For many of us, the justifications put forward by Putin for his war against Ukraine – NATO, “denazification,” the supposed decadence of the West, and other arguments – are mere pretexts. What truly worries the Russian leaders is the path Ukraine has taken toward democracy and the fight against corruption.
Imagine a Ukraine integrated into Europe and the world, thriving in a more free and prosperous societal model. This, Putin cannot accept, because sooner or later, the Russian people might demand the same thing by looking at their Ukrainian neighbors and saying: “We too want to follow this path.”
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The real tragedy of Russia was its inability to fully enter into the modern era.
For years, Russians (and Ukrainians also) were fascinated by the ostentatious success of the oligarchs, the flashy opulence of television stars, and for everyone, the symbol of success was owning a car and a flat-screen TV. The fear of poverty and deprivation was so deeply ingrained that it seemed unthinkable to criticize those who thrived. Material success became a true cult. It is essential to remember the poverty and chaos of the Yeltsin era, the empty shelves in stores, and the humiliation felt by those left behind.
A Russian colleague once told me: “A true democracy can’t work in Russia; the Russian people, in their tragedy, only deserve a strong regime, otherwise, like under Yeltsin, everything goes to excess. Putin has given us prosperity and stability.”
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In Russia, the shadows of the past are never completely extinguished, an explanation for the tragic fate of the country that took millions of lives in the gulags or in the Holodomor, in the silence of a great country whose culture, bright and profound, should have been enough to ward off barbarism, yet still strays into a fury that neither reason can understand, nor the heart can absolve.
I believe that at the beginning, Putin genuinely wanted to modernize the Russian economy and bring it closer to Europe. At that time, he had good relations with Schröder and Chirac. But did he think Russia was too far behind? That the cultural gap with the West was too wide? He may have been inspired by the Chinese model, an authoritarian regime within a market economy, or to summarize: one leader who decides and a people who execute, more efficient than those weak democracies, as they say.
Ultimately, the entire history of the world can be summarized by the fact that when nations are strong, they are not just, and when they want to be just, they are no longer strong. Putin has chosen the first model.
It is all the more regrettable because Russia had everything to become a power comparable to Brazil in Eurasia, while preserving its identity. Thanks to its vast natural resources, it had a real war chest, which it could have used to improve the well-being of its population and invest in industries and services of the future. The goal was not to copy China or Europe, but to forge its own model. Its people were ready to follow this path, especially since the level of education among the youth was high.
Did he judge the competition with other nations too complex? Did he believe it was more advantageous for Russia to retreat into itself and cling to outdated patterns from the past?
In 2007, if Putin looked at the Chinese model, he likely realized that Russia could not replicate its promising success. Unlike China, which had established itself as a manufacturing power, Russia remained dependent on its rent economy, relying on the exploitation of its natural resources: gas, oil, coal. For a country with so many engineers, where was its aerospace industry? Its automobile industry? What was the role of small and medium-sized enterprises? Outside its traditional sectors, Russia had failed to transform itself into a true industrial power.
Russia had to rely on its already mentioned rent economy or bet on improvements in its heavy industries, such as steel, chemicals, and mining. It also sought to energize its agriculture, with some success, although always in competition with other countries. Its problem is also that its domestic market is too limited – it’s a niche market.
Today, Russia faces five major structural problems that hinder its future:
- A large country that is very costly.
- A poor country.
- A lack of expertise in the globalized economy.
- The end of its financial resources.
- A serious demographic problem.
When talking about the Russian economy, there are always some experts who highlight its strengths and others who emphasize its weaknesses, with arguments that are often valid but presented in a way that supports their own theories. My perspective, however, focuses on Russia’s structural problems, which, in my view, are quietly causing a detachment from the rest of the world that will only worsen in the coming decades. And this war will represent expenses they have not yet anticipated.
- A large country that is very costly.
As soon as distance is involved, everything becomes more expensive in Russia – transportation, infrastructure, road and railway maintenance, and even internet connections and telecommunications. This problem is also found in other parts of the world, but in Russia, the distances are far more impactful. In Russia, everything is more expensive than elsewhere when the costs associated with distances are considered. In a globalized economy where businesses compete with their counterparts, the consequences are immediate. Moreover, due to temperature fluctuations, the maintenance costs of roads and railways are disproportionate. And Russia has no choice – its natural resources are often located in these distant regions, which still have significant populations, and the east of the country must be connected to the west.
- A poor country.
This might be surprising, and we could talk about the good level of education, the many engineers, the hardworking, resourceful, resilient people, and, of course, the wealth of natural resources. All of this is true, but once again, there’s the issue of the country’s vast size and the very unequal contribution of its population to the nation’s wealth. Thirty-five million people live in remote regions across 75% of the country’s territory. These populations, who live far from everything, for instance in Siberia or the Far East, contribute less to the economy than a resident of Moscow working in IT, or a worker in a factory in St. Petersburg. Despite its wealth, its GDP per capita in 2021 barely reached $12,690, compared to three times that amount for the European Union.
- A lack of expertise in the globalized economy.
For 25 years, Russia has failed to develop a high-value-added economy, particularly in manufacturing or the production of processed goods. It has remained anchored in historical know-how that is now outdated. Industries, such as the automotive sector, were merely investments from Europeans or Asians, who have since left for good due to the war. And it is clear that even after peace, investors will not return for a long time.
- The end of its financial resources.
Fossil resources are Russia’s strength, but they will also be its downfall. The comfort provided by oil rents has stifled innovation and efforts to diversify the economy. With the global energy transition, these revenues will inevitably decrease.In 2021, 52% of Russia’s exports came from gas, oil, and coal, generating $257 billion out of a total budget of $340 billion. An inevitable decrease in these revenues exposes Russia to the risk of impoverishment, particularly given the colossal costs of its infrastructure.
Successes in other sectors, such as heavy industry or grain exports, will not be enough to fill the gap. And if Putin believes that his allies, like China, India, or Brazil, will leave room for him on global markets, he is deluding himself.
- A serious demographic problem.
Like many other countries, Russia is facing a sharp decline in birth rates. By 2050, its working-age population (20-65 years old) will drop from 78 million to 68 million, a decrease of 10 million workers, representing a 13% decline. This means not only a smaller workforce but also an increasing burden on the working population.While this issue is shared by other nations, it becomes particularly critical for Russia, as it adds to the many structural challenges already mentioned, making the situation even more alarming.
Experts will argue that many other countries face these difficulties, but in the case of Russia, the combination of these five structural problems, compounded by the consequences of the war, condemns Russia to a dead end. Putin may have initiated wars of annexation in the illusion of finding a way out. However, these conflicts will only further weaken his country and worsen its fate.
Russia had the opportunity to modernize for the good of its people, but it chose the path of tyranny. In the future, its people will pay the price.
The Russian people preferred stability to honor; they will have decline and dishonor.
The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.
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