Why is Russia so strong?

I find it funny every time people find it surprising that Russia, “a country with the GDP the size of Italy” turned out to be able to hold the entire world economy hostage, sanctioning it proved deadly for the ones doing the sanctioning, and its currency actually appreciated significantly once it was removed from the forex markets.

The explanation is very straightforward, but not simple, and points to something vital, so I’m going to get into the weeds, so to speak.

The first aspect is that Russian economy behaves in patterns typical for 3rd world colonies of great powers. This means that it exports mostly cheap raw materials and imports expensive industrial products. This doesn’t look like an accident, but any amount of reduction in exports and utilization of those raw materials for domestic production increases their profits significantly, which explains why Russia thrives under sanctions.

Also, the reason why Russian currency recovered is because America can’t use its financial trickery to print money out of thin air and then suck their resources dry, and export their overpriced goods back. Furthermore, due to restrictions on use of USD and EUR for international payments, RUB suddenly became highly necessary.

The GDP question is trickier to answer, because there are several layers to the issue. The first is that the GDP was synthetically and deliberately underestimated, compared to the GDP of Western countries; for instance, Russia has a huge gray economy which is completely ignored, and if you do, it becomes hard to explain the actual purchasing power of the Russian people, which is much greater than one would guess. Also, the prices of domestically produced goods and services are quite low. Also, the credit rating agencies are an instrument of American foreign politics and are inherently fraudulent; they basically serve the purpose of making credit cheap for countries that are subservient to America, and expensive for those America wants to compete with. Russia is an especially interesting case because it had very low debt, it serviced it reliably, and its credit rating was bordering on junk. This made credit very expensive for both Russian state and Russian corporations and citizens. In an average Western country, debt is cheap and is widely used to grow businesses and finance spending. All of this increases the GDP numbers. In Russia, since debt was expensive, they had to finance growth from exports of raw materials, which is another factor that led to the smaller nominal GDP, but with the benefit of an almost nonexistent sensitivity to debt-related pressures such as the devaluation of the credit rating, which would be lethal for any Western country. Basically, by making things hard for Russia during the past decades, America in fact made Russia resilient, independent and insensitive to foreign pressure.

There’s also the question of Russian military, which is greatly underestimated in the West based on the numerical indicators. Those are even more deceptive, because Russian weapons manufacturing is designed to be incredibly cost-effective, and the weapons themselves are highly resilient and good in actual combat. Also, there’s the mistaken belief that Western weapons are technologically superior. This is not the case; if anything, it’s the other way around. The idea that Western weapons would magically change the situation in Ukraine is a complete illusion. Technologically, Russia has everything from spy satellites, rockets and aviation to drones and, for all intents and purposes, killer robots. The only thing they don’t have are the aircraft carriers, and that’s because they never had an use for them in their strategic planning. They are used for projecting power to weaker remote countries, and Russia never had any interest in that, so they made a few aircraft carriers just as a token and for experimentation, but they never invested much resources in them because they are of marginal use. It is my estimate that in any military conflict between NATO and Russia, NATO would be beaten so decisively, they would have to resort to the use of nuclear weapons. Ukraine is de facto the strongest NATO military at this point, and they are basically destroyed by Russia’s little pinky finger. America would not fare any better, because for each escalation in weapons strength and sophistication, Russia has an equal or stronger response. Each attack on Russian mainland would be matched by an attack of equal or greater magnitude on American mainland. America is neither safe nor protected from Russian retaliatory strikes, because Russia is neither Vietnam nor Iraq. America never fought an enemy that can strike their mainland at any time with whatever power they choose. That experiment would end very badly, and quickly.

There’s another important issue, perhaps the most important of all – the West is used to setting the market terms in ways that price their imports very low, and their exports very high; basically, what you produce is cheap and worthless, and what we make and export is precious and wonderful. This created an illusion of Western supremacy which ended as soon as they actually started believing their own propaganda, and sanctioned those “cheap and worthless” products, which turned out to be essential things nobody can live without in a modern society, and the stuff they make and export turned out to be trinkets with inflated brand value that nobody really needs, and are rather in the domain of “wants”. Nobody really needs an iPhone, a Mac or some fancy brand of ice cream. I’m writing this on a late-2017 Asus Zenbook, running Linux and LibreOffice, and it’s fine; it’s more than fine in fact; it would be considered alien tech in the 1990s. My new Macbook is better, but it’s not that much better that I would trip over myself and die if I had to use less advanced tech without American IP. More likely, I would shrug it off and do perfectly fine, realizing that I need America and their stuff much less than everybody thinks they do. I actually test such ideas occasionally, checking how much stuff I actually need to function in a modern society, and how much of what I have is merely “want the new shiny gadgety thingy”, and I concluded that I could do with a Raspberry Pi in a pinch, but not without electricity, diesel and gas, let alone food. Apparently, Russia produces the stuff we actually need, and the West produces the “intellectual property” in the stuff that we want; not even the actual stuff, mind you. So, the question is, could everybody survive with Chinese smartphones and laptops, but without Russian minerals and hydrocarbons? Yeah. It turns out that something is cheap when it’s abundant and you just assume it’s there, like air, but when air suddenly isn’t there for you to breathe, it becomes precious quite suddenly.

When you turn out to need someone for basic survival, and they don’t need you very much at all, it means that, for all intents and purposes, they are more powerful and important.