And ultimately that's what imposes economic costs.
It'll be curious how much of the gap is filled by substitute Chinese goods. (E.g. the domestic CFM-alternative engine projects [0])
With the wrinkle that Russia and China are united by their geopolitical opponents more than their friendship, and Xi doesn't seem thrilled about shackling the Chinese economy to the consequences of Russian war.
Massive difference between airliners and aircraft. Russia has not shown itself capable of mass manufacturing airliners. (Or even advanced aircraft for that matter.)
That said, as a petro state, they’re fine running inefficient engines across their skies.
Now look at them post sanctions.
The SSJ-100 contains far more important systems (not parts) [1] than e.g. Embraer’s regional jets. It was designed with consultation from Boeing, including throughout manufacturing. Russia’s indigenous jets are terrible, and there is no reason to expect them to improve, they can’t compete against the Chinese for the anti-Western market.
To be fair to Sukhoi, this is how Boeing builds planes. If America were sanctioned by its allies, I’d similarly argue that Boeing, too, is incapable of mass manufacturing airliners.
[1] https://web.archive.org/web/20190402154855/https://www.uacru...
> Regulatory and market conditions do not currently permit the Funds to conduct transactions in the local Russian market.
[0] https://www.reuters.com/business/finance/limited-russian-sto...
[1] https://www.vaneck.com/us/en/blogs/emerging-markets-equity/r...
That said, I’m not finding anything about Russia prohibiting foreign investment, but I am finding a lot about sanctions prohibiting dollar and Euro investment in Russia.
Growth that depends entirely on government spending can only last so long... First you blow all your reserves, then if/when you start printing money and hyperinflation kicks in even if the nominal GDP in the domestic currency appears to be rising, real GDP falls fast.
Because Russia's essentially a petro-state, they had sizable cash reserves with which to prop up their economy. Now you can see with the price of the Ruble that they've run out of the will to prop it up using foreign reserves (probably running low on foreign currency) and most estimates of their economic growth is that it'll stall or they'll see a recession for 2024 and beyond.
> The US & EU are not serious about winning this war, mostly because they don't have confidence in themselves that they can.
You're right that the west isn't serious. It's not that they don't think we can, it's that they're afraid the slightest hit to our living standards will erode support. While they might be right, we're sleepwalking into an even worse scenario...
It’s not that simple. I don’t think Russia is low on foreign currencies. Due to sanctions and effects of war spending Russian economy doesn’t behave as a normal one. Recession is going to happen, sure, because the current high demand on domestic market is matched by credit-driven growth of supply. As soon as war spending drops, demand weakens and interest rate drops, but some of the businesses which play the chicken game with central bank will have problems. So yes, recession is going to happen. But they will not burn foreign reserves to zero, simply because some of them are frozen and some are in rupees and yuan, which are not easily convertible.
No, of course not. But it's clear they've burned through enough that they've given up trying to prop up the Ruble, as they did in 2022.
There's no advantage for them to have the Ruble so weak because they absolutely want to import Chinese and Western products, namely technology, to fund their war machine. Even against the Yuan, the value of the Ruble has nearly halved since June 2022. That's not good for a nation that needs to import things...
You missed the goal of sanctions on Russia?
> MIL complex is on over drive
This is correct. The Russian economy is doing fine.
> mostly because they don't have confidence in themselves that they can
This is wrong. It’s a resource-commitment problem. Not one of capabilities or confidence.
The Russian economy is doing "mixed". It's a war economy which can be propped up for quite a while but it has significant structural issues that will take years to repair. The country won't fail, but it will further struggle because of the decisions made my leadership.
I find this general attitude of "Russia has no issues" that are going around on the internet quite confusing if pretty much every economic indicator says otherwise. Let alone the fact that a meaningful part of the working population is fighting or left the country rather than engaging in the economy.
It’s removing itself as a conventional threat to Europe for generations to come. And as much as Beijing is a rival to Washington, they’re rational in a way Moscow is not. Russia as a Chinese suzerainty is probably a better world configuration than Russia as a sovereign regional power.
> find this general attitude of "Russia has no issues" that are going around on the internet quite confusing if pretty much every economic indicator says otherwise
The sanctions’ goal was to cripple the Russian economy in a militarily-relevant way. On this they failed and that has been widely discussed. Folks might be extrapolating that discussion inappropriately.
How? Surely not in military sense. If anything, they gained experience of modern drone warfare and tested and refined their technology.
On top of all the damage done to them, and their advanced EW capabilities that have been captured and sent for analysis in the US, and exact knowledge of things like Kinzhal, the lost flag ships and submarine, the modern sea drones - this war is a disaster for Russia.
The US and EU aren’t even involved and Ukraine is holding its ground. Russia is doing so poorly that they’re not even considered a threat anymore in the West.
Their “GDP” numbers belie systemic economic weaknesses that show up when they have to BARTER for food. That’s how worthless their currency is.
Russia is basically completely pathetic at this point - they can terrorize countries that share a land border with them but can’t project power even past Ukraine.
