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Steve's avatar

Thanks Ian. It’s great to have your articles on Substack. Gotta take issue tho, with your economic comparisons UK - Russia; as have the first few commentators. By GDP PPP Russia is the 4th largest economy on the planet - quite a bit larger than Japan or Germany. Nominal GDP as a measure (dollar pricing based) is pretty useless, and largely referenced today for political reasons - ie: to pretend the USA is still no1, and to pretend that Russia has an economy comparable to Spain. I’d like to see analysts and commentators cease & desist with this charade tbh - its really not helpful in understanding the multi polar world we live in. With regard to the western sanctions, I honestly do believe that these have not just been a colossal failure, but worse (from the point of view of a U.S. Empire in grave crisis), it has been hugely beneficial in powering up the Russian economy going forwards. Russian firms have filled the niches vacated by western companies, with those profits now staying in-country rather than being repatriated abroad. Sanctioning the oligarchs has resulted in their wealth being productively invested in-country, instead of in the London & NY property markets. Russia has been forced by sanctions to push hard on its own tech development. Surging trade between Russia and BRICS, and especially with China, has moved forward and solidified the multi polar world. What is not to like if your a Russian?

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Ian Proud's avatar

Thanks Steve and don't disagree with most of what you say. To be honest, as I've said to others, the nominal GDP comparison isn't really the main point of the article, tho. Whichever measure you use, Russia is getting more for its money.

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Jams O'Donnell's avatar

Just as striking is a comparison with Japan, which spends approximately the same as the UK on 'defence' but has a navy with 20 subs (non-nuclear, admittedly), 4 carriers, 36 destroyers and 6 frigates. Where is UK money going, to get 2 operational destroyers (with a sadly inferior armament) and half a dozen frigates, and subs and 2 carriers which also spend much of their time in dock?

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Ian Proud's avatar

Abysmal programme management (reported on by the NAO and the Foreign Affairs Committee repeatedly) and a complete inability of the Ministry of Defence to manage its spending?

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Michael  Lynch's avatar

One only needs to look at what the Pound, Dollar and Ruble buy. The Russians definitely get a minimum of two or three times more "performance value" in weapons systems than do their US and British counterparts. There are Russian weapons that neither the US or UK have a similar or even a defensive answer for; particularly in hyper-sonic weapons. GDP is a BS number made to mesmerize the public and create an illusion of strength and dominance. Look at the recent GDP numbers in the USA and how a flood of "pre-tariff" imports have skewed that number. GDP is an enigma shrouded in illusion, GDP is whatever the politicos want or need it to be. The CCP in China manipulates GDP in a very similar manner to that of the USA. The USA inflates the US GDP through MASSIVE deficit spending, a practice that we all know is unsustainable. This is how a nation gets $37 TRILLION in national debt, with no reductions in sight. DC politicos all talk about debt reduction, but so far, no one has stepped up to the plate. Trump is making noise to do so, but only time and concrete action will give us the real answer.

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Isadem's avatar

And another aspect that not many have picked up on yet, however since this has been mentioned as an accelerating factor in other countries’ development (including China and India), I will mention it here: the role of Russian diaspora. If you have Russian heritage living in the West, savings in EUR/USD/GBP, and an ability to return to Russia and invest at 20%, with all these macro developments, as you said, what’s not to like?

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Nick P's avatar

Interesting. How do you justify the 20%?

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Ian Proud's avatar

Interest rates in Russia right now. In fact, it's 21%.

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Nick P's avatar

Thanks. And thanks for the great analysis. Would this be somewhat offset by ruble’s risk of exchange rate fluctuations?

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Rexii's avatar

20% is nominal, the rouble is weak & falling against reserve currencies propped up by high interest rate, inflation is high which is unsurprising given a war economy - Russia is simply not an investment destination for Joe-exiled-Bloggs

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Isadem's avatar

Inflation isn’t currently anywhere near those extreme levels though, and the depreciation of the rouble seems more a function of Western dominance and its control over capital flows than of fundamental weakness. From a pro-BRICS or multipolar world perspective - or even just assuming the current war concludes in Russia’s favour, which appears likely given the facts on the ground - there’s a reasonable case to be made for FX rates reverting toward historical norms. That, in turn, could present attractive return potential.

It’s certainly interesting from a diversification standpoint, especially for those looking to reduce exposure to Western-centric systems in anticipation of a more multipolar global order. And if one believes that Russophobia in the West will eventually subside - as I do, even if that shift isn’t immediately visible - that could eventually open the door for global institutional capital to return.

