Russia - General Discussion.

KipPotapych

Well-Known Member
Some talks around altering the Russian nuclear doctrine. Kommersant talked to a few Russian experts on the subject and here is what they had to say, thought some may be interested. I used google translate for the descriptions of who the people are. The rest are summaries in my own words.


Alexey Arbatov
Head of the International Security Center of the National Research Institute of World Economy and International Relations named after E. M. Primakov of the Russian Academy of Sciences (IMEMO RAS), Academician of the Russian Academy of Sciences

- He says that while doctrine allows for different interpretations and debate around it, the current doctrine is the best they ever had. He is proposing only one rather boring change and that is to include the allies into it. In other words, Russia can use nuclear weapons when their allies are attacked with conventional weapons and the existence of their state is threatened. Basically the same “rule” they currently apply to Russia.

Grigory Berdennikov
Expert of the Center for Energy and Security, former Deputy Minister of Foreign Affairs of the Russian Federation, who oversaw non-proliferation and arms control issues, former Permanent Representative of the Russian Federation to the Conference on Disarmament in Geneva and international organizations in Vienna

- This guy clearly had done some extensive work in the area. He thinks that in the current situation it would not be appropriate to have stricter restrictions than the Russian opponents have. He stresses, however, that there should be no obligation for the state to use nuclear weapons in any situation. In other words, the decision has to be made by the competent people, the highest power.

Furthermore, he is suggesting that Russia should align their nuclear doctrine with the agreements reached in 1995 (between Russia, USA, Great Britain, France, and China) where Russia agreed not to use nuclear weapons against nonnuclear states, unless those states attack Russia and are supported by another nuclear state. Here is drawing a parallel between Ukraine that is supported by the US (of course, France and the UK as well) and is currently attacking Russian territory. He suggests that drone attack on Kremlin and Kursk incursion would clearly fall under these circumstances. He further suggests that since this clause had already been agreed upon previously, the United States, UK, and France would have limited ability to criticize Russia for such a change.

Vasily Kashin
Director of the Center for Comprehensive European and International Studies of the National Research University "Higher School of Economics", Senior Researcher of the Institute of the Far East of the Russian Academy of Sciences

- His idea is that the situation from the military-technical perspective changed quite bit as there is now a wide availability of high-precision short- and medium-range weapons, including ballistic, cruise, and hypersonic missiles, as well as the UAVs. At the same time, the level of contradiction between Russia and the West (he calls it between major powers) is equivalent to that of the early Cold War years. Russia is involved in the hybrid war with NATO, while United States is deploying short- and medium-range (and in the future hypersonic) missiles in Europe. In these dangerous circumstances, he argues, the doctrine has to be very specific and account for the potential conflict between Russia and NATO, including the Ukrainian issue.

So he proposes that the threshold for nuclear use should be lowered and the following should be added to the existing doctrine:
1) nuclear weapons can be used in the event of a naval blockade of Russia or a Russian region (Kaliningrad);
2) nuclear weapons will be used (note the choice of “will be used” here) in case of an attack on nuclear energy infrastructure or other hazardous industries, in the event of serious contamination of the area;
3) in response of an attempt to eliminate political leadership of Russia;
4) in response to a large-scale attack with conventional weapons on Russian populated areas (basically includes everywhere where people live, ie villages, towns, cities) and infrastructure.

I am assuming that “will be used” also applies to 3) and 4).

Nothing to do with the doctrine, but he also reiterates that it is imperative to abandon the initiative of 1991 to deploy nuclear weapons in central storage facilities, and urgently start production and deployment of short- and medium-range missile systems.

Vasily Lata
Chief Researcher of the Military Academy of Strategic Missile Forces, retired Lieutenant General, Board Member of the PIR Center

- He says he had limited participation in the development of the current doctrine, where amid disagreements between the MoD and Minister of Foreign Affairs, MoFA’s soft version was adopted, where Russia would not use the nukes first. The idea, according to him, was that all disagreements would be sorted diplomatically. Later they added “existential threat” to the doctrine. Despite the soft version, he says, the purpose of nuclear weapons is deterrence.

However, in his opinion, the rules of international relations have changed and keep changing, and not for the better. The Western elites and political leadership, as well as their satellites, have lost the sense of fear and the thresholds agreed earlier are forgotten and no longer working. Thus, he is suggesting to define new thresholds of when the nuclear weapons will be used without any ambiguity. Russia should also abandon the “non-use of nuclear weapons first” and gradually increase the nuclear readiness and then inflict “demonstration and de-escalations strikes” with tactical and strategic nuclear weapons in a situation where there is infringement on Russian national interests and state security.

Now that is a little nutty (that’s from me, lol, not from the guy, in case it isn’t clear).

Sergey Rogov
Scientific Director of the Institute of the United States and Canada of the Russian Academy of Sciences, Academician of the Russian Academy of Sciences, Member of the Russian Council for International Affairs

- Along the same line of some previous comments, the current doctrine had served its purpose well, but the situation is now different. He says that the United States has set the goal to defeat both Russia and China, which is a departure from the recognition that there could be no winners in a nuclear conflict. Some words about the new US doctrine, which isn’t published, but includes the possibility of use of tactical nuclear weapons in the regions where NATO doesn’t have overwhelming numerical superiority over conventional Russian Forces (ie, Baltic States), as well as previously mentioned recognition of deployment of the American missiles in Germany that can reach European parts of Russia. He also talks about the threat to St Petersburg and Murmansk posed by the accession of Finland into the ranks of NATO and mentions the Ukrainian strikes on the Russian airfields with strategic bombers and early detection radars, threats to Zaporozhie and Kursk nuclear power plants.

