“Russia is now the world’s 4th largest economy” – World Bank

14 Jun

When going to war, even by proxy, underestimating your enemy can be catastrophic. One of its commonest causes is buying your own propaganda, yet the high stewards who run the West on behalf of its creditor oligarchs have done precisely that on two fronts.

First the military. For narrative management purposes it was necessary to misrepresent – in defiance of facts repeatedly laid out on this site and many others – Russia’s SMO as a land grab. That is understood; not for nothing do we say truth is war’s first casualty. But for senior politicians, generals and admirals to actually believe  the drivel put out for the masses; that  was just plain stupid:

… two factors led Western media and politicians to attribute goals to the Kremlin whose non achievement could be derided as defeats. One is falling for their own spin in taking Moscow’s declared aims of Kiev neutrality, self-determination in the east, and ‘denazification’ as cover stories for a land grab. The other is that NATO generals with no experience of fighting a peer adversary, even by proxy, misread at every turn what the Russians were doing. Since the second miscalculation boils down to mistaking a war of attrition for one of territorial conquest, the two are causally related.

Footnote to my December 2023 post, NATO/EU leaders fear US-Russia talks

A parallel underestimation, of Russia’s economy, has been no less catastrophic. 1 True, not every Western leader put it as crassly as the late and unlamented John “Maidan cookie” McCain did. Were he still drawing breath, would he man up and eat his words on “a gas station with nukes”? Highly unlikely. After all, Joe Biden – who does draw breath and with help can walk a few paces in a more or less straight line – has yet to publicly acknowledge that his promise to “reduce the rouble to rubble” was recklessness on steroids.

These kind of men just don’t do that kind of thing. But sooner or later selective amnesia and its attendant denial of reality exact a toll. And while McCain and Biden are easy targets, the one’s casual sneering and the other’s senile bravado reflect a hubris – an oafish, “we-won-the-cold-war-and-can-do-as-we-please”  exceptionalism at root orientalist – which runs wide and deep not just in the Beltway but among the West’s ruling elites at large.

That too is understood. Yet if we look to the work of the credit and debt specialist some hail as our greatest living economist, we’ll see a more specific driver of the West’s underestimation of Russia’s economic status. As I put it seven months on from February 24, 2022:

In the West’s hyper-financialised economies, GDP is a misleading indicator of wealth creation, hence of those economies’ strength relative to Russia’s.

Why read Michael Hudson? Part 3

And now it’s official. A World Bank which has acknowledged China’s lifting of close to a billion people (I’m extrapolating from a 2022 figure of 800 million) from extreme poverty announced last month that Russia’s economy has overtaken Japan’s to become – after China, the USA and India – the world’s fourth largest.

bne intellinews, June 4 2024

As Europe shivers and its businesses go under, or relocate to the USA, we see the extent of its leaders’ folly and betrayal of their peoples to please, as I put it three posts ago, “on the one hand their Washington handlers, on the other a creditor oligarchy”.

Declaring economic war on a $10tn economy 2 – because your “gas station with nukes”  thesis had armies of accountants thinking $2tn – ain’t not all that clever, is it? $2tn economies can be laid to waste by empire sanctions. Not a $10tn one. Least of all when it (a) has been driven by those same fools into ever closer ties with one of $30-40tn, and (b) is self sufficient in every arena of wealth creation – with the sole exception, a demographic time bomb of which the Kremlin is keenly aware, of manpower. 3

Over to Alexander Mercouris and Alex Christoforou. I see Alexander has taken to heart my tough-love chiding, in that three days ago post, of his tendency to the prolix. This excellent video comes in at a bantamweight 21:42.

The screenshot is of Elvira Nabiullina, Governor of Russia’s Central Bank

* * *

  1. True, no war is catastrophic for America’s military industrial complex, at least not in the short term. But even by its own metric, an MIC riding shotgun – some say it holds the reins – in America’s never-ending wars must now fear for its future as its eye-wateringly costly ‘state of the art’ weapons have so visibly underperformed in Ukraine.
  2. While the World Bank calculations show $6.5tn, not $10tn, Alexander argues that its methods still underrate Russia’s true economic size. That should surprise no-one given the WB’s nature as an instrument of the West’s now foundering ‘globalisation’ project. (See my 2017 post, Economics of imperialism, for how ‘globalisation’ brought the global south into ‘the value chain’ on the West’s terms. Capital-Labour relations described and analysed by Marx and Engels in 19th century England became, from the 1980s on, North-South relations. The conditionality of World Bank and IMF development loans played a key role – see Naomi Klein’s The Shock Doctrine – in making it happen.) But even $6.5tn points to a more than two-thirds undervaluation.
  3. At 144 million, Russia has a lower population than China’s 1.43bn, America’s 342 million or India’s 1.44bn. This makes her economic status – less dependent on energy exports (10-15% of PPP-adjusted GDP) than Western media and Cookie McCain would have us believe – all the more impressive. But it points too to a looming problem others – John Mearsheimer, Alexander Mercouris and crucially Vladimir Putin in his State of the Nation address a fortnight before his landslide re-election in March – have noted. In the video, Alexander sets out three options open to Russia. The easiest is to step up automation, in a country hardly short of investment funds. A second is to incentivise larger families, but that’s a twenty-five year project and has natural limiters. A third is immigration. The first two are underway but the third is, in any country, politically sensitive. Which is no doubt why the Kremlin seldom mentions it. Nevertheless, an obvious labour pool lies in Central Asia, though Russia’s defiance of the West has won it new admirers in the global south at large.

2 Replies to ““Russia is now the world’s 4th largest economy” – World Bank

  1. The US economy is also grossly overestimated, as much of it consists of financial services etc. A better comparison is iron and steel production.
    In 2023 –
    USA – 80.7 million tons (+0.2%)
    Russian Federation – 75.8 million tons (+5.6%)

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