In a quarter century or so, Russia’s going to be well on the way to Detroit status. Catastrophically low birth rate, the young emigrating in droves (including some that come here on student or work visas, overstay and seek asylum), and rampant alcoholism (men are dying on average 12 years earlier than women).
Her resource economy is one American decision and a few years away from collapse. Imagine what would happen to the price of oil and gas should America decide to really drill, baby, drill? Sure, it would take half a decade or more for that production to come on line, but when it did, either other producers would have to cut back to prop the price up (taking money out of their pockets), or prices would drop. Russia is the largest producer of oil in the world. Two thirds of Russia’s exports are oil and gas. Half of the Russian government’s revenue is from oil and gas. Russia’s governmental spending as a percentage of GDP is increasing, as she distributes more and more money to the people, involves herself more and more with the private sector, and spends more on its military.
Given what history tells us typically happens when internal economies tank (steal from the wealthy and productive by nationalizing companies and assets, and conquer neighboring nations for their resources), things could get rather ugly rather fast over there. Russia has already done both – nationalizing the oil/gas industry and invading part of Ukraine. What’s going to happen when the welfare state collapses from lack of productive workers and insufficient exports to sustain the aging and shrinking population? Will Russia go the way of Detroit and Greece, breaking promises to her citizens, or will Russia go the aggressive route, and seek to gobble up some of her neighbors? A nation with nuclear weapons and a long history of a large military swirling the drain is a scary proposition. Worse yet, a nation with an adult male population savaged by alcoholism and a younger generation desperate to escape is a recipe for eventual anarchy. Anarchy with nukes.
Much depends, I suspect, on how long Putin lives, who replaces him, and who the leaders of the United States and the major nations of Europe are at the time things hit the fan. For now, standing wary, not trusting them, not bargaining away advantages, and remaining aware of the ticking time bomb that is Russia, not Bush’s look into Putin’s soul, nor Obama’s “reset,” should be the order of business.
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