eli5 – Russia has an economy smaller than Canada or Italy. How does it continue to be a threatening, great power without going bankrupt?


eli5 – Russia has an economy smaller than Canada or Italy. How does it continue to be a threatening, great power without going bankrupt?

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It spends a much larger fraction of its GDP on its military than Canada or Italy. The latter are rather peaceful western countries having defense treaties with the world’s most expensive military, the USA.

Because its commodities are valuable, its energy supply provides political and economic leverage over the EU and its not exactly a free market so takes what it needs to get things done. Russia has invested heavily in espionage and cyber warfare/cyber corruption both massively state sponsored. Also, its strategic locations span the entire northern hemisphere and it has lots of boots/metal on the ground.

Russia spends 3x times more of it’s Budget on the military than countries with a comparable economy, so it has far more military hardware and personnel. They also have mandatory military service.

The export a great deal of hardware from guns, vehicles, tanks, and airplanes to other nations which helps justify their RnD budget.

They also have huge amounts of surplus hardware left over from the Soviet Union. A lot of hardware the Russians are using is very old and much of the new state-of-art equipment they flaunt is in very short supply.

Throughout the 90s the Russian military was crumbling and it’s only in the past decade that they are really starting to turn around their military deficit.

There F-22 killer SU-57 for example only has 2 functional examples, and 10 prototypes (most of those unserviceable).

Where the Russians excel is in their espionage and Cyber Warfare divisions. They are way ahead of the US in this regard with the State highly likely to be sponsoring, or at least turning a blind eye, to the various hacker groups operating in the country so that they can build up a pool of resources they can use in a cyber war.

That and the FSB (formerly the KGB) has always run circles around the West in terms of espionage.

The Russians aren’t competing with the West nearly as much as they used too either. Now it’s about power projection in the 3rd World. The Russians what to maintain their influence on various nations in the Middle East and Eastern Europe both to have countries to supply with arms, but also so that they can do what they want in that area without reprisal from the West.


Many of the giant world super powers have two things in common: large military and nuclear weapons

Russia has inherited most of the infrastructure of a 20th century superpower – they have the experience, the scientific capacity and nowadays the resources to continue on that inheritance. They are a great military power, scientific power, sports power, space power the list goes on…

Not to mention they are leaders in hypersonic weapons development and already have some of them in active service. They hold the biggest a and most modern arsenal of nuclear weapons. It’s another myth that it is an outdated Soviet stockpile since for the last decade it has been almost fully modernised as Russians focus greatly on their nuclear strategic triad for deterrence and strategic parity with US.

They have a formidable space force which is a nerve centre for air and space military assets. Own Global Positioning System – GLONASS.

Their focus on nuclear triad is the reason for their large modernised submarine fleet both nuclear and conventional with both strategic nuclear payload, conventional and hypersonic.

More recently their espionage and computer network hacking military divisions have been creating havoc in the west.

Indeed they are second only to US military hardware exporter with major clients such as India and China.

Russia and Putin in particular like many of his generation see Russia as a great power and an equal to US in many aspects with a duty and desire to maintain their influence in their historic lands which includes former USSR countries with large Russian ethnic minority groups. Also thanks to USSR Russia has almost fully restored bilateral relationships with all former allies of USSR to one extent or the other, giving it a foothold in those countries and regions of the world.

It’s a myth that Russian economy is a size of Italy since westerners for simplicity reasons look at nominal US$ GDP figures which are extremely misleading. Russia has biggest economy in Europe of US$ 4.5T on PPP (purchasing power parity) basis. With annual military spending of US$ 150-200B in PPP terms. PPP terms for Italy, France or UK may not make too much difference but for countries like China, Russia and India it provides significant competitive advantage due to the procurement of military hardware locally using Roubles and avoiding any need for US$ exchanges. This is beside many other military spending that are not officially mentioned by the government.

It’s a permanent member of UN Security Council – one of only five with power of veto.