Just my two cents, of course - others may well see it differently.

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Rexii's avatar

Anybody who sees BRICS (and that includes all the Judge Nap stans etc) as an economically credible alternative to the dollarised international trade and capital flows system is clueless I'm afraid. This is not likely to change in the lifetimes of anyone reading this blog.

Also Russian's don't want to buy just EM produced goods. No one does including heavily sanctioned places like Iran. Yes clothes, toys, furniture etc from China. But they also want American IT, German cars, French/ Italian luxury goods etc. And they want to go on holiday to the west or dollarised places like Dubai, not India.

That said, I do see Russia re-integrating economically into the west once the present phobia ends. The mutual benefits are just too big to miss.

Russia has a good strong domestic market, educated population, lots of resources, stable government ... the people who bought western assets on the cheap after the sanctions were imposed will have made a killing.

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Paulo Aguiar's avatar

When a country can’t even maintain a dozen seaworthy warships, yet still plays at global power projection, it isn’t strength; it’s delusion. Britain’s first duty is to defend its own shores, its own people, and its own interests.

Burning billions on performative deployments or foreign wars we neither intend to win nor truly understand only underlines how lost our strategic compass has become. National leadership means prioritizing capability over theater, reality over nostalgia, and sovereignty over subservience to failing international fantasies.

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IronForge's avatar

Nice Article. It is a shame to see a Globe Spanning Fleet wither away.

I'm a Mathematics Major and a former US Naval Officer who deployed through the Pacific, Indian Oceans and into the Gulf during the IRQ-IRN Tanker Wars.

I still don't see how+why the GBRitsh constantly pass off the fake narrative of Russia invading Crimea in 2014.

I'm no history buff; but IIRC: Crimea declared Independence back in 1991 when the Soviet Union collapsed along with other former Union Members. Kiev did not recognize it; and annexed Crimea.

Jumping to 2014 where Crimea were hosting the Russian Black Sea Fleet in Sevastopolis when the Maidan Coup occurred. The Crimeans voted to Secede from Kiev along with Lughansk and Donetsk Oblasts and declared themselves as independent republics then due to the Anti Ethnic-Russian Policies declared by the new Kiev Regime.

Crimea then voted to join the Russian Federation and Moscow voted to Annex Crimea AFTER Crimea formally applied to join the Federation with an overwhelming Majority.

No Invasion, no shots were fired. A good portion of those living in Crimea were Russian Black Fleet Personnel, working at/associated_with the Russian Sevastopolis Naval Base, and/or commuting to work in Russia.

Culturally identifying as Russian - with a political adjustment by Krushchev - Crimeans consider them as being Russian; and their own public/govt posts on Facebook and other social media confirm of a voluntary Secession.

One thing I DID find peculiar, was that the United States Navy were soliciting for Bids regarding a project that would renovate Naval Facilities in Sevastopolis to US/NATO Standards. Counting their chickens before the eggs hatched - so everyone knows this Maidan Coup was pre-planned.

So - there was no invasion. Pleae spare us the - lies, delusions, or wishful thinking regarding Crimea.

It's unbecoming...

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Isadem's avatar

Thank you, Sir, men like you give me hope. 👏🏻

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Alex's avatar

Britain’s economy is twice that of Russia and they are ‘labouring under sanctions’ riiiiiiiiiiiight.

I’m sure our GDP is very impressive, meanwhile we all get our calculators out everytime we turn the heating on…. give me a break

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Ian Proud's avatar

I'm not sure our GDP is that impressive but, in any case, that was not the main point of the article..

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Tom Welsh's avatar

If hard numeric facts are wrong - which they are in this case - how can we trust any of the rest?

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Gilgamech's avatar

Ever the diplomat, Ian, you elide *why* half the Ukay Navy is sailing “East”: to support Israeli genocide by punishing the only country in the world standing up to it, poor benighted Yemen.

For this, we leave the doors open for Russia? It’s almost like the MoD doesn’t really believe in any Russian threat, it just likes to use it to scare the plebs.

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Isadem's avatar

Or, hear me out, they know that’ll come in handy for a false flag just wonderfully…I sincerely hope I’m wrong but as they say, sometimes the difference between conspiracy and reality is time.

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LudwigF's avatar

Thanks for another really good article.

If you don’t mind my pointing out, it’s not especially helpful in drawing comparisons between the sizes of different countries’ economies to use a constant currency measure.

