Russia's Economy Continues Despite Of Sanctions

Red Square, Moscow © Reuters / Tatyana Makeyeva

Micahel Rubin, National Interest: Why Russia's Economy Is Headed for Trouble

A lack of real reforms and a hyper-dependence on oil has prevented the emergence of a healthy, diverse economy.

Vladimir Putin will soon begin his third decade at Russia’s helm. When he took the reins of power from Boris Yeltsin, Russia was a nascent democracy but was just emerging from years of economic recession. Putin, a former KGB officer, exuded strength. He ended the Chechen war decisively and with brutality. He presided over a surge in the Russian economy. After shrinking sometimes more than ten percent per year under Yeltsin, Putin shepherded the economy to ten percent growth in his first full year in power.

Putin simultaneously embarked upon a campaign to upgrade Russia’s aging and, in some cases, rusting arsenal. He played his diplomatic and military hands masterfully: seldom has a power which remained so weak on paper achieved so much in reality. Under Putin’s stewardship, Russia was like a poker player which repeatedly managed to force opponents with a full house if not a royal flush to fold in the face of his own pair of twos.

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WNU Editor: Russia's Minister of Economic Development is predicting a rough year .... Early 2019 to be challenging for Russian economy, says minister (TASS). But the trend lines show something different .... Sanctions? Russian economy to overtake Germany’s by 2020 – report (RT). As to what is my take. What I said last year still holds, but with onechange, and that is the trend of Russians owning a small business continues to grow (How Is The Russian Economy Doing? (March 16, 2018) ....

.... In Russia there is the economy .... and then there is the economy. Officially .... the stats show the Russian economy stagnating, purchasing power decreasing, and the standard of living going down. On the plus side .... inflation is 2% (which everyone in Russia is grateful for). There are no trillion dollar deficits. And more important .... everyone is working. What has helped is that low taxes and the development of a favourable environment for small businesses to grow has encouraged many people to start their own little enterprises. In 2013 (before sanctions) about 10% of the population had their own small business .... Money to be made for small businesses in Russia (Russia Beyond). I would put that number around 30% today, and it is growing. Of all the signs that I have found to be the most encouraging in Russia it is the development of this small entrepreneur class .... even the Communist Party is a strong supporter of this trend (at least that is what they say publicly).