They had to import starving North Koreans with antique shells and Iranian RC toys. Some superpower.
The US and EU don’t care about the war in the same way someone with a Ferrari doesn’t have to race someone with a Honda Civic - because they’re not a threat. Let the person in the Honda rev their engine and scream that they’d win - they’re just stupid. They look stupid.
They’ve lost what, 500k soldiers? They’re so much weaker than the Soviet Union it’s laughable.
The rest of the world disrespects them so much that they had $300B worth of Russian assets outside their country - and they were all seized. That was half their famed “sanction proofing”! What are they going to do about it? Nothing.
They have “hot” GDP based on faux demand for wartime goods - as they trade Rubles for oranges because nobody wants their currency. Does that sound viable to you? Laughable.
This will be Europe’s first post-War test of security integrity.
My suspicion is it will fail—that Europe as a single force, versus collection of countries crowded on a continent, is an American invention, and without American strength will dissolve divided. But my hope is it will succeed.
I mean yes, we did. Western Europe was unifying under Berlin in the 1940s.
> by convincing Eastern European countries to trust their protective umbrella rather than the French-German domination
Militarily speaking, modern Germany is irrelevant. (Partly due to how it’s been managed post-War.) Especially to Eastern Europe, whose security concerns require a nuclear umbrella.
Source on that? No documented cases in history of U.S. sanctions ever ending.
(Which is why from a game theoretic point of view the only winning move is import substitution, not kowtowing to whatever terrorist demands.)
Sanctions on Iran were relaxed in exchange for partial cooperation: https://en.wikipedia.org/wiki/International_sanctions_agains...
I would say that Vietnam also shows that economic relations can improve a lot even without a fundamental change in the regime.
China is also an example where economic relations improved.
I don’t see any reason to think that sanctions can’t be lifted. But it may require a complete collapse of Putins regime/party for it to happen on a short timescale. Is there any reason to think USA wouldn’t be willing to open up to a new leadership if they have a radically different attitude and pull out of Ukraine?
If Russia turns into something like North Korea or Iran, then yeah, the outlook is not good. But why should it be?
From a game theoretical point of view: I don’t think any leader of any country wants to end up like North Korea, so the precedent being set is good.
No. None of the sanctions levied against the USSR were lifted and still technically apply to Russia. (Enforcing them is another matter.)
> I don’t think any leader of any country wants to end up like North Korea
North Korea is doing better than South Korea on every metric except "consumer goods availability" and "international relations". Not sure you're making your case here.
> ...or Iran
Iran is more modern, developed and free than any other middle eastern country. (That includes Israel.)
Your ideas are wildly out of sync with actual reality.
It's a lie. Sanctions actually began to be lifted in 1989 (Jews were finally allowed to emigrate) when we received 80486 processors. In 1990, we got our first SS7 switches and equipment for the first two mobile networks. It was a big thing.
> North Korea is doing better Too bad they are not allowed to tell this here, because internet access is available only to several hundreds people :)
> Iran is more modern, developed and free than any other middle eastern country. (That includes Israel.) Nice joke :)
This is very, very false and a pretty strong signal there's no useful discussion to have here.
In general flying in Russia has been a pretty questionable experience since the beginning of the war. Their regulator is still barely functional at this moment and a lot of secrecy is happening. For instance you will find barely any incidents reports any more.
We have been intentionally avoiding Russian airlines for flights in and out of Russia for our family for the last few years due to safety concerns.
Not very hard, now that reports are no longer publicly available. Prior to 2022 you would still find that information on avherald and other places. That said, even with the little amount of information going out, in the last 5 years alone Russia had at least 8 hull losses with more than 80 fatalities.
Do we count the (possible) "on-purposes" in the accident† count?
* https://www.bbc.com/news/world-europe-66599733
† "Accident" is discouraged as a term, generally speaking: https://crashnotaccident.com
>According to Andrei Kramarenko, a leading expert at the Institute of Transport Economics of the Higher School of Economics, passenger traffic in Russia has almost stopped growing due to insufficient supply. In September, Russia's Ministry of Transport revised its annual forecast to last year's level of 103 million passengers carried by aircraft.
>Seat occupancy on Russian passenger planes this summer reached 93-95 percent. The expert believes that the situation will fail to improve next year, which may prompt airlines to simultaneously reduce average annual flight times and maximize redistribution of their share of seat supply toward the summer when effective demand and ticket margins are several times higher.
So basically it seems that their airlines are stretched thin.
[1] - https://en.belsat.eu/83600150/russia-half-of-airbus-a320-and...
Unconditional surrender, with a complete cultural restructure and admitting to the atrocities, and prosecuting everyone responsible is a good start.
But of course, that won't happen anytime soon.
What? They don't want to?
Then maybe we can just forget about the genocide, give Russia time to rebuild their forces and recover their economy, so they can repeat the process in a couple of years?
(While allowing them to continue their genocide on occupied territory. But at least we don't have to read about it!)