Having said that, he considers it would be wrong for Russia to reserve the right to preemptively strike first, but some specific formulations and measures that would demonstrate that Russia can react to such threats must be taken. He didn’t specify further.

Dmitry Trenin
Professor-researcher of the National Research University "Higher School of Economics", leading researcher of the Center for International Security of the National Research Institute of World Economy and International Relations named after E. M. Primakov of the Russian Academy of Sciences

- A proxy war of the collective west with and an attempt to inflict a “strategic defeat” to Russia, using Ukraine as tool, is forcing Russia to adjust its nuclear doctrine. He thinks that the following would be the most urgent and important changes:
1) the current threshold of use of nuclear weapons (existential threat) is too high and should be reduced to ‘threat to most important strategic interests of Russia”;
2) it should be made clear that Russia is willing to use nukes in the circumstances described above;
3) since NATO is a nuclear alliance and considering the collective nature of the threat created by the West, he would advise to provide for a possibility of nuclear strike on a non-nuclear NATO state.

Trenin is obviously an all out nuts, but those who follow are probably aware.


Lately, I saw the discussion of this subject taking place and today saw a few people talking about this particular article. Thought some here would be interested and I would provide some context and a bit more detailed summary, which I think is beneficial. Of course, this has nothing to do with the practical changes to the doctrine, but it surely shows different points of view and where the wind blows.
 

KipPotapych

Well-Known Member
Not sure this is the right place for this piece of news, but I’ll put it here.

Durov, the guy behind Telegram, was arrested in France upon arrival in his private jet. No details as to why yet.

In continuation of Durov’s arrest, a couple of articles on the subject, for those interested.

One is from Politico outlining details of investigation, arrest, and whatnot. It’s a good read.


Second is from CEPA that (briefly) discusses Durov’s history and social media in general. Also a good read.


I feel like this goes beyond the topic of this thread, but I am not sure where else to post it.
 

KipPotapych

Well-Known Member
As promised in the RU-UA War thread a few days ago, a little more on the Russian nuclear doctrine.

A couple of posts above, I posted a few Russian expert opinions on the subject from a Kommersant article. Since then, Kommersant posted another rather wide interview with another Russian expert, who is one of the hawks (read a nut), but has more influence than any of the people in the previous article (perhaps why an interview instead of brief opinion). This man is Sergey Karaganov.


People can read the entire article via google translate, but I will outline his ideas in my own words and direct quotes.

Sergey Karaganov
A well-known political scientist, honorary chairman of the Presidium of the Council on Foreign and Defense Policy, scientific director of the Faculty of World Economy and World Politics of the Higher School of Economics. Chairman of the Editorial Board of the journal "Russia in Global Politics".

