September 3, 2014

DON'T NEED A STRATEGY, JUST AN AUTOPSY:

A Western Strategy for a Declining Russia (Joseph S. Nye, 9/03/14, Project Syndicate)

The evidence of Russia's decline is pervasive. The rise in oil prices at the beginning of the century gave the economy an artificial boost, leading Goldman Sachs to include it among the world's major emerging markets (one of the "BRICs," along with Brazil, India, and China). Today, however, that growth has vanished. Russia's GDP is about one-seventh the size of America's, and its per capita income (in purchasing-power-parity terms) of $18,000 is roughly one-third that of the US.

Oil and gas account for two-thirds of Russian exports, half of state revenues, and 20% of GDP, whereas high-tech exports represent only 7% of its manufactured exports (compared to 28% for the US). Resources are allocated inefficiently across the economy, with a corrupt institutional and legal structure that impedes private investment. Despite the attractiveness of traditional Russian culture and Putin's calls to boost Russian soft power, his bullying behavior has sown mistrust. Few foreigners watch Russian films, and no Russian university was ranked in the global top 100 last year.

The likelihood of ethnic fragmentation is lower than in Soviet days, but it still remains a problem in the Caucuses. Non-Russians comprised half of the Soviet population; they now make up 20% of the Russian Federation and occupy 30% of its territory.

The public health system is in disarray. The birth rate is declining, mortality rates have increased, and the average Russian male dies in his early sixties. Mid-range estimates by United Nations demographers suggest that Russia's population may decline from 145 million today to 121 million by mid-century.


Posted by at September 3, 2014 7:17 PM
  
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