If you use the more useful and relevant metric of Purchasing Power Parities, and reference eg the CIA or IMF Websites, you will find that by this measure Russia’s GDP is significantly larger than that of Japan, and far larger than that of the United Kingdom.

This is just common sense really, as quite obviously a country with an economy smaller than that of eg Spain, would clearly not be able to afford to do the sort of things that Russia routinely does, without incurring any particular or noticeable difficulties in paying for them.

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Ian Proud's avatar

Thank you. And you are right, of course. Although the nominal comparison was for illustrative purposes. Whichever measure you use, Russia gets more bang for its buck that the UK.

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Tom Welsh's avatar

The fact that "Russia gets more bang for its buck that the UK" has nothing at all to do with the relative sizes of their economies or military budgets. It reflects the fact that Russia is a better run and much less corrupt country. And, of course, that its very existence has often been threatened by foreign enemies - as it is again today. Whereas the UK, like the USA, is not threatened at all by anyone.

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eg's avatar

It’s also important to consider the composition of GDP — economic rents (with which the Anglosphere economies are infested) are NOT the equivalent of productive economic activity, especially in heavy industry. Only the latter produces weaponry.

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Steve's avatar

My, my, but how the mighty have fallen. 😞 Britain - from having the largest navy on the planet in 1939, has sunk to this. 🫣 I think LudwigF might be on to something 🤔 - though perhaps he is a little behind the curve……. the U.K. Govt has been effectively handing over its pennies to the MIC sweetshop owner, and asking what it can buy, for quite some time. 😂 Seems like the financialisation of everything in the Anglo Saxon economies, has had an extremely deleterious effect on national security - in much the same way that it’s had an extremely deleterious effect on everything else in those benighted countries, and for exactly the same reason - putting profit first, second, and last. So……… the western MIC just loves making rubbish boondoggle stuff like the F35 at $100million a pop, and with an eye watering maintenance & logistic cost 😱, or Patriot air-defence systems that cost north of $1billion, with each missile at $4million, but can’t stop Yemeni drones & missiles from taking out 1/2 of Saudi oil production. It couldn’t be clearer - that same MIC is not remotely concerned with the actual national defence needs of the countries that buy its expensive crap, which is why they won’t massively ramp up artillery shell production (not profitable enough), and why after 3 years of the Ukraine war (and with MIC shilling politicians yelling their heads off about how Russia is about to roll up to the Atlantic Ocean after Ukraine), they STILL haven’t come near to increasing general nuts & bolts military production to anything remotely commensurate to the alleged ‘threat’ from Russia; for the simple reason that none of that is profitable enough for them. Far better for the share price, the profits, the lobbyists, and the Washington swamp, that they carry on bankrupting the western taxpayer by producing relatively small quantities of extremely expensive, extremely complicated, extremely fragile, high end military items. That’s how you get a British navy today that couldn’t fight its way out of a soggy paper bag. Jacky Fisher is spinning in his grave. 😞 Did I read somewhere that the U.K. MOD had been invoiced (and actually paid it) £10 for a single paper clip, and that the Pentagon had been invoiced $10k for a small bag of custom made bolts? 😂😂😂

keep Ansrallah’s missiles & drones

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Steve's avatar

Tom Walsh: I can’t argue with any of that. The worst thing for me, is the constant, empty, clownish posturing the U.K. Govt engages in. If I was being mean, I’d actually love to see the kind of serious hiding Russia would mete out, if the U.K. put 5,000 troops in Ukraine. Ooops - me bad. 🫣

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Tom Welsh's avatar

(Actually, I'm Tom Welsh). I quite agree with you, Steve. I really hope that if the clowns in government were to order any kind of attack on Russia, our military commanders would refuse. (And ideally arrest them for treason). Russia could render the UK uninhabitable in half an hour. It could also wipe out any of our armed forces like crushing a flea; or destroy any given government building or base in the UK with conventional weapons.

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Tom Welsh's avatar

The honest truth is that Britain's navy grew more or less along with its empire, reaching its apex in 1914. Starting with the Washington Naval Conference of 1921-2, the Royal Navy was drastically cut down under US pressure that was irresistible because Britain was deeply in debt to the USA. After a final burst of glorious activity in WW2, the navy was neglected and has now almost disappeared. Apart from the two monstrous white elephants built at the behest of Gordon Brown to boost employment in his constituency.

There is a very good reason: the job of the Royal Navy was to protect the Empire and its trade routes. The Empire is long gone, and no one is threatening our trade routes (although they are at the mercy of the USA, Russia, or China, should any of them wish to harm us. Or, come to think of it, India or France).