- He doesn’t know what wording will be included in the amended doctrine, but he surely can make some suggestions. First, however, he comments on the current doctrine.
- The current doctrine is completely irresponsible. It reeks of the 60-70s. It practically excludes the most powerful argument in Russia’s military and foreign policy arsenal. He thinks it is not only wrong, but also immoral in the highest degree. Millions of people have died in days past for this political instrument, the nuclear shield. It is rather a history of great heroism and selflessness during the war, hunger, etc. But, he thinks, Russia had suddenly decided to forget about all that.
- Now is the time to declare that Russia will respond with a nuclear strike to any massive attacks/strikes on its territory.
- At the same time, there should be introduced a concept of “nuclear escalation” - basically, steps that would precede the nuclear strike to convince the potential or real enemy that Russia is ready to use nuclear weapons.
- The idea at core is that the doctrine should clearly reflect to all current and future opponents that Russia will use the nuclear arsenal at their disposal.
- Not only it is Russia’s responsibility to their citizens, who are currently dying at the frontline and civilians who are killed in peaceful cities, but to the entire world.
- If the nuclear deterrence is not reactivated, the world will drown in wars, which will undoubtedly lead to the use of nuclear weapons and the WW3.
- In order to avoid that, the nuclear factor must be intensified to convince Russia’s opponents that nuclear weapons will be used in any encroachment on Russian territory and citizens. He says that he “really contributed to such changes”.
- When asked why he thinks the current doctrine is outdated if the latest additions to it were signed only 4 years ago, he says that it is based on postulates, some of which weren’t Russian to begin with, from the last century. He also greatly blames himself for not expressing his great outrage publicly when the new document was revealed, but only expressing his opinion to a small circle of experts.
- Currently, it is anything but a doctrine: it is based on the illusions from the last century, a natural rejection of nuclear weapons. That is, however, understandable because of the human nature - who would want to use nuclear weapons?
- The interviewer here says that she hopes no one, to which he replies he more than understands that.
- The problem is that pacifists live because others fight for them and currently there are tens of thousand fighting for them and dying in the fields and if this continues, this dying will turn to the cities as well because the war will inevitably grow.
- Russia will continue draining itself on the so-called line of contact, spending gigantic resources, while competing with “half a hundred” countries whose economies are superior to Russia’s. Both, the former and the latter (draining and competing), will lead the country, that finally reached a certain level of prosperity and comfort, to a decline and possibly disintegration.
- Question is asked about the practical significance of the amendments to the doctrine and she mentions that the doctrine of 2010 had two scenarios for use of nuclear weapons, while amendments of 2020 brought it up to four.
- Karaganov says it will oblige their military to prepare for nuclear strikes. The “existential threat to the state” is too “ephemeral” of a scenario to even talk about it, a mockery of common sense.
- The current doctrine does not serve the function of deterrent and prevents the use of other very useful functions of the nuclear arsenal.
- Russia brought the matter to the point where the opponent is convinced that there are almost no circumstances that will trigger use of nuclear weapons.
- When talks of “tightening” the nuclear doctrine began about 1.5 years ago (in which he says he actively participated), there was a bit of reckoning in the west and talks of the need to avoid nuclear escalation at any cost.
- Europeans have completely lost their minds and forgot what war is, the Americans began treading much more carefully.
- The West is promoting the idea that Russia is not supported by the majority of the world, but China and other countries understand the logic behind Russia’s actions, including the motives behind amending its nuclear doctrine.
- Predictions and statements by the West about the countries from the world majority turning away from Russia due to tightening its nuclear doctrine is just an anecdote, psychological warfare.
- The interviewer says that Chinese were pretty clear in their statements that nuclear weapons should not be used and nuclear war should not be started.
- Karaganov says he somewhat understands this official position because strengthening the nuclear deterrence would not be in their interest because China is still weaker in this area.
- Statements signed by the “Nuclear Five” in 2022, about no winners in nuclear war and that it cannot be unleashed, are nothing more than some kind of intellectual mistake.
- From there it follows that any other type of war can be unleashed and they can destroy each other with any other weapons available to them, which is nonsense because then it was believed that there could be no war between nuclear powers.
- Today, nuclear NATO, led by the United States, is in full out war with Russia, using Ukrainian meat and if this madness doesn’t stop, they will start feeding others into the grinder.
- Nuclear weapons are first and foremost the weapons of peace and prevention of war.
- Russia was forced to adopt the current doctrine in the 90s, which paved the road for nonnuclear aggression around the world.
- It opened the road to NATO expansion because Russia has completely abandoned the nuclear factor as an instrument of the foreign policy, which was a crime.
- The interviewer says that in the statements of the “Nuclear Five” of Jan 3, 2022, they specifically stressed that confrontation of any kind between the nuclear states is not allowed.
- Karaganov agrees and says that this is a step in the right direction; however, Russia didn’t abandon its previous commitment (from the doctrine), which not only carries a pacifist message, but also unties the hands of other countries, whose arsenal of conventional weapons and economic might increases their chances of winning in interstate confrontation.
- The United States always was and always will be to use nuclear weapons first.
- While use of nuclear of weapons would lead to many innocent deaths, you have to convince your opponent that you are ready to use these weapons.
- Limited use of nuclear weapons will not lead to a total apocalypse and every country has plans of such “dosed” use in certain scenarios.
- United States always lied and continues to lie that their nuclear guarantees extend to its allies.
- It’s important to strengthen nuclear doctrine and Russian leadership needs to clearly state that they are ready to use nuclear weapons against NATO countries that support aggression in Ukraine.
- The list of such countries should be compiled by those responsible for such decisions.
- Burns (CIA) is a smart man but he (and the US) is bluffing when talking about the destructive strike with conventional weapons on the Russian forces in and around Ukraine if Russia uses nuclear weapons.
- If that were to happen, Russia would reserve the right for another strike, but on a much larger number of targets through out Europe.
- If they continue the escalation, Russia will be striking American bases in Nato countries and around the world, killing hundreds of thousands of American troops.
- The total war is not going to happen if they will know that Russia will use nuclear weapons.
- Russian opponents need to know this decision will be made by the president because this is his obligation before Russia, world, God.
- It has to be understood that it is the war of annihilation that they are waging against Russia and they won’t stop until Russia is completely demolished.
- The interviewer here says that she doesn’t understand why would Russia put itself in a corner (ie, inevitable use of nukes).
- Any nuclear strike has to preceded by a warning strike with conventional weapons.
- Next thing that Russia should do is strike targets in NATO countries that play a significant role in supplying Kiev regime and if that doesn’t stop them, we should go further (massive nuclear strike against the targets in Europe).
- The interviewer asks about the guarantees that both sides would stop at some moment and prevent destruction of the planet.
- To that, Karaganov says: “There are guarantees at Rossgosstrah (government insurance agency), as you know. What I can guarantee to you is that if we do not reactivate our nuclear deterrence, we are not going to escape humanity’s self destruction, but we could be the first ones to go”.
 

KipPotapych

Well-Known Member
Grigory Berdennikov
Expert of the Center for Energy and Security, former Deputy Minister of Foreign Affairs of the Russian Federation, who oversaw non-proliferation and arms control issues, former Permanent Representative of the Russian Federation to the Conference on Disarmament in Geneva and international organizations in Vienna

- This guy clearly had done some extensive work in the area. He thinks that in the current situation it would not be appropriate to have stricter restrictions than the Russian opponents have. He stresses, however, that there should be no obligation for the state to use nuclear weapons in any situation. In other words, the decision has to be made by the competent people, the highest power.

