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“If Russia does not end this war and get out of Ukraine, it will be isolated on a small island with a bunch of sub countries and the rest of us 141 countries will go forward and build a prosperous future, while Russia suffers a complete economic and technological isolation…”
-Victoria Nuland, former Under Secretary of State for Political Affairs and chief architect of NATO war against Russia, in a March 2022 interview with TASS
“I can’t preview future sanctions actions, but what I can tell you is we’re very focused on ensuring that Russia is not able to develop new projects in order to re-destine the gas that it previously sent into Europe. And I think especially because I’m talking to an audience in Europe, one of the points that’s worth emphasizing for a second is just how extremely successful Europe has been over the past two years in dramatically reorienting its energy system, de-risking its exposure to Russian oil, gas, coal supplies.”
-Assistant Secretary of State for Energy Resources Geoffrey Pyatt speaking at the 2024 Financial Times Global Commodities Summit
Things haven’t quite worked out the way Nuland, Pyatt, and company wanted them to.
Russia keeps taking everything the West throws at it and emerging stronger. Sanctions from the West continue to drive Russia to double down on its development efforts in its East and reorient its trade wholly towards Central Asia, China, India, and others.
Meanwhile, Russia has even emerged as Europe’s second largest provider of LNG, trailing only the US. Of course Europe is paying more since it’s not pipeline gas at a guaranteed rate but rather subject to fluctuations of the international LNG market, but that’s another story.
I want to focus here on what Russia is doing in its Far East. It’s a story that doesn’t involve the West aside from its futile efforts to hold back the tide and its ongoing missteps that keep making Russian trade routes more attractive to not only Moscow, but also Beijing, New Delhi, and others.
Source: Peter Fitzgerald, :commons:User:Fremantleboy, :commons:User:Local_Profil, M. Stadhaus – :Image:Russian Far East regions map.svg
The Eastern Economic Forum in Vladivostok held in early September offered further insight into Russia’s progress and plans. Representatives of more than 75 countries and territories took part, and 313 agreements were signed for a total of $61 billion, including investments of $43.7 billion in the Far East and the Arctic regions.
Let’s take a look at what Russia is working on and trying to attract foreign investment for despite the challenges posed by Western sanctions.
Russia and China Building Bridges
Over the past ten years, Russia has laid more than 2,000 kilometers of railway tracks and renovated more than 5,000 kilometers on the Trans-Siberian Railway and the Baikal-Amur Mainline.
Russia’s Baikal-Amur Mainline: Great Nothern Railway marks its 50th anniversary
Today one of the longest railways in the world — Russia’s Baikal-Amur Mainline (BAM) — is celebrating its half-century anniversary.
BAM now largely determines global logistics for the entire 21st… pic.twitter.com/E4XkXBSJWc
— Sputnik (@SputnikInt) April 23, 2024
By the end of this year, the carrying capacity of these networks is expected to reach 180 million tonnes — an increase of 36 million since 2021. More than 3,100 kilometers of tracks are planned for the next eight years, as well, which will help Moscow meet international demand for resources from its East.
China and Russia are also working together to increase the capacity of resources heading to the former. In 2022, they opened the lone vehicle bridge crossing the Amur River, which forms more than 1,600 of their roughly 4,000 border kilometers. Later that year they opened the Tongjiang Bridge, currently the only railway bridge connecting the two countries. It shortens the journey between China’s Heilongjiang region and Moscow by more than 800 kilometers over previous routes, saving 10 hours of transit time. This helped rail transport between the two countries jump to 161 million tonnes in 2023, a 36 percent increase from 2022. Over the first five months of this year, it grew another 20 percent.
A second railway bridge over the Amur is coming soon and will provide Russia’s resource-rich Sakha Republic with direct access to China. The new route will be 2,000 kilometers shorter than the current one which involves the use of sea ports. Beijing is investing in this railway construction in the Sakha Republic as part of a new international corridor in the Russian Far East: the Mohe-Magadan railway line.
Northern Sea Route
Some in Russia had been arguing for years prior to the Ukraine conflict that Russia should focus much more attention on the East as it offered more economic potential.
The US and EU full frontal assault on Russia made the decision easy — to Moscow’s benefit.
This shipping corridor passes along Russia’s northern coastline through the Arctic Ocean and is the shortest route between the western part of Eurasia and the Asia-Pacific region.
It’s bad news on the global warming front, but the route is becoming increasingly viable due to a reduction in sea ice and more and more attractive due to the US increasingly weaponizing trade and trade routes coming under fire.
