By Yonaton McHugh
May 9, 2018
With the rise of the Soviet Union in the early 20 century, Russia saw a rise in militarism and industry. This also saw the breakdown of the communal farming system; despite being the 19 century agrarian giant, Russia’s grain production suffered greatly. With the collapse of the Soviet Union decades in the past, Russia is regaining agrarian supremacy. Half of the world’s countries import grain from Russia, including Egypt, the world’s largest importer of wheat. Outbound shipments have risen 40% from three years ago. While technology and climate are large factors, there is also a macro-economic explanation. When the oil market crashed from 2014-2015, Russia felt tremendous economic pressure to diversify its economy since oil and natural gas accounted for 68% of Russia’s economic activity in 2014.
For centuries, politics and economics in Russia have overlapped. This is a large part of how Russia was able to mobilize a new economic sector so quickly. This overlap is represented perhaps no better than Russia’s annexation of Crimea in 2014. The ports in Crimea, giving access to the black sea, greatly increased export efficiency, allowing products such as wheat to be sold at more competitive rates. Russia’s mixture of central planning and competitive free trade would not be possible without a powerful and contemplative head of state. Vladimir Putin just days ago was sworn in to a historic 4’th term. This makes him the longest serving leader of the country since Stalin, and arguably the most powerful. His personal wealth alone commands enormous capability, owning approximately $200 Billion. This fortune is difficult to confirm, however, as most of his assets are held unofficially in other people’s names. While this may be politically strategic, it hasn’t failed to frustrate financial analysts around the globe.
Taking these things into consideration, it would appear the Russian state, in its ambitions to rival the west, has learned from the mistakes of its Soviet past. Rather than focusing solely on military power, while certainly not neglecting its development, it is also making it a point to contest sizable portions of key global markets. While oil and grain are valuable markets to operate in from a purely economic perspective, there is a significant degree of political overlap. During wartime, grain is essential for feeding armies and oil for tanks and convoys. In the event of conflict, Russia either claims large financial gains or substantial logistical advantages. It remains largely unclear what direction Putin plans on moving Russia; his operations have not faltered in the face of powerful economic sanctions. From separatist actions in Ukraine to ceaseless support for the Syrian Assad government, Russia’s sphere of regional hegemony is expanding. The world’s increasing dependence on Russian grain, Europe’s dependence on Russian natural gas for energy, and Russia’s share in the oil market are extensions of that. All in all, to view Russia at any given moment either from a singularly economic or singularly militaristic perspective is making a vital mistake. These two lenses in tandem offer a much greater sense of realism to the picture.
The opinions expressed are solely those of the author and do not necessarily reflect those of Infuse Student Media or Southwest Baptist University.
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