Furthermore, he is suggesting that Russia should align their nuclear doctrine with the agreements reached in 1995 (between Russia, USA, Great Britain, France, and China) where Russia agreed not to use nuclear weapons against nonnuclear states, unless those states attack Russia and are supported by another nuclear state. Here is drawing a parallel between Ukraine that is supported by the US (of course, France and the UK as well) and is currently attacking Russian territory. He suggests that drone attack on Kremlin and Kursk incursion would clearly fall under these circumstances. He further suggests that since this clause had already been agreed upon previously, the United States, UK, and France would have limited ability to criticize Russia for such a change.
After the Security Council meeting in Russia today, it appears that this ^ guy was the closest to the feel of the upcoming changes to the nuclear doctrine. Putin, via Google translate:

What else I would like to draw your attention to. In the updated version of the document, aggression against Russia by any non-nuclear state, but with the participation or support of a nuclear state, is proposed to be considered as their joint attack on the Russian Federation.

The conditions for Russia's transition to the use of nuclear weapons are also clearly fixed. We will consider this possibility already after receiving reliable information about the massive launch of the means of aerospace attack and their crossing of our state border. I mean strategic and tactical aircraft, cruise missiles, drones, hypersonic and other aircraft.

We reserve the right to use nuclear weapons in case of aggression against Russia and Belarus as a member of the Union State. All these issues have been agreed with the Belarusian side and the President of Belarus. Including if the enemy, using conventional weapons, poses a critical threat to our sovereignty.


Source is Kremlin.ru: Новости ∙ Президент ∙ События ∙ Президент России

I am not sure we will see anything more concrete on the subject. As of now, however, they can use nukes in Ukraine with accordance to their nuclear doctrine as all of the conditions have officially been met.

Edit: I guess I should say at least Ukraine, as that much (or little?) is clear.
 
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Feanor

Super Moderator
Staff member
After the Security Council meeting in Russia today, it appears that this ^ guy was the closest to the feel of the upcoming changes to the nuclear doctrine. Putin, via Google translate:

What else I would like to draw your attention to. In the updated version of the document, aggression against Russia by any non-nuclear state, but with the participation or support of a nuclear state, is proposed to be considered as their joint attack on the Russian Federation.

The conditions for Russia's transition to the use of nuclear weapons are also clearly fixed. We will consider this possibility already after receiving reliable information about the massive launch of the means of aerospace attack and their crossing of our state border. I mean strategic and tactical aircraft, cruise missiles, drones, hypersonic and other aircraft.

We reserve the right to use nuclear weapons in case of aggression against Russia and Belarus as a member of the Union State. All these issues have been agreed with the Belarusian side and the President of Belarus. Including if the enemy, using conventional weapons, poses a critical threat to our sovereignty.


Source is Kremlin.ru: Новости ∙ Президент ∙ События ∙ Президент России

I am not sure we will see anything more concrete on the subject. As of now, however, they can use nukes in Ukraine with accordance to their nuclear doctrine as all of the conditions have officially been met.

Edit: I guess I should say at least Ukraine, as that much (or little?) is clear.
I think that this is a misleading conclusion. They could always use nukes in Ukraine if they wanted to. They didn't and I believe they don't. These clarifications are being made likely as a combination of signaling for foreign countries, and for public consumption.
 

PipeRain

New Member
I think that this is a misleading conclusion. They could always use nukes in Ukraine if they wanted to. They didn't and I believe they don't. These clarifications are being made likely as a combination of signaling for foreign countries, and for public consumption.
The change in doctrine makes a nuclear retaliation order legal in more situations within the MOD command and control.
 

Fredled

Active Member
BRICS and their future banking system

Ananda said:
The reality is not like that. Each country in theory control their own market. However the mechanics of markets interconnect are control by large markets. The Global South simply want to have alternatives market mechanics connectivity that's not under Western politicians intervention.
This "control" by "large market" or "the west" or the US is a little bit exagerated. The decision to sanction internationaly Russia and Iran was not that simple. It involved talks among several countries. It happened that for Russia, given the violence of the war, the consensus was easily reached. Even thought, we can see that these sanction can be circumvented.
There are not a lot of cases of political intervention on the markets.

Ananda said:
You seems contradicting your opinion. Remember I put my comment to answer your opinion that taking capital and profit out of Russia is difficult. Then again you agree for countries that still have market connections with Russian market will not have problem to take their capital and profit from Russia.
Yes, it's still possible to take capital out of Russia but your profits will vanish in the exchange rate. So, your are not taking profits out of Russia or very little. It's not worth the risk. There are African countries where the risk is smaller than in Russia and exchange rate and foreign transfer conditions similar or better than currently in Russia.

Ananda said:
If they are not anxious toward Western domination and political whims on the Market, then they will not have drive to find alternatives mechanism. Again what most Global South want is not discarding Western Market mechanics, but find alternatives to provide competition
They are not trying to build an alternative for this reason, but simply to trade more efficiently among each others. They don;t do it because they are in trouble with the US or their allies. Most of them don't have any problem with the US. India doesn't. China didn't until Trump started to bash them and until they supported Putin's invasion of Ukraine. Egypt doesn't. Brazil doesn't. South Africa doesn't. Arab emirates doesn't... They do it to increase efficiency and save cost.

It doesn't make sens to constantly buying USD every time somebody from India wants to buy something from Brazil, and somebody from Brazil wants to buy something from China and so on, when none of these buyers and sellers are ever trading with the US. This is not true only for the BRICS but for all the countries of the world. but the BRICS represent the largest economies and populations.

Of course when Iran and Russia are under sanction, they hope that an alternative will help them avoiding sanctions.
But building a banking system for that reason is not going to give good results.