The Red Sea where due to the West’s support for genocide in Gaza, Yemen’s Houthis continue to turn the Red Sea into a no-go zone for Western ships and for vessels carrying goods to and from Western markets is a fine example. It usually handles 12-15% of global trade annually, but is now mostly empty. Trouble brewing at the Caucasus crossroads due to Western meddling and Black Sea problems are other examples.
The Northern Sea Route, on the other hand, has as little geopolitical risk as one can find. It’s a 5,600-kilometer-long route controlled by one country: Russia.
It’s also home to some of the world’s richest gas and oil reserves. All of these factors have countries — especially China and India — eyeing more investment in the route and are alarming the West.
Much of Russia’s plans for the extraction and delivery of its Arctic resources previously involved the West, but that, of course, is no longer the case. European shipping companies mostly cut ties with Russian operators in 2022. As part of the economic war against Russia, Western partners abandoned Northern Sea energy projects. At first, traffic fell off a cliff, but it has since rebounded and now looks set to grow exponentially into the future with both Beijing and Moscow being the biggest winners.
The route shortens China’s shipping times with Europe by up to 50 percent compared to the Suez route, and Russia will rake in profits from transit fees.
Over the past decade, freight traffic on the Northern Sea Route increased from roughly four million tonnes in 2014 to more than 36 million last year. Moscow wants that number to continue to grow, but Washington sanctions are making it difficult.
The US is aiming to halt the development of the Russian energy sector, including a major new LNG project in the Arctic, as the quote from Pyatt referenced above shows. The threat of US sanctions for foreign participants in Russian projects has had an effect as Chinese banks, for example, are hesitant to invest in the desperately needed infrastructure upgrades to make the Northern Sea Route more viable.
Source: Trading Economics
Yet, it’s not stopping foreign investment completely, and bit by bit China, India, and others are becoming more involved.
In June Russian state nuclear agency Rosatom signed an agreement with Chinese line Hainan Yangpu New Shipping to potentially operate a year-round route. The deal also involves collaboration in the design and construction of new ice-class container ships.
A Russian LNG tanker, Everest Energy, is currently heading East on the Northern Sea Route. The tanker is under US sanctions and is part of Russia’s shadow fleet, but what makes it special is that, according to Business Standard, it’s the first non-icebreaker carrier looking to transit the 3,500 nautical mile-long route.
In a historic first, two Chinese container ships crossed paths on the route on September 11. It might not be the last time — although Russia has a long way to go. Its Arctic region is as underpopulated as it is underdeveloped as ports, roads, and rail all need upgrades.
Russian President Vladimir Putin, speaking at the Eastern Economic Forum, confidently laid out Moscow’s plans to do just that:
We will continue to boost the freight traffic, including by developing actively Arctic deposits, rerouting cargo flows from west to east, and expanding the transit. We are building icebreakers, expanding our satellite cluster in orbit, strengthening the coastal infrastructure, and upgrading the network of emergency and rescue centres. [We have] 34 diesel icebreakers of various classes and capacity, as well as seven active nuclear icebreakers. Another four are under construction, or, to be more precise, we are already building three new nuclear icebreakers and the construction of the fourth one will start in early 2025. Seven plus four makes 11. There is also another icebreaker – a very powerful one. In fact, it is extremely powerful with, if I am not mistaken, 136,000 horsepower, if we measure its output this way. I am talking about the so-called Lider project. Its construction is already underway here in Vladivostok at Zvezda shipyard.
While foreign investment faces difficulties due to the US sanctions threat, Russian investment is soaring. From The Bell:
Prior to the war, the Russian government was banging its head against the wall trying to find a way to force businesses to stop sitting on financial reserves and prevent them paying gigantic dividends. Businesses complained that they would rather not invest because of a poor investment climate, state interference, and an unpredictable taxation policy.
Now, everything has changed. Capital investment (expenditure on new construction, higher-tech equipment for enterprises, purchase of new kit, etc.) in 2023 hit a 12-year high of 34 trillion rubles. That’s almost 10% more than the year before, according to experts.
Russia’s positive “investment gap” – i.e. the difference in growth rates between investment and GDP – has reached a 15-year high, according to the Moscow-based Center for Macroeconomic Analysis and Short-term Forecasting (CMASF).
The biggest reason for the jump is simply that the US and Europe have forced them to. Russian companies need products, and they need to get theirs to foreign markets. That means they need new transportation and logistics infrastructure. And the list of projects goes on and on.
