Tyranny is an economic disaster
Vladimir Putin heads a third-rate economy rendered so by the gangsterism of his leadership and the wastefulness and lack of innovation created by his monopolization of key industries, especially oil and natural gas.
His oil-and-gas economic salvation was to be application of advanced western technology to Russia’s drilling and production operations. However, the sanctions imposed by the U.S. and other western nations after his invasion of Crimea and other portions of eastern Ukraine put an end to his access to that technology.
Putin’s Russia suffers from what Rachel Maddow in her new book, “Blowout,” terms the “Resource Curse.” On the good news side, with plentiful natural resources and especially oil and natural gas, a country can receive enormous bounty from their extraction that could be used for purposes of economic development and bettering its people’s lives.
The bad news is the curse: What regularly happens is that the resulting enormous inflows of cash corrupt the country and its leadership as oligarchs run the extraction industries and funnel bribes to government officials for resource rights — bribes that continue as extraction proceeds and sap that resource bounty. The result denies everyone but the corrupt few benefits that should be the people’s generally.
Putin’s Russia is a prime example. When the Soviet Union collapsed in the late 1980s, Russia could have moved in a very different direction. Russia has the largest land mass of any country and among the largest oil and natural gas reserves in the world. If the hoped-for advent of the rule of law had superseded Communist corruption and waste, the foundation could have been laid for a prosperous economy lifting Russia’s entire population and turning Russia into a developed nation instead of its unnecessarily economically backward status now.
And Russia today is truly a mess. Its 145 million inhabitants live in “an economy considerably smaller than Italy’s.” The World Health Organization reports that “life expectancy of a 15-year-old male is three years lower in Russia than in Haiti.” Death from cardiovascular disease among Russian women is five times greater than in western Europe. Maddow quotes Professor Karen Dawisha’s 2014 book, “Putin’s Kleptocracy” — “The inability of well-trained young graduates to succeed as entrepreneurs and innovators in Russia has stimulated emigration. … They have nowhere to go, nothing to do, and nothing to hope for.”
According to Dawisha, “Despite receiving $1.6 trillion from oil and gas exports from 2000 to 2011, Russia was not able to build a single multi-lane highway during that time. There is still no interstate highway linking Moscow to the Far East.” Maddow adds that “Russia’s premier natural gas company, Gazprom, has earned a reputation as ‘the worst-managed company on the planet.’” Russia’s principal oil company, Rosneft, got huge by forced takeover of often efficient competitors within Russia whose performance plummeted under Rosneft’s control.
Western nations’ sanctions deny Rosneft and Gazprom access to the high-end western (and especially U.S.) technology that Russia is unable to innovate itself because so much of its resources are drained off by the oligarchs — with much transferred by them to Putin, of course, making him “likely the richest man on earth.” And those oligarchs better follow Putin’s directions or they will suffer the same fate as some of their colleagues: poisoned, murdered, or convicted of criminal offenses (like the very bribery of government officials that Putin himself requires of them!)
So what’s left to Putin? Try to draw down the rest of the world to his level. Sow domestic discord in western nations and especially the U.S. by low-cost but very effective social media campaigns under fictitious names and titles that appear to be domestic but are churned out by disinformation factories run by Russian intelligence operatives. Invade neighboring countries, especially those rich in oil and gas like Ukraine, and steal their resources while enslaving their people. See how much he can get away with in Ukraine before he targets for takeover other countries that once were part of the Soviet Union or were trapped behind the Iron Curtain before the Soviet Union fell.
What can we do about all of this to protect ourselves? Understand how Putin works. Know that he specializes in lies and disinformation. Appreciate that all he knows is theft and gangsterism but that he is a master at both. Be alert as he tries to spread his tentacles around the world. Stand up to him and let other countries know that we will not let his form of corrupt and dysfunctional government become the new standard for the world.