In the case of the BRICS, it's said that sanction on Russia accelerates the creation of this alternative. I don't believe so. Russia is pushing for an acceleration. All the others, less so. In fact, it should be logical that the war started by Russia slows down the process because of increasing instability and changes in world politics. This war is more an embarrassement than an incentive. It's not true that the Global South is rallying around Russia because they are victims of Western/US tirany. They know that the reason why Russia is sanctioned is perfectly justified. And they would prefer to make business with countries at peace, not ruled by war criminals.

One reason is that they don't want to alter their relations with the West. In fact there is no solid separation or distinction between countries from the West, from the Global South or other denominations. These words are over simplification and don't match the reality. BRICS economies and those associated with them are still heavily trading with the so called West and many of them are openly allied with the US or European nations.

The other reason is that you don;t want to trust somebody who is a war criminal invading and bombing another country without any valid reason. You will think twice before being involved with them. Get oil at a steep discount thanks to Russia shooting themselves in the feet is one thing. Trusting them for banking interconnection is another thing.

Ananda said:
If Yuan dominate market prove to be more reliable then USD-Euro dominate market, then the demand to that market will come automatically. On other hand if Yuan market prove sucks, then other players will left it.

That's call market competition. Hope you are not afraid and sour with competition in market dominance.
Competition is generally a good thing because competitors are compelled to improve efficiency to win. SWIFT was, and still is, the most efficient system but they gained quasi monopoly and they are not trying a lot to improve efficiency. At a time, cryptos were thought to compete with traditional bank transfer systems, and it did so in certain cases, thought, at the end of the day, it didn't globally because they still rely on classic banks for the last stage of payments.

The BRICS, and Russia in particular, are exploring a token based transfer system using crypto technologies (called DLT in the article). It won't be crypto currencies that everybody could buy and sell on any popular platform as it's done with Bitcoin, but a token used intemally by the New Development Bank. This token would replace the dollar as intermediary currency.

One thing is immediately obvious: Each participant currency should be relatively stable and have a verified tangible value everybody agrees with. Ideally they would peg it to the common token currency.
This far from being obvious for most of the participants. And for Russia, the Rouble's stability has crumbled. It's real value as buying power is not known, it's not freely traded inside Russia, the financial solidity of the state of Russia is challenged and could be extremely volatile in the near future.

Had Russia not invaded Ukraine (or stopped short of total war), the Russia would be in a strong position to enter a BRICS dominated system. Ironically, Russia is pushing for its creation because of the very reason it's now in position of weakness to do so.

It should also be noted that this new system will be also used by Western nations. It won't divide the world into two. If they want to succeed they will have to accept as many members as possible.

More about it in this article from Nasdaq.com
 

Fredled

Active Member
Military expenditures:
Rob c said:
To think that the money just disappears or is wasted is very simplistic.
I want to make clear for everybody: I don't believe that military spending are useless or that the money spent into it disappears without returning into the economy.

What I tried to explain was that military productions (weapons, tanks, war ships, war plane, military bases, missiles etc) are not things that can be used by everybody, as it would be with roads, bridges, tunnels, commuter trains, high speed trains, water ways, ports, medical facilities, education facilities etc.

People who run businesses don;t care about how many tanks and missiles are stored in the military bases. They don't use them. But they do care whether the roads are good, the workers can easily go to the workplace by train or by car, have education, are in good health, whether their containers can be shipped in and out the country easily, trucks can drive to their factory plant, internet is fast, business trips are easy and so on. These are the things that help the economy.

KipPotapych said:
Without a doubt, it puts a lot of money back into the economy in Russia. Suppliers, tool manufacturers, “trickle down” effect, etc. It makes the economy boom, really.
The trickle down effect is only short term. It goes well as long as the spending goes. Once the spending stops, it stops there. Just like any other government spending that is not directly usable for economic activities.

The advantage of investments in things usable for economic activities which I listed above, is that they have the same trickle down effect on the economy as military spending would do and are material;y helping businesses.

KipPotapych said:
while spending more on the logistics, the development of these very logistics (arguably) led to more innovation, be it ship building, aviation, etc.
One positive point about military spending is when it's spend in Research and Development. New inventions are often benefiting the civilian industry. However this is done also with other spending. When the government wants to invest in a big projects, companies are developing civilian technologies directly for this project. While military spending provides sometimes unexpected new technologies, it's not an significant advantage over other spending.

Moreover, the opposite is also true: Civilian activities helps military development. That's why technologically developed countries have always superior military power.
The best and most recent example is the use of drone on the battlefield. Also the use of Starlink, which proved more effective than any other military communication devices.
During WW1, the mechanisation of military vehicles was possible thanks to the invention of the gasoline engine. A civilian invention. The first planes were created by private investors. It goes both ways.

If you can chose to spend into the military or something usable, something usable is always a better investment.
In the case of Russia, they had the choice. Russia wasn't treathened by any one. Putin decided to attack Ukraine wihout being obliged to. Just like Saddam didn't treathened the US, Ukraine didn't treathened Russia. Putin also chose to increase the size of the military deployment and military spending. All these military spending are could have been used elsewhere, where it could be more useful for the population and businesses.

The territorial gain operated thanks to these spending are not profitable. It would have much cheaper (without even talking moral considerations), on purely financial basis, to invest in Ukraine with legal means instead of trying to take land by force. It was not always the case throughout history. Yet, nowadays, this is a general rule.