The Royal Navy of 2025 would be best employed defending our coasts from the horde of illegal immigrants who constantly flood or seep in. For that role, it would be better off with 100 or so small, fast, lightly-armed patrol boats supported by a few frigates and the odd submarine (just in case). Today, missile technology has advanced so far that most countries can quite easily be defended from within their own borders.

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Tom Welsh's avatar

"Today, there are only three global naval powers: the United States, China, and Russia".

True. Of which, some readers may be surprised to learn, China has the biggest and most modern fleet. Russia has a good, balanced, reasonably modern one. And the USA, apart from its still excellent submarines, is crumbling. Its immense aircraft carriers are symbolic and symptomatic: any nation with serious missiles could destroy them at will. That includes at least Russia, China, and Iran.

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Velociraver's avatar

Makes one wonder where it's imagined that funds for a fifth-gen aircraft will magically appear from. In this case, UK stands with USA, planning for aircraft that will surely cost 300 Million+ each, be unmanageable to maintain effectively, and in such small numbers as to be next to useless.

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Ian Proud's avatar

Believe me, the UK has a list of 1800 military procurement programmes, none of which we can afford, all of which will be vastly overbudget and time, if they are even delivered, whereupon they'll either quickly be decommissioned or sold to a developing country for a discount. Welcome to Britain!

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Tom Welsh's avatar

At a time when manned aircraft of almost any kind are obsolescent.

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Gilgamech's avatar

I had to fight back tears reading this.

Take back the Falklands? With this navy, we couldn’t take back the Isle of Wight.

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Ian Proud's avatar

Funnily enough, HMS ‘Sandown’ was transferred to the Estonian navy in 2007, lol. Wightlink bookings to Southampton will shoot through the roof..

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Tom Welsh's avatar

"European politicians and journalists talk constantly about the huge challenge in countering an apparently imminent Russian invasion..."

Which is absolute nonsense. Russia has been forced to invade Ukraine, in what it carefully defines as a "special military operation" rather than a war. In a real war, much of Ukraine would have been devastated in the first week, and Russia would have won quickly but at much greater cost in damage and death. Hard as it may be to believe, the Russian SMO has been guided by the overriding priorities of minimising harm to civilians, Russian military deaths, and Ukrainian military deaths (in descending order of importance). The fact that as many as a million Ukrainian soldiers and foreign mercenaries have died reflects their tenacity and the determination of Western governments to fight to the last Ukrainian. After all, from the distance of Washington, London, Paris or Berlin, they are all Russians of one kind or another. And to those governments, "the only good Russian is a dead Russian".

Russia has absolutely no reason to contemplate invading a single European country. It already has all the territory, resources, people, expertise, and industry that it needs. If it has built up powerful armed forces, that is because it feels that its very existence is threatened by the same Western nations that attacked it so often before - the Swedes in the 18th century (smashed at Poltava), the French and much of Europe in 1812 (wiped out by battle and cold), and the Nazis and much of Europe in 1941-5. In each case Russia did not start the war, but ended it.

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Tom Welsh's avatar

"Despite being half the size of Britain, economically..."

That turns out not to be the case. In fact, Russia's economy is closer to twice the size of the UK's - which shouldn't be surprising as its population is about twice that of the UK. And Russia has vast natural resources, while the UK has rather few - and refuses to tap those it has for deranged ideological reasons.

When measured by GDP adjusted for purchasing power parity, Wikipedia shows Russia's economy forecast by the IMF as over $7 trillion for 2025 while the UK's is forecast as a little under $4.5 trillion. That makes Russia the world's 4th greatest economy, and the UK 10th.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

Moreover, Russia is so much better organised and less corrupt that its government gets far, far more value for money from its defence budget. Projects are usually delivered on schedule, to specification, and within budget - unlike those of any Western nations.

Another factor in Russia's favour is that its military doctrine and strategy are exclusively defensive. With about twice the area of any other nation, Russia has immensely long and exposed borders which are extremely challenging to defend. That is all that the Russian armed forces are chartered to do. Whereas the UK, with its puny resources, aspires to yap at the heels of far more powerful nations. A chihuahua threatening a bear, as most Russians see it.

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Wall's avatar

Is the English economy bigger than the Russian one? lol ) However, the less the British understand what is going on, the better.

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Jason S's avatar

Now we know why Gulliver was unable to make the Lilliputians change - their media just wouldn't report it.

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