Russia is also modernizing the infrastructure at the Port of Korsakov, which lies on the southern part of Sakhalin Island, as part of its plans to make it a turnaround point for the Northern Sea Route. Importantly, the upgrades will mean the relocation of fish and seafood processing logistics from Busan, South Korea to the Sakhalin coast in Russia. The port will also have a large container terminal and an oil refinery.
India and Russia continue to explore more cooperation on Far East and Arctic projects.
The two sides are expediting work on the Vladivostok-Chennai Eastern Maritime Corridor on which Russia is also planning pit stops in Vietnam, Thailand and Indonesia,. and linking it with the North Sea Route. Moscow and New Delhi are coordinating on a joint shipbuilding project for maritime trade as well.
At the July meeting of Indian Prime Minister Narendra Modi and Putin, they signed a Program of India-Russia cooperation in trade, economic and investment spheres in the Russian Far East for 2024 -2029, as well as cooperation principles in the Arctic. This is intended to provide the framework for a ramp up of Indian involvement in the Far East region, especially in agriculture, energy, mining, and maritime transport.
New Delhi has been receiving oil and gas at a discount, but has struggled to offer up products in return, which has hampered a transition to transactions in national currencies. According to the Financial Times, however, Russia has covertly been acquiring critical electronics from India.
Oil and Gas Projects
The sanctioned Russian LNG tanker currently heading East with an unknown destination — likely the Koryak floating storage unit located in Kamchatka or to a receiving terminal in an Asian country — is carrying gas from Russia’s Arctic LNG 2 plant. Here again, US sanctions have slowed but not stopped the project. From GIS Reports:
When Russia’s national gas giant Gazprom placed a losing bet on pipelines, Novatek invested in developing LNG and scored. China played an important supportive role already before the imposition of sanctions, assuming ownership stakes in Novatek projects. As the West sanctioned Russia’s energy interests, China has continued providing vital inputs for those projects. As late as April 2024, delivery of a 14th prefabricated plant module allowed Novatek to complete the construction of a second production unit for its Arctic LNG plant located on the Gydan Peninsula in Western Siberia, Russia. The project aims to export gas from Novatek’s Salmanovskoye and Geofizicheskoye fields, with a planned yearly capacity of 19.8 million tons across three production lines.
The same is happening with Sakhalin oil and gas projects in the Okhotsk Sea. While Exxon Mobil, which had been leading the project, exited from operation with no compensation due to western sanctions, others haven’t been so eager to bail.
Japanese companies, for example, have not withdrawn from the Sakhalin-1 and Sakhalin-2 projects, and retain their stakes in the Arctic LNG-2 project. The US is for now exempting Tokyo from its ban on providing construction and engineering services to Russian companies due to Japan’s need for Russian resources. But Tokyo could run into problems with Moscow and potentially get the boot from Sakhalin and the Arctic projects should it continue its enthusiastic support for the US, Europe, and Ukraine.
Ongoing Challenges
It’s not all smooth sailing for Moscow on the economic and development front, as laid out by its central bank at the end of August and summarized here by The Bell:
Both pessimistic scenarios (persistent inflation and high-inflation) assume that interest rates will remain in double digits. In the persistent inflation scenario, the labor market would remain tight and inflation would be driven by high domestic demand (which, in turn, would be supported by state spending), as well as increased wages. In this scenario, average interest rates would have to stay one or two percentage points higher than in the baseline. But even under such tight monetary conditions, inflation was not predicted to fall to 4-4.5% until 2026.
The high-inflation scenario is even more dire. In this eventuality, the problems in the Russian economy are amplified by a serious deterioration in external circumstances: disbalance on the financial markets leading to a global financial crisis and recession. While the Russian economy is internationally isolated, falling demand for Russian products was still assumed to cause significant damage. This scenario also envisaged more Western sanctions on Russia. If this comes to pass, the prediction is that the Russian economy would enter recession, inflation hit 13-15% and interest rates soar to 22%.