In this respect, China is the symmetrical opposite of Russia: They take over entire spans of the US economy and other economies without firing a single shot. They are in control of a lot of mining sites in Africa. India buys land in Africa massively. Also without dispatching a single soldier. And they are the winners.

10 iconic American companies owned by Chinese investors

citizen.org said:
Chinese financial interests have acquired more than $120 billion of assets in the U.S. economy since 2002. Fifteen Chinese government entities (sovereign wealth funds and state-owned enterprises) and government-connected private sectors firms account for nearly 60 percent of this activity.
link

Moreover, the military action in Ukraine is making the situation for investors and businesses worse, much worse than during peace time. I will list the details below. Right now, it should be reminded that peace time is always better for the economy than war time despite what you can tell about the US or NZ thriving during WW2.

Rob c said:
As rather small obscure item, my country (NZ) entered WW2 almost broke due to the great depression. Due to the goods an services it provided to the allied powers it ended the war with one of the higher GDP's around even though over 35% of the budget was being spent on the military.
This is similar for the US. yet, it doesn't mean that it was thanks to huge military spending. Your country (if I'm correct) and the US has not been invaded or bombarded by the Axis. You didn't suffer destruction or sanctions.
This could have happened without the war as well. Everybody did better after the Great Depression than during it.

Now, as I said, the sudden massive spending in military or other things always helps the economy. It doesn't have to be military. The only fact that money sleeping in sovereign fund coffers suddenly used to hire people always helps the economy. That's what happens in Russia. That's why Russia can boast a 4% GDP growth. But it's only a short term effect. In the case of Russia the effect can last longer because their reserves were important and they benefit from oil and gold exports.
 

Fredled

Active Member
The state of the Russian economy
I said:
I didn't say the Russian economy collapsed by exactly 15%, I said it collapsed by way more than 15%. LOL.
Of course it's not an exact number.
I think that 15 to 20% in loss of petroleum revenues combined with increased spending caused by the war and other side effects caused by the same war is a reasonable estimate. Give or take increase or decrease in the oil price Russians manage to sell it at.
Domestic non-military production has also certainly decreased by that much if no more because all the state investments goes to the military.
Feanor said:
If you don't have evidence, then you need to retract the claim or explain how you arrived at that figure.
Feanor said:
Sure. Questioned, agreed. Collapsed? It's not wrong to express doubts about the state of the Russian economy. And Russia has problems. But there is a huge difference between "questionable" and "collapsed".
I explained, I think with enough details, why I believe so.
That being said, a lot of this discussion is about the word "collapse". I will not stick with this definition if you don't agree. After all it's subjective. You can also say that the Cuban economy has never collapsed. People still living there fine.

My point is that not everything is oky-dokky in Russia.
Here are official numbers to start with:
GDP
Inflation
Trade

Russia posted a very nice 4.5% and even 5.4% in 1st Q2024. However this is with an inflation of more or less 10%.
A growth of 5% with an inflation of 10% means a recession by 5%.
No matter how you cut it, this is the economic reality.

And this is based on official number provided by the Russian Finance Ministry. In Europe we had a 10% during the Covid crisis. I can tell you that the people felt a living cost increase much higher than that. This is normal and happens in every country: Official inflation figures are always well bellow felt inflation. The real, living cost inflation in Russia is believed to be rather 20% according to bloggers. I don't have much information from my personal contacts there but the little they say confirms it's quite high. Of course you will always find these informations in non pro Russian press like the BBC (random link, to illustrate).

Jaykaro said:
1. Your economy is overheated; inflation is entering double digits this year. Despite all the Central Bank’s interest rate hikes from 7% at the beginning of the year to 19% by the end, inflation is only slightly slowing down but still continues to rise.
This is a strong indication that inflation is much higher than offcially stated.
Interest rates at 7% was already extremely high for a western like economy. 19% is more of like for emerging economy, except that emerging suggest an improvement in process while in Russia's case it's degradation.
They would not rise interest rates to 19% if inflation was not at least 20%.

The GDP growth is also slightly inflated. Thought this growth is logical given the sovereign reserve fund being depleted by the same amount.
It also should be kept in mind that these numbers are in Roubles. We can't estimate a dollar equivalent any more.

Ironically however, the foreign trade balance is still counted in USD. This balance is positive at $9B. Only the salaries of the soldiers deployed in Ukraine or on the border with Ukraine is $18B a year. ($2500*600K*12 = $18 000 000 000). Just these salaries are defeating the trade surplus, caving a deficit of $9B, assuming Putin counts on oil export to finance his war. Then add all other expense in military equipment and stuff.

Jaykaro said:
In 2023, to cover the uncovered deficit of 2.9 trillion roubles by the end of the year, the Bank of Moscow sold 114.95 billion yuan and 232.6 tons of gold (which were supposedly "discovered" by the National Welfare Fund in the Bank of Moscow
Selling Yuans is logical as they are being paid in Yuan for their oil. They are also awash with Indian rupees and Arab dinars. Since they can use these currencies only in their corresponding countries, it's more barter than trade.

Selling gold is another story. 232 metric tonnes is not a small amount. It's 10% of their gold reserve.
Surprisingly, their gold reserves have increased since January 2023.
This increase is the continuation of gold purchase since 2002. In 20 years their reserves have doubled and the trend didn't stop despite the war.
It should be noted that Russia produce over 300 tonnes of gold per year. 310 tonnes in 2023. This is more than they are spending. When statistics say gold purchase, it's purchased domestically, not imported, one part being exported. China is the primary gold buyer from Russia. Gold is as important, if not more, than oil to finance the war and stay afloat.

