwined, the Soviet Union stood apart. As the sole communist state, its trade connections with the capitalist world were minimal. When the Great Depression struck, closely linked economies of the capitalist countries suffered devastating blows, while the Soviet Union’s closed system largely shielded it from the crisis.
In fact, one could argue that the depression even benefited the USSR. Desperate times in the West created a unique labor pool for the Soviets. To fuel their ambitious industrialization plans, they recruited skilled workers, especially from the USA. Engineers, farmers, and industrialists flocked to the USSR, in search of opportunity.
Don’t think it’s an honest comparison. Russian economy basis is capitalist, with all the downsides it inevitably has. And it’s not even “decoupled” either, what with massive imports from China and increasing trade with Iran, plus the still ongoing business with Europe and USA. Heck, Russia is still pumping gas to Europe through Ukraine
It’s obviously not a direct comparison. That said, while Russian economy is capitalist nowadays, it’s quite different from the financialized western economies. There’s a focus on industry and self sufficiency that simply doesn’t exist in the west. Furthermore, Russia never fully embraced liberal policies and the state remains at the commanding heights of the economy. A 2023 World Bank study gives a pretty good overview of this. In particular, it distinguishes between businesses of the state (BOS), that are at least 10% government owned by some government, and state owned enterprises (SOE), which are majority owned or more, and controlled, by the government.
Russia’s high levels of SOEs is not far behind China by many measures.
Central bank plays a big role in Russia as well, and has large influence over the funding of the private enterprise. FT even moaned about state directed economy standing up to sanctions back in 2022. Also, here’s an article talking deprivatization of Russian economy.
Meanwhile, trade with China and Iran are unlikely to be hugely affected by an economic crash in the west. If anything, it’s going to make Russia a more important trading partner for these countries.
Decoupling from the West isn’t the economic death sentence it used to be. This gives me hope that one day GCC economies might do the same.
Amusingly, we’re seeing history on repeat here. In the early 20th century, while western economies were becoming increasingly intertwined, the Soviet Union stood apart. As the sole communist state, its trade connections with the capitalist world were minimal. When the Great Depression struck, closely linked economies of the capitalist countries suffered devastating blows, while the Soviet Union’s closed system largely shielded it from the crisis.
In fact, one could argue that the depression even benefited the USSR. Desperate times in the West created a unique labor pool for the Soviets. To fuel their ambitious industrialization plans, they recruited skilled workers, especially from the USA. Engineers, farmers, and industrialists flocked to the USSR, in search of opportunity.
Don’t think it’s an honest comparison. Russian economy basis is capitalist, with all the downsides it inevitably has. And it’s not even “decoupled” either, what with massive imports from China and increasing trade with Iran, plus the still ongoing business with Europe and USA. Heck, Russia is still pumping gas to Europe through Ukraine
It’s obviously not a direct comparison. That said, while Russian economy is capitalist nowadays, it’s quite different from the financialized western economies. There’s a focus on industry and self sufficiency that simply doesn’t exist in the west. Furthermore, Russia never fully embraced liberal policies and the state remains at the commanding heights of the economy. A 2023 World Bank study gives a pretty good overview of this. In particular, it distinguishes between businesses of the state (BOS), that are at least 10% government owned by some government, and state owned enterprises (SOE), which are majority owned or more, and controlled, by the government.
Top line result is shown in the following chart:
And here’s another chart showing SOE in Russia compared with China https://cepr.org/voxeu/columns/state-owned-enterprises-global-economy-reason-concern
Russia’s high levels of SOEs is not far behind China by many measures.
Central bank plays a big role in Russia as well, and has large influence over the funding of the private enterprise. FT even moaned about state directed economy standing up to sanctions back in 2022. Also, here’s an article talking deprivatization of Russian economy.
Meanwhile, trade with China and Iran are unlikely to be hugely affected by an economic crash in the west. If anything, it’s going to make Russia a more important trading partner for these countries.
Finally, energy exports, while much of the focus in the west, constitute a fairly small part of the overall economy in Russia. https://www.statista.com/statistics/1314532/gdp-share-by-industry-russia/