How Worried Should We Be About Russia?

Let's face it, the world is an awful place, filled with awful countries.  I tend not to write much on the foreign policy front because there's not much more than that to write.

The unbelievably good news is that the more awful a country is, the faster and more thoroughly it fails in our modern world.  In fact, there's almost a perfect correlation between the awfulness of a country's government and the failure of its economy.  At the bottom, think North Korea, Cuba, Iran, Venezuela.  And at the other end, think Singapore, Switzerland, and even the United States (for now).  There's a very simple reason for this:  Economic success comes from investment and exchange.  The more a government asserts arbitrary control over the people, the less investment and the less exchange, and voila! -- failure!

There are always countries out there to worry about, and I'm certainly not advocating an end to diligence toward the threats of the world.  Recently at the top of the list of countries seeking to act as threatening as possible is Russia.    Here is an article today from John Hinderaker of Powerline on some recent behavior coming out of Vladimir Putin's regime.  Hinderaker chronicles antics including sponsoring armed insurrection in the Russian-speaking parts of Ukraine, openly looking for new military bases around the world to expand its military reach, and even sending a military intelligence ship full of eavesdropping equipment to dock in Havana, Cuba.  Most remarkable is the account of the invasion today of the parliament building in Crimea (part of the Russian-speaking portion of Ukraine) by what appears to be an armed Russian paramilitary force:

“More than 120 armed men entered the Crimean Supreme Council and the Crimean government. These professionally trained people are armed. They brought weapons – automatic weapons, grenade launchers, and machine guns,” Kunitsyn said….

Granted, Russia has some serious military capabilities, including a lot of nukes.  But when you get right down to it, they have an overwhelming problem, namely a limited crony-capitalist economy that doesn't look to be going anywhere soon.   If you invest money there, nobody trusts the government not to steal it; so investment is way below where it should be.   An article here at Ria Novosti Business quotes Putin in October 2013 as bragging that foreign direct investment in Russia had reached $55 billion for the first half of 2013.  Oh, but wait:  The same article cites figures for "capital flight" from Russia, peaking at $133.7 billion in 2008 and still continuing $80.5 billion in 2011 and at $56.8 billion in 2012.  Seems like, by the time you take everything into account, they're losing ground.

Economic "growth"?  They eked out 1.3% in 2013 according to Bloomberg here.  That represented the fourth consecutive year of economic "deceleration," according to the article.  It quotes Economy Minister Alexei Ulyukayev on January 29 as admitting that Russia "is struggling amid meager growth in investment." 

And then there's the small problem of population.  According to LifeNews.com, "Russia Suffers From Devastating Underpopulation."  The population peaked at almost 149 million in 1991 at the fall of the Soviet Union, and has since fallen to under 144 million.  The total fertility rate at 1.7 is better than much of Europe and Asia, but not enough to maintain population.

You need population and economic production to support military spending.  According to a Wikipedia list of military spending by country for 2013, Russia spent $90.7 billion, which was 4.4% of its GDP.  The U.S. spent $682 billion, also 4.4% of GDP, but 7 1/2 times what Russia spent because the economy is 7 1/2 times larger.

I can easily see why Russia's immediate neighbors, like Ukraine, have reason to be concerned.  For that matter, Russia can well cause some trouble in nearby places like Iran and even Syria.  But I don't see how they become an increasing player on the world power stage unless they can do something about their population and their economy.   To achieve those kinds of goals, Putin's power games and bullying are a serious negative.