It should be noted that gold reserves in USD reflects also the rise in gold price during this time. The numbers in $ are important in term of capacity to import while the number in tonnes reflects the material increase of the reserves.
 
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seaspear

Well-Known Member
There is also gold sent to Russia from Africa to help fund the Russian war,certainly countries like the Sudan ,Central African Republic and Mali have lost gold and diamonds through Wagner type mercenaries whp prop up non democratic leaders at expense of the citizens of these countries
 

Ananda

The Bunker Group
This "control" by "large market" or "the west" or the US is a little bit exagerated. The decision to sanction internationaly Russia and Iran was not that simple. It involved talks among several countries
Under present situation the market do being controlled unevenly by US and Western players. It is the fact of the market, and not exaggerating. If you are market players, you know this is the truth.

They are not trying to build an alternative for this reason, but simply to trade more efficiently among each others
If the only the matter of costs, then they will use USD dominated market. It is the most liquid market with deepest financial instruments choices. It is still best solutions for global trade. So your argument on efficiency is moot. There are something else that drive them to find alternatives.


You can hear some of the arguments on why BRICS exists more and more on this interview. Off course you can argue with this Economic Professor, as having negative bias toward US and Western powers. However he try to shown non US and West perspective as an American Professor.

it's still possible to take capital out of Russia but your profits will vanish in the exchange rate
Not if you are Indian or Chinese, the Yuan and some extent Rupee are more favorable rate to Rubel because Russian mostly used Shanghai and some extent Mumbai market. So much so that Russian begin trading with Gold especially with Dubai market, so they can also have alternativeson trade asside Yuan and Rupee. Their Gold reserve is accumulated not only by their production but also their trade.

This your problem, you only see on Western perspective. That's why you keep saying Rubel is worthless etc. Off course it is worthless for Western Market, because Russian not Trading with Western Market anymore. So your argument is right only from western players. However it is moot as Russian and West has less and less trading anymore.

As for BRICS or Global South perspective, again let me put in points that you keep missing or won't accept and then keep back to your Western perspective argument:
  1. They are looking for Alternative payment systems or Market exchange outside Western dominate market, because they are fell vulnerable. Their trust to Western politicians eroding when Western politicians weaponise the market toward Russia.
  2. When they see how the market being used for political weapon toward Russia, then most of them say, if they don't mind to use that against Russia, then they Will definitely use that agains us, if one day we are not in their Political agreement.
  3. They are by no mean follow Russia or symphetise with Russia. Most of them don't support Russian possition, but also most of them also don't want to sided with West. So most of them only want to stay in fences.
  4. So they will always going to be trade with West, using Western dominate market, but they are also going want alternatives that's not control by West.
  5. Western pundits say the alternatives will not be dominated by US but will be dominated by China. Well that's reality of market players now, bur it is alternatives anyway. They just want to have alternatives choices that perhaps more in line with Global South agenda.
As long as you only see on Western perspective, then you will always going back to your arguments. Then you will never understand the real motives for those global south players on finding alternatives. Again it is not cost and efficiency, cause the present Western dominated market still the most efficient market. I know it because I make living on that Western dominated market, even as non Westerners. It is something else, that I keep reminding above. Mind you that's the opinion that also shares by many big western banks. Which's why they keep reminding the politicians to stay away from Market mechanics.
 

swerve

Super Moderator
The state of the Russian economy

My point is that not everything is oky-dokky in Russia.
Here are official numbers to start with:
GDP
Inflation
Trade

Russia posted a very nice 4.5% and even 5.4% in 1st Q2024. However this is with an inflation of more or less 10%.
A growth of 5% with an inflation of 10% means a recession by 5%.
No matter how you cut it, this is the economic reality.
GDP growth figures are conventionally given in real terms. not nominal. That is, inflation has already been deducted.

That doesn't mean Russia's official growth figures are accurate. I expect that Rosstat calculates them as well as it can (& its staff are highly competent & respected by foreign statistical offices), but political interference may lead to them being massaged before publication, as was done with covid-19 numbers in 2020.

To illustrate how Russian official statistics can be manipulated for political reasons, someone senior (a deputy minister? I forget) in the health ministry let slip the ministry's internal estimate of covid-19 deaths to date late in 2020, & it was far more than the published figure, IIRC about three times. She may have lost her job. I think that in that case, the official number only counted deaths where the death certificate said covid-19 with no other cause, & there was pressure on doctors by local officials to put additional causes on certificates, or leave off covid altogether. That led to such interesting things as Dagestan having a massive epidemic of pneumonia with no known cause, & very few deaths from Covid-19. Note that pneumonia is a common symptom of covid-19. ;)
 

John Fedup

The Bunker Group
GDP growth figures are conventionally given in real terms. not nominal. That is. inflation has already been deducted.

That doesn't mean Russia's official growth figures are accurate. I expect that Rosstat calculates them as well as it can, but political interference may lead to them being massaged before publication, as was done with covid-19 numbers in 2020.