Another issue is that Russia simply needs more people to live in its Far East. Rosstat figures for 2023 show its population at a little more than 7.8 million people, which includes a small decrease in 2023. Putin, aware of the problem, spoke at the Eastern Economic Forum about Russia’s attempts to make the East more attractive:
We cannot rely on outdated logic, where new plants and factories were built first and then the authorities started thinking about their employees. This unfair logic simply does not work in a modern economy, an economy of the future that revolves around people…University campuses in Yuzhno-Sakhalinsk and Khabarovsk have been launched in the region, but this is clearly not enough for the Far East. I propose launching several more projects….to build new campuses in Ulan-Ude, Petropavlovsk-Kamchatsky and Chita…the unified subsidy mechanism, which helps fund the construction of schools and kindergartens, outpatient clinics and hospitals and sports centres, improve the urban environment and implement infrastructure modernisation projects. For example, we are building a year-round alpine skiing resort here in Primorye, as well as a national museum and theatre in Ulan-Ude. Petropavlovsk-Kamchatsky will receive a new community centre, and an art museum will be completed in Khabarovsk. We are building new sports facilities in Magadan and Chita.
“An economy of the future that revolves around people”? To be fair, we’re not talking about workers owning the means of production here, and some argue that Russia’s neoliberal bona fides aren’t lacking. There might be some key differences with the West, though. As Alex Krainer points out, in contrast to the UK’s current plan to cut winter fuel subsidies to 10 million pensioners in Britain, one of the first signs that Putin was going to be trouble for the West came in 2000 when he chose the Russian people over the interests of foreign capital:
During [Vladimir Putin’s] first winter as President [in 2000], entire towns and villages across the far east of the country, counting as many as 400,000 inhabitants, lost heating for the lack of coal. A serious crisis emerged with mines shutting down, workers out in the streets and even hospitals ceasing to function because of the cold. But the coal for heating was available in Russia, only most of it was already allotted for export. Vladimir Putin didn’t think that Russian people should suffer freezing conditions all winter in order for that coal to be exchanged for American dollars. He decreed that export of coal be stopped immediately and that all available quantities be sent back to Siberia to fuel the boiler stations. … in Putin’s world, well-being of the people takes precedence over financial profits of the investor class. This concept may seem exotic and alien to Westerners who for a generation had been brainwashed with neoliberal economics where profits trump any and every other concern, including health and well-being of the people. Nonetheless, I believe that beyond the brainwash, every normal person – even western-educated economists – would agree that in a crisis, the decent thing to do would be to take care of the people and let the oligarchs cope with one quarter or a year of impaired profitability of their enterprises.
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While the latest meltdowns in the West include the US launching Russiagate Part II and the Venice Film Festival descending into chaos because of the showing of “Russians at War”, a documentary following the lives of Russian soldiers serving at the front, the rest of the world continues to move on.
Chinese automaker Chery just became the biggest foreign company in Russia after its revenue quadrupled in 2023 to more than $6.63 billion. According to Forbes Russia, 50 of the biggest foreign companies in Russia are now Chinese. That’s up from only one two years ago. The number will likely only grow as Russia and China strategically develop the former’s Far East regions. That’s because Russia has substantial reserves of virtually every commodity required to help a modern economy flourish.
Couple this with China’s manufacturing dominance, and the geniuses at the US State Department really outdid themselves by driving Beijing and Moscow together. The crazy thing is this could be the US investing and helping Russia while US plutocrats helped themselves to healthy profits. Instead they wanted it all, wanted to bring down Putin, and plunder the resources. Lo and behold, Russia and much of the rest of the world is plenty able to move on without them.
Who neeeds the curse of Reserve Currency Status, or The West for that matter, when you see Russia perform as she has in face of Western sanctions. And most ironic part is so many in The West formulating policy against Russia have no clue how spectacularly they fail. Every time I see snippets of US officials demonizing (still) Russia (just look at HRC the other day w/Maddow) I wonder what planet they live. Totally out of touch with the real world.
This is a large scale example of what people can do, with success, on a smaller – local scale. Begin to ignore the media propaganda and the price gouging of Democratic inflation and invest time and energy in building up local connections. Begin small with knowledge and control of the local supply of food and eventually get to the point where you know your local sheriff.
Meanwhile the European core of Russia is bombed daily by NATO and Putin is sitting on his hands because reasons…
Like not wanting to escalate to nuclear war.
Grinding down Ukraine is less likely to produce desperate Western moves. Zelensky made a massive admission against interest in a CNN interview, that Russia is launching 12X as many artillery rounds as Ukraine.
The US is not providing more funding to Ukraine before the election, which means, if the Republicans control either house, or Trump wins, never. You can see as we speak that the EU can’t even get its act together to continue to fund Ukraine. You have Italy having refused to supply arms and more recently Germany because it is out of any surplus.
