Putin Has Spent Years Destroying Russia's Economy
- 17.03.2025, 14:18
The country has almost reached the point of no return.
Now Russia, thanks to the support of US President Donald Trump, can return to the world economy, but the actions of the united Western world during all this time have led the country to a point of no return.
President of TERWIN, co-owner of EVA, VARUS Ruslan Shostak writes about this in the column for NV Business. He analyzed how the Russian economy developed before 2014 and what is happening now, after 11 years of sanctions due to the attack on Ukraine.
The author of the column writes: "In 2013, Russia's GDP amounted to $2.29 trillion. This provided the country with the 8th place in the world in terms of nominal GDP. While China, the United States, Germany, India and other countries in 11 years have grown the economy and increased GDP two to three times, retaining their places in the world ranking or rising 5 positions, as in the case of India — from 10th to 5th place. Russia fell to 12th place with a GDP of $2 trillion. That is, it remained at the level of GDP in 2013.
Russia ranked 2-3rd in the world in terms of oil and gas exports in 2013 and was the main supplier to Europe. In 2024, sanctions completely destroyed the export model of Russia, which for decades focused on supplies to Europe... Without investments and new technologies, oil and gas production in Russia could decline by 20-30% in 5-10 years. And we can say that Russia has completely lost Europe as a market."
Shostak also noted that while world oil and gas consumption grew by 40%, production in Russia remained at the same level as 11 years ago, and the profit that the country earned decreased significantly. Gazprom ranked 21st among the largest public companies in the world in 2014 according to the Forbes Global 2000 ranking. And in October 2024, Gazprom topped the rating of the most unprofitable Russian companies by the end of 2023 according to Forbes magazine with a net loss of $6.3 billion.
Today, Saudi Aramco is 31 times larger than Gazprom in terms of capitalization and ranks second in the Fortune 500 ranking, having the opportunity to buy the entire oil and gas industry of Russia at the expense of only one annual profit.
Russia's public spending on space has increased 14-fold over the previous decades and reached about $10 billion in 2013, accounting for 14% of global public spending on space. But Russia, starting in 2022, is no longer even among the top ten countries in the development of the space industry. China has firmly taken its place, and it will be almost impossible to return to the world leaders, losing access to world technologies, high-tech equipment and software.
In 2013, Russia ranked fifth in terms of the number of armed forces in the world. It exported arms worth about $15 billion, which accounted for about 27% of the world arms market, providing the country with the second largest arms exporter after the United States.
"After the sanctions and the war in Ukraine, exports decreased significantly, as India, Algeria and Egypt refuse new contracts due to problems with quality and inconsistency with the declared military performance of Russia's weapons, which appeared as a result of the war against Ukraine. In just over 10 years, Russia has completely lost this sector. Who became the world leader in arms sales in 2024? USA: in 2024, US arms exports reached a record level, increasing by 29% and amounting to $318.7 billion," Shostak said.
Historically, Russia provided 70% of coal needs in the EU countries. In response to the sanctions, Russian coal mining companies began to actively seek new markets, in particular in Asia. Coal exports to China increased by 20% in 2022, reaching 68 million tons, and shipments to India tripled. However, such deliveries were carried out at significant discounts, which reduced the profitability of exports.
Also, logistical problems prevented Russia from realizing its export potential... The result. Who took the place of Russia in Europe for coal supplies? USA: coal imports from the USA to Europe increased by 60%. Australia: Australian coal shipments increased by 53.7%. Colombia: Coal imports from Colombia increased by 10.4%. South Africa: the most significant growth is observed in supplies from South Africa — by 326.3%.
In 11 years, the capitalization of Google (Alphabet) has increased 5.5 times from $400 billion to $2.18 trillion, and the capitalization of Facebook (Meta) has increased 4 times — from $270 billion to $1 trillion.
With every chance of success in 2013, Yandex's capitalization has halved over the past 11 years, the same fate befell VKontakte.
In 2013, for the first time since 1991, natural population growth was recorded in Russia, which amounted to 24,013 people. This meant that the number of births exceeded the number of deaths.
From 1 to 1.5 million people have left Russia since 2022. In 2023, the birth rate in Russia fell to a record low of 1.2 million children, which is 30% less than in 2013.
"If it were not for the war in Ukraine, which was started by the Russian Federation, Russia would have been able to remain or become a leader in key sectors of the economy in 10 years... However, ambition and an instant victory 11 years ago in Crimea wiped out Russia's prospects for the global market in the future. Because of the sacrifice of the Ukrainian people, most of our partners received a significant economic effect, strengthening their economy, "Shostak said.