To illustrate how Russian official statistics can be manipulated for political reasons, someone senior (a deputy minister? I forget) in the health ministry let slip the ministry's internal estimate of covid-19 deaths to date late in 2020, & it was far more than the published figure, IIRC about three times. She may have lost her job. I think that in that case, the official number only counted deaths where the death certificate said covid-19 with no other cause, & there was pressure on doctors by local officials to put additional causes on certificates, or leave off covid altogether. That led to such interesting things as Dagestan having a massive epidemic of pneumonia with no known cause. Note that pneumonia is a common symptom of covid-19. ;)
The slip resulting in a job loss,…better alternative than Putin’s Po-210 cocktail.;)
 

Feanor

Super Moderator
Staff member
The slip resulting in a job loss,…better alternative than Putin’s Po-210 cocktail.;)
It's Russia. Why would you need to use complex poisons domestically? You can always set up a car accident. Or arrest them on trumped up charges and then they have an accident in jail while awaiting trial. If you really want someone gone there are ways to do it. But on the other hand it's often not necessary. You don't want to put people into a position where the smallest thing instantly results in maximum consequences because it leads to problems. You want escalating or progressive consequences. You can see that with how Russia handles political dissidents. Navalniy spent many years before he got himself into the predicament above, dead in prison. You can protest in Russia and often there will be no consequences for it at all if the government doesn't care, especially if the protest is small enough. You can get arrested for protesting and end up sentenced to 15 days of community service. And this sounds extremely mild as a punishment, but how happy will your employer be to give you 2 weeks off? What about the second time it happens? You can ruin someones life pretty thoroughly with relatively low level criminal and administrative sanctions. At the same time it doesn't galvanize the public or anger their friends and relatives nearly as much. If you execute protesters, all their friends and family will hate you. But if you give them 15 days of community service, and after the second such stint their employer fires them, many of their friends and family will tell them it's their own fault for supporting Yabloko and being one of those weird activists, wasting time protesting that could be better spent drinking vodka on a fishing trip. Sometimes simmer is better then boil.
 

seaspear

Well-Known Member
This is one of those "Western sources" of information that have been dismissed ,this author does seem to rely on statistics for his claims
 

Fredled

Active Member
Feanor said:
You can protest in Russia and often there will be no consequences for it at all if the government doesn't care
It's true. In Russia, they care only of what may have consequences or if it's seen as western agent agitation.
In fact the number of jailed dissidents, journalists, agitators relatively small for a dictature.

I found this article at random, on a search engine saying that, currently, there are at least 768 political prisoners serving time in Russia.
According to another website, 330 journalist are held in captivity in Russia.
Not clear if jailed journalists are included in the political prisoners count. Anyway, it's not the 4 or 5 digit numbers that were found in other dictatures like Saddan's Iraq or Iran.
The number of political executions is also very small, even extremely small. One or two per year. At least for the cases that we know. There is not mass liquidation of political opponents.

One of the reason is that there is very little active political opposition. Russians are very careful about not to mess with the leadership. On the one hand, they don't want to take the risk to get into troubles, on the other hand, they don;t believe that it's helpful to protest against the government. They don't believe that political activism can change anything in Russia.

There is also no ethnic or religious clash like in Muslim countries and in Myanmar. Last time it happened in Russia was during the Chechen wars.

Also 30% of the Russian population is retired or at least receive a pension.
_____________________

Ananda said:
When they see how the market being used for political weapon toward Russia, then most of them say, if they don't mind to use that against Russia, then they Will definitely use that again us,
No. They are not thinking like that because they are abiding by the UN Charter and international agreements which, among other things, defines when sanctions are justified or not.

In this case Russia is entirely responsible for the consequences of their breach of the UN Charter and of the Budapest Memorandum by invading Ukraine. It's not the West who did it, It's Russia.

Ananda said:
As long as you only see on Western perspective, then you will always going back to your arguments.
I don't believe that the notion of The West or Western is still relevant today as far as markets are concerned. The term The West referred to the non-muslim world at the time of al-Qaida and ISIS. Now it refers to those who are allied with Ukraine. Outside this, the term is irrelevant.

I strongly disagree that there is anything like The West or The Global South that can be defined in market term or in business terms or in banking terms or even in a general political terms.
It was true 50 years ago when 2/3 of the world was under developed. It's not true anymore.

If you think that there is a mystical entity called The West controlling the markets with its invisible power, please explain to me how it does so. Which mechanisms does it uses, and examples of what it did.

Ananda said:
Again it is not cost and efficiency, cause the present Western dominated market still the most efficient market.
Yes. And that's precisely the reason why the BRICS haven't created their alternative to the dollar yet. The dollar is still the most convenient and cheapest way for most of them to trade among each other.
The Bitcoin offered another alternative, but it was more efficient only in countries with deficient banking system.

It doesn't mean that a more efficient system doesn't exist. Trading in dollars when you are not trading with the US is not efficient. In many cases it's absurdity.

Creating a new international banking system require trusting each others. If they didn't trust the West that bad, they would have done their alternative way. The facts show that they don't trust each others better than they trust the US. Especialy Russia. Chinese are usualy honest. They respect their word. I don't know about India and Brazil but I never heard anything bad about them. But Russia? If they can't even respect the UN Charter which is fundamental for global stability, how can you trust them with bank deals?
 

Feanor

Super Moderator
Staff member
Since this is all over Russian sites on the internet, I figured I'd share here. Russia's collapsing economy is doing so poorly that the IMF has noted it shrinking to 4th place (from 6th pre-war) in GDP PPP. Not sure what this says about alternative currency routes or the effectiveness of western sanctions.

If anyone is confused, yes that's sarcasm.

 
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