According to the International Monetary Fund (IMF), Russia’s economy is expected to grow by 2.6 percent in 2024, which is significantly more than what it predicted last October. This growth comes despite Russia being subject to more than 500 trade sanctions from the US and the European Union (EU) since 2014, when it annexed Crimea. The invasion of Ukraine on February 24, 2022, has only intensified these sanctions.
One of the reasons for Russia’s economic resilience is its ability to turn itself into a “next-generation war economy.” Vladimir Putin has built a Military-Industrial Complex using 21st-century technology, and this complex pays up to 80% of its production contracts in advance, with approximately half of those large conglomerates. This has resulted in a noticeable and accumulated growth of productivity, which was never achieved under the Soviet regime.
Putin’s government has been able to install a dynamic capitalist system within the Military-Industrial Complex, despite increasing defense spending by 4 points of GDP in the last three years. This increase in productivity has more than compensated for any inflationary explosion that might have occurred as a result of this spending increase.
Russia’s strategic move away from Europe towards Asia has also played a significant role in its economic success. In recent years, Russia has increasingly used the Chinese currency – yuan or renminbi – in its international transactions, and this trend continues as evidenced by the fact that China is now responsible for almost half of Russia’s total international trade. India’s share of Russia’s international trade has tripled over the past two years, with most transactions processed in yuan or renminbi currency.
The trade sanctions imposed on Russia by the US and EU were intended to isolate it from the world economy and slow its momentum in the Ukraine war until it was forced to lose its status as a major military power. However, events have shown that a country as large as Russia cannot be isolated from the global economy, especially given the technological revolution that has produced complete integration of capitalist systems since 2008/2009. The United States’ attempt at an endless enterprise against language technology’s immediacy and digitization can do nothing against military superiority and unlimited hegemony over global currency like dollar.
In conclusion, Putin’s government has successfully transformed Russia into an advanced capitalist economy with modern technologies within its Military-Industrial Complexes while continuing to expand its trade relations with Asia particularly China and India despite facing numerous economic sanctions imposed by Europe and America since several years ago due to annexing Crimea Peninsula and invasion of Ukraine but with complete disintegration effected by both eventualities double implosion Russian state created by Romanov’s dynasty after collapse Soviet Union