Ukraine will lose. Russia just needs not fall in for Ukraine goading unless it has the receipts that NATO was involved, If this attack was from an F-16s, those don’t require NATO support. Ukraine could have hired ex-pilots. The wee problem is why Russia didn’t see those birds go up. Other reports say Russia intercepted about half the missiles shot at Tver (other sites were targeted too but Russia looks to have intercepted all those drones/missiles).
The problem is Ukraine still has some agency and has been explicit that it intends to use terrorism to foment panic in Russia.
What IMHO is wrong about your view is you see Putin as weak. I see him as utterly calculating. He’ll sacrifice civilians not to have Ukraine drive the operational tempo or otherwise force his hand.
And you don’t know that Russia is not retaliating. There was a report that the US agreed not to hit targets in Russia if Russia did not provide Ansar Allah with hypersonic missiles. Ansar Allah just used what they said was a hypersonic missile to strike in Tel Aviv. The technology could come only from Russia, Iran, or perhaps North Korea.
Iran’s president denies that Ansar Allah got that missile from Iran, FWIW —
https://www.aljazeera.com/news/2024/9/17/yemens-houthis-file-hypersonic-missile-at-israel-what-to-know
https://www.aljazeera.com/news/2024/9/17/yemens-houthis-file-hypersonic-missile-at-israel-what-to-know
Sorry. I put the same same link twice. Here —
https://ozarab.media/houthi-hypersonic-missile-attack-on-israel-what-we-know-so-far/
The missle on the released video does not look like any Russian/Soviet missile I have seen, but it does look like painted over Iranian stuff.
I totally agree with your analysis.
The major danger to Putin’s calculations is spreading terrorism. We have seen the attempt by Israel to get a reaction from Hezbollah/Iran to draw the US in. Exactly the same attempts are being made by Zelenski supported for extraordinary reasons by Starmer. Missiles and F16s are only the ‘high tech’ end of the spectrum, the enlistment of the inhabitants of Idleb are designed to aim directly at Russia’s citizens. The only hope Zelenski has is to draw the US in. I pray that the Pentagon and the likes of Sullivan stand firm in the knowledge that this would be catastrophic.
The Russian Far East needs in influx of millions of people, its like the US ‘wild west’ in potential. Putin has signed decrees making it very easy for non-Russians to move there with the promise of allocated land for personal use.
Absolutely right. The US needs propaganda to justify escalation and the worst thing VP could do is to rise to the bait. Here in the UK, in the heart of the ancient beast, the majority fall for the bullshit that is peddled daily – that Russia is weak and nasty. The cultivated mindset is such that people WANT to believe that Russia is evil and President VP is the devil – good v evil is the last resort of the warmongers. It means people don’t look at facts and arguments and thereby rule logic, debate and diplomacy out. Putin has so far played his hand well in the circumstances. If BRICS develop we will see a complete change in context for the west – and one in which it will be much easier to demonstrate that unconstrained capitalism and imperial domination is the cause of so much conflict in the world. The UK used to be good at diplomacy. Now it is shite. And nothing will change until the US is forced to take a very cold bath…
You should read Glenn Diesen’s article from today’s links. Really.
Russia said that if NATO expands to Ukraine, there will be a war. Here we are, and people say Russia doesn’t have “red lines”.
Russia said that if Ukraine hits Russian refineries, there will be retaliation. Now 85% of Ukrainian power production is destroyed, and people say Russia doesn’t have “red lines”.
Russia said that if west and Ukraine won’t respect the Black Sea deal, it’s off. It’s off and Ukrainian harbors have been mostly destroyed, and people say Russia doesn’t have “red lines”.
Russia said that if west provides Ukraine with tactical missiles, there will be repercussions for the west. Now North Korea and Iran are in from the cold, while USA and France are being driven out of the Central Africa and people say Russia doesn’t have “red lines”.
I guess it’s all just pure coincidences then…
Russia doesn’t have “red lines”, but it does have some “reactions to actions”, and those are never along the lines drawn by western expert’s understanding of Russia. It’s like those Rooskies just don’t want to play ball, and do what they are supposed to do.
You should try writing a complaint letter to the manager Putin himself, because he does not read comment section here. He just comes to check daily links selection.
There is this posting on MMT. As such, I really don’t understand all this call for foreign investment from the part of the Russian State. Is it because some equipment, machinery, technology, etc. needs to be aquired from outside Russia and thus needs to be paid in foreign currency, which only outside investors can reliably bring to the table?
Imo mmt is useful when domestic resources are available.
