By Nadia Schwarz
At the beginning of August the World Bank, which is notoriously unsympathetic to Putin´s Russia, announced that by the end of 2022, the Russian Federation was ranked as the fifth strongest economic power in the world. This ranking is based on such indexes as GDP and purchasing power parity, i.e. on the economic volume calculated taking into account the difference in prices of goods and services. For the second consecutive year, Russia has overtaken Germany, albeit by the narrowest of margins.
It would not have been so surprising if the World Bank had not predicted last spring that the Russian economy would shrink by 11.2 percent due to Western sanctions. However, despite the embargoes, GDP did temporarily fall by 2.1 percent, but it has since returned to growth by 2023, a growth rate that has led the IMF to revise its forecast for the third time, with the result that its projections have risen.
According to the latest data published by the IMF, the Russian GDP is expected to grow by the end of the year by 1.5%, which is in line with the assessment of President Putin who promised the Russian people a growth of 1.5-2% last May. It is worth noting that Germany, the sixth largest global economy, is predicted to be in a recession by the IMF, which is already underway according to the Federal Statistical Office’s data.
The strategy of imposing sanctions to cripple a national economy is not novel. Consider the cases of Cuba, Venezuela, North Korea, Iran, and several other nations that have endured significant economic losses. In response, some have accepted “democratic” coups d’état inspired by the United States, while others have attempted to survive with the economic noose around their necks.
On the other hand, some countries have developed a self-sustaining economy that safeguards national interests and seeks ties with nations outside the Western bloc. This is the path Russia and its political leader are following.
Let’s analyze the measures and solutions that have allowed Russia, a “gas country that will soon be torn apart by sanctions”, according to Barack Obama, to survive in spite of these numerous sanctions imposed by the West.
Russia is known first and foremost for its production of natural gas, oil, and related products.
Originally, most of the exported gas traveled through Ukrainian territory. However, due to political tension, the Russians constructed two gas pipelines: one through Turkey and another that goes directly to China, rather than to Europe. This latter pipeline enabled the country to redirect gas sales after the explosions of both northern pipelines. In recent years, numerous liquefaction plants have been constructed on Russian territory, providing liquid natural gas to various nations, such as Spain.
According to the data of the Vortexa analysis company, only one month after the implementation of the embargo, 91% of the Russian oil was diverted from Europe to other countries such as India, China, Brazil and Turkey. The role played by Saudi Arabia is noteworthy. As the leader of OPEC, it supported Russia in restricting oil production while ignoring the demands of Washington, its old and loyal partner.
Other sectors of the economy that keep the country afloat include agriculture and the production of chemical fertilizers. The production of chemical fertilizers is crucial for European farmers, who are facing a crisis without them. Russia is currently the world’s largest exporter of grain, a fact even the U.S. Department of Agriculture acknowledges.
The battlefield picture is no different: data from Ukraine’s military agencies and those of the West only confirm the strength of Russia’s war industry. Even after a year and a half from the start of the conflict, the Russian army still outguns and outperforms Ukrainian troops, who receive armaments from NATO. It is clear that a defense with comparable traits is not created overnight, but is the outcome of years of labor and substantial financial resources.
In regards to the media battle, if we examine the current global trends and recognize that the world is not solely made up of the Western countries, we can observe that Russia is gaining more and more supporters in the ideological realm. The Russia-Africa summit was recently held, attended by 49 delegations from 54 independent states of the African continent. Despite the traditional pressure exerted by the European Union and the USA, this event exemplifies successful international cooperation without American involvement. The BRICS group is another example of this, with 31 additional countries currently planning to join. The group is developing strategies to establish its own currency and make substantial investments in infrastructure projects.