Lawrence Person's BattleSwarm Blog
https://www.battleswarmblog.com/?p=50911Will the international community’s sanctions succeed in bringing Russia to heel? Completely cutting them off from the world banking system has the potential to do a lot more damage to Russian oligarchs than previously, but it’s important to remember that the Russian economy was already sucking.
https://www.youtube.com/watch?v=ZAMz5kgb7V4Some takeaways:
• Russia’s transition to a market economy was badly bungled, with state enterprises being sold off to those well-connected oligarchs rather than people that could actually grow and modernize industry.
• Foreign firms were largely excluded from the privatization process.
• Lots of oligarchs took at the sad state of the Russian economy in the 1990s, and decided it was safer to park their money outside the country (hence all those Russians buying up housing in London).
• Russia still managed a lot of economic growth in the early 21st century, and was helped by rising oil prices.
• By contrast, Russian banks were still so primitive that they weren’t hurt by the subprime meltdown of 2008, since they weren’t exposed to subprime mortgage bundles or derivatives. But they were hurt quite a bit by the subsequent decline in oil.
• Limited economic sanctions following the invasion of Crimea did very little, because Russia was prepared for it with considerable foreign currency reserves, and most sanctions were quickly rolled back.
• “Russia has never been a real democracy.”
• Per capita GDP has dropped from $16,000 in 2013 to just over $10,000 today.
• “Corruption, mismanagement and warmongering are rarely a recipe for success.” The Russian shrunk over the past decade.