Russian unemployment is likely very low, there’s a war on and putin wants the vast Siberia developed now. The big projects require vast man hours, not just boots on the ground but planning/designing/engineering etc, as well as extensive manufacturing. China/India can provide a lot of that, and seems they are. Putin is successfully engaging all asia ex-eu rump to the task in spite of sanctions. While defeating nato and under vast western sanctions.
The contrast with our warmongers’ expectations is blinding.
The main thing most of the foreign policy establishment misses is countries like Iran, Russia, China have very ancient civilizations solidly established over nearly a thousand years in Russia and many thousands of years for Iran and China. This gives a solid foundation to these countries the US intelligentsia simply is unable to understand due the very poor liberal arts education (where it exists) in the USA (due to destructive academic ideologies) and, increasingly, in the rest of the Empire. People in older cultures are less likely to wave if they face a crisis. Russia is able to use the built-up storehouse of cultural capital to upgrade the country and/or make enormous sacrifices. Russia’s resurrection from the looting by gangster (Russian and from the Empire) in the 90’s was extraordinary–all it took is a great leader on the level of a Bismark (I think Putin is even more important) to pull out of the disaster of the 90’s.
Putin and his leadership team are very creative and imaginative in their policies. So, their cautious managing of the Ukraine War is, in my view, laudable because they understand that the leadership in the West is slow, dumb, and dumber and relies on emotional appeals to their subjects and “cover-your-ass” careerism in their pathetic leaders rather than reasoned arguments in conducting their wars. All the smart people in intel and the military in the USA are on the outside meeting with Judge Napolitano not the bureaucracy and not able to have any input in the foreign policy community which acts as a headless chicken running down the road to God knows where. Meanwhile Russia looks to meet real needs for its own people and the people of the world.
Bismark is an excellent comparison, but Putin has been forced to react more than initiate. Putin has certainly handled a very difficult situation well.
Agreed and good comment. Unfortunately, it makes me much more nervous that the US will feel the need to pull the trigger sooner as they see the tide go out.
Also wanted to say: Excellent write-up Conor. A must re-read later in the evening.
In retrospect I think we’ll be able to say that the US could’ve beaten China and/or Russia, but they started a thousand years too late.
Wonderful article. Shoutout in particular to the map and its inclusion of the mysterious “Jewish Autonomous Oblast.” I would love to be able to wander this region and take the train. Destiny is being fulfilled.
Yes. Great information. The maps were very clear. I’ve never been aware of just how far south both Vladivostok and the tip of Kamchatka are. And the northern sea routes look established. This summary of the current state of Russia is amazing. It really does sound like the Wild West on steroids. And for all the development going on, 34 trillion rubles doesn’t sound like a lot. I think I understand why our dear leaders are so freaked out. But now it is puzzling that we were the ones demanding a separate bank settlement system between us and the rest of the world. It’s self-containment, which is bad for capitalism.
Just as a minor illustration of what the Russians have for the Northern Route. A few icebreakers.
IIRC, Russia is using “50 Years of Victory” a nuclear icebreaker, for tourist runs to the North Pole.
Yep. Ice bath included.
https://odysee.com/@RT:fd/northpole2408:3
Yep. Ice bath included.
I tried to post link to RT video hosted on odysee.com (RT is unavailable on Youtube), but it does not appear. Anyone interested in seeing it, can just add “@RT:fd/northpole2408:3“ (without quotes) to the odysee hompage URL. The video is titled: RT crew goes to the North Pole with Russian nuclear-powered icebreaker.
I am seriously impressed by the amount of research that has gone into this post. As well, I am seriously impressed by all that infrastructure being built out. Here in the west we only hear about the war in the Ukraine, war in the Middle east and the occasional climate disaster. Meanwhile whole regions of the planet are being opened up and developed in the same way that the US did after the end of the Civil War or after WW2 but where we live we are looking in the wrong direction. In reading over it for a second time, I had the feeling that here in the west we have missed the train. It is going full speed ahead while we remain stuck on the platform. In another timeline we could have helped develop and invest in all these development and reaped the benefits. Alas, that is another timeline.
I am seriously impressed by the amount of research that has gone into this post.
Mr. Gallagher does good work.
I used to be a journalist and one reason I quit was the increasingly strong feeling of “No good deed goes unpunished” I got when I did serious research to understand what was really going on and the result got rewritten because it (a) contravened the party line or (b) was too much work for editors, or merely copy editors, to get their lazy little minds around.
Sounds similar to my experience in journalism, and one of the many reasons NC is such a breath of fresh air.
At the end of the Cold War, the Western world had the opportunity to integrate Russia into the world’s economy. Russia desperately wanted to be a part of the Western world and looked up to the Western world. So too did China. At the time, they admired the living standards of the average Western citizen, which today are falling.
What the Western elite wanted was to loot the world. Freed from fears of Communism, they destroyed the last remnants of Social Democracy and unleashed a second Gilded Age in their own nation’s. That’s what we are seeing with the outsourcing of the manufacturing sector and the erosion of the welfare state. Meanwhile, taxes for the rich and corporations were cut. Other forms of looting, like stock buybacks, private equity, management consulting, and financial instruments.
They did the same to Russia. Within Russia, the West rigged the elections so that their chosen kleptocrat, Boris Yeltsin would win. The reason why they hated Putin so much is because he has stood up to the Western backed oligarchs that helped the West loot Russia. He restored Russia, improved the living standards of the Russian people, and unlike the politicians in the West, actually acted in the best interests of their people.
This proxy war has been the attempt by the West to regime change Putin and ultimately, to Balkanize Russia by getting another Boris Yeltsin into power in Russia so that the West could again steal its natural resources and practice colonialism. The Russian economy proved far more resilient, Western military equipment far weaker, and the Russian military far stronger than planned. Furthermore, the Russian people, far from opposing Putin have rallied for Russia and in many cases, Putin is facing criticism that he is too soft on the West.
Right now, it seems the most urgent issues facing Russia are to manage its post-war economy. Note how Putin is far more concerned about BRICS and the post-war state of Russia than anything else – Ukraine is in a situation like 1944 Germany, in the middle of a collapse. There will be a lot of rebuilding and Russia will have to confront its demographic challenges.
Another issue is that the Russians and Chinese have to manage the decline of the West in a way that minimizes the risk of nuclear war. It will be all for naught, if an irrational Western elite, out of spite, choose nuclear war rather than to lose their hegemony over the world. Western Last weekend, the Biden administration held off on authorizing long-range strikes into Russia. Scott Ritter indicated that this risked escalation into nuclear war. That is an encouraging sign. The Western elite are evil and greedy, but don’t want to perish in a nuclear war.
Had the Western elite chosen otherwise, Russia and China might have been integrated into a Social Democratic-led Western world. Over time, a resurgent China would have overtaken the West, but the transition would have been peaceful. Instead, the West chose to try to hold onto hegemony and to build a plutocracy pretending to be a democracy. Western living standards are no longer envied because the greed of the West has ensured that many Western citizens face poverty at developing world levels, while Western foreign policy is now a source of global anger towards the West. Like so many other empires in history, the West is now in self-inflicted terminal decline.
The Russian State has been forced to respond creatively to the Western challenge.
The neoliberal economy and state in the US, on the other hand, seem to be a poor tool for creating the power to respond to the exit of Russia and China from the global order. A creative response to defend US primacy seems to have been replaced by financialization plus propaganda. We’ll see, but a Cold War-style US mobilization would require upsetting too many domestic applecarts for them to pull it off. It looks as if they are headed straight toward national failure.
Propaganda, aka soft power. The most powerful tool USA ever had. The mighty hammer that made USA great, and everyone else wanting to be American. I guess it wore off from flailing around too much, and seeing everything as a nail.
in Putin’s world, well-being of the people takes precedence over financial profits of the investor class. This quote caught my eye. The degree of accuracy is debatable, nevertheless “financial profits of the investor class” seems to be a main cause of my hydra-headed existential crisis.
On the Northern Sea Route – there are two more important components here that you did not mention.
The first was brought to my attention by Russian TV news programs during Putin’s visit to North Korea. It seems that the northern-most ice free year-round seaport on the East Asian coastline is located in North Korea, I think it’s now called Rason but used to be called Rajin. It’s right next to the border with both China and Russia, and the Russians claim that the Chinese are already building a rail link to it from their side. Presumably, the new Russian rail and road investments announced during Putin’s visit will aim at that port as well.
So really, the only way the Northern Sea Route works is if it’s Chinese ships moving out of a North Korean port escorted by Russian ice-breakers. Or something to the effect. Now, I still have questions as to where those Chinese ships will be going, for example, if the US forces Europe to cut off its Chinese trade because democracy and freedom. But my point is that, barring further climate change, North Korea is the key to the whole enterprise, and Russian investments in the Far East will likely have to extend to North Korea one way or another.
Another point, also by way of Russian TV news (available only-sometimes-with-English-subtitles at the Smotrim.ru portal), is that if you look at the map of Siberia, for now, the huge northern coastline stretch from Chukotka westward is extremely underdeveloped. And the interior off that coastline too, of course. Most of the cities, railroads, and industrial or resource extraction areas, are actually along a “belt” in the south of Siberia, you can see it on maps like this one (https://www.worldometers.info/img/maps/russia_political_map.gif).
Meanwhile, there is a metric megaton of natural resources up in the north of Siberia, and, on top of that, the Northern Sea Route will need multiple coastal bases on top of existing ones, for refueling or repairs, for example. So what Putin did not say quite openly, but what is already starting to be discussed in public, is that you’re going to need humongous infrastructure investments (some already being made by private companies) to develop that hitherto mostly untouched area of the country. With the biggest limiting factor, interestingly enough, being population – there is a reason why Putin, when asked at the EEF, what his criterion for success for the Far East investment would be, replied simply, population growth.
Isn’t Vladivostok an ice-free port? The Russians and Chinese can cut out the middleman. I imagine the point of the NK option is to give each of China and Russia a polite alternative to the other.
Only way the Northern Sea Route works…????
The Arctic Route’s “Working” already for CHN. Don’t need much Icebreaker support during the Summer; and they’re in talks to do that Year ’round with Icebreakers.
CHN don’t need to operate out of the PRK Port…
Read a Map of the Region before you Post…
Considering the Time and Costs saved instead of taking the Red Sea/Suez or South African Route – it’s doable.
IIRC, RUS have been employing that PRK Port for some time now.
Vladivostok may be iced in over the Winter; but the PRK and CHN Ports are available to Russia.
Excellent article and comments here.
A few decades ago, I was a student of Russian history and learned much about Russia’s economic potential. I am grateful to be alive to witness the country moving towards meeting that potential– what a show!
I am astounded by the ignorance, self-delusion, and utter lack of foresight displayed by many “leaders” in the west when it comes to knowledge of Russia and in their relations with the country. It really seems breathtaking, actually.
Eventually the west will come under new leadership, but I fear the road that we will be taking to get there.
Brilliant article. Very impressed. I wonder if there is a single member of Der Starmer’s government capable of reading this article without moving their lips, let alone understand the implications these developments have for the economic and social wellbeing of the British people.
We recently had the Ig Nobel awards, but we need to invent a whole new category of complete stupidity for the American neocons that lite a fire under BRICS and torpedoed the EU.
Bravo! You [family blogging] idiots! And kudos for over twenty years of being disastrously wrong in every war you got America into and then lost.
Each of the world’s major river systems are associated with major oil basins. Four of the ten largest river systems flow into the east Siberian arctic Sea. My SWAG is there are huge hydrocarbon reserves. Given the world’s state – zero chance of the West arguing for them to stay buried.
I do have issues with The Bell’s argument that inflation is a massive Russian problem when there are massive inflation problems in the West—getting worse due to the loss of cheap energy. Today, I went out for a veggie burger at a local burger joint and a salad for my wife (the first since COVID-19), and it was 40 bucks!!
Inflation is a serious problem here nonetheless, even if it’s not as bad as in the West. It is what affects the majority of Russians the most out of all recent developments, even though it is very far off from the longed-for socio-economic collapse.
My point, is that its a global problem from Covid19 overly thinning logistic chains and retiring/ killing a significant portion of the worforce.
Interestingly, I do not see the same inflation problem in components I source from China, though once they hit the US border, the price now jumps way more than it did pre-covid. So blaming it primarily on the war economy is highly misleading to stay on narrative.
No Mention of RUS’ “Power of Siberia” Pipeline Projects fueling CHN.
These Projects were planned before the SMO started in 2022; and were simply enhanced, with more under discussion.
Add the Hydrocarbons being shipped from the Arctic to Asia, CHN, JPN(already committed to Sakhalin Projects), RCEP_Asia, and SCO should have plenty to work with – WITHOUT using the PetroU$Dollar Exchanges…
The great error of the West by sanctioning Russia is the result of centuries-old mercantilist thinking. We no longer live in a world where the greatest national good is seizing gold from abroad or profiting from merchant enterprise. Warren Mosler of MMT said that the best way of thinking is to view exports as sending gifts to the world and imports as receiving gifts. Russia has enough internal resources so that sanctions are just the inconvenience of not receiving imports. Russia is enough self-sufficient so as to not need much from outside, and not exporting gas and oil just means more for later.
All the sanctions do is reduce global trade and are simply selfish and mean.