Their economy is also very well shielded from sanctions and external factors such as huge foreign exchange reserves, low government debt, low unemployment rate, excellent central bank and stable if not fantastic growth. It is also in many ways self sufficient – they are a top grain exporter, energy superpower, with big precious metals reserves, diamonds and other natural resources. Economy is high-tech with leading Internet services such as Yandex and Rambler. There is also a strong civil manufacturing sector ranging from heavy machinery, trucks, cars to airplanes.


They also have many issues such as social, demographic, skilled labour availability among others.

TL;DR – nukes, a big army, and the will to use force, all funded by selling oil and commodities.

If you get a chance, read the book “Prisoners of Geography” by Tim Marshall.

Basically Russia has a lot of borders with a lot of countries, isn’t very well protected by natural geography (like mountains), and until Crimea had no ports with year round ocean access.

A s**t-ton of energy/resources, a s**t-ton of nukes, a capacity for strategic thought and a f**k-off geography that straddles and connects Europe and Asia.

Also the demi god Putin and his 1000 year reign.

The trouble nowadays is that these psychopaths like Putin and Jinping have forgotten in their hubris and relatively successful asymmetric war is that in a shooting war, both would be absolutely fucking wrecked up against the west, I hope they have people who remind them of that occasionally before we are forced to but make no mistake, it wouldn’t even be fucking close

People have already mentioned their spending, but an important aspect to understand is Maskirovka


Denial and Deception is official Military Doctrine of Russia.

They don’t, but spending a fuckload of stolen cash on propaganda and US needing a big bad enemy that they “can’t” fix, helps.

Russias economy is smaller than Canada or Italy in terms of nominal GDP.

However, when we adjust the economy by PPP (Purchasing power parity), ie how much work and how many bodies you can buy with that money inside the country. Then it’s a somewhat different story.

Adjusted for PPP Russias economy is about twice the size of Canadas. On top of that Russia is spending much more of its economy on the military (20% of government spending). Canada could also do that, if it was willing to reduce citizen access to public services and shifts its economy to a more warlike stance. So effectively Russia is spending 20 times what Canada is doing on its military in terms of internal economic muscle. The russian military is also mainly conscripted, so while Canada pays some $40000 a year the pay for your average russian conscript is $360 a year plus food, housing and clothing.

So to sum it up. Russia can continue to be a threatening power because its citizens are willing to accept worse conditions (less consumer goods, smaller housing, worse service and medical care, fewer freedoms and greater sacrifices) and it can much more effectively leverage its economy towards national production of military hardware.

Are they though? They’re rich with oil and gas so other countries tip toe around them to not upset their fuel delivery arrangements and they are good with cyber “terrorism” but their military is full of old useless gear and they don’t have enough personel/gear/money for an actual war. That’s why they do the internet thing instead. They also have nukes so there’s that.

They have the will to do it.

Canada or Italy isn’t willing to spend as much on military, and neither is everyone around Russia.

Or in the case of Poland, they can’t build up the forces quick enough to make a difference.

Russia isn’t a global threat. Survey after survey finds most global citizens see the USA as the greatest threat. Russia is just the Democratic Party’s boogieman.

There are a few reasons. First, they are one of the few nuclear states in the world. Second, they have a permanent seat on the UN Security Council and so they can veto UN sanctions and military intervention that’s against their interests. They are very they can’t compete with the USA, China, or the EU economically, but that’s not their strategy.

It is a trade-off.

Being threatening great power costs a lot and is not necessarily worth.

Eventually it will become bankrupt if continues doing that, which is at the end of day what ended USSR.

Russian economy cannot be measured from the government coffers as that exists only as a vehicle to transfer wealth to the people that run (own) it.

You would have to tally up the wealth of Putin and all his cronies to come to a real estimate if Russian power, you can’t do that because this wealth is spread around the world is states that guarantee financial secrecy.

They basically spend a very large part of their budget on their military plus young men are conscripted meaning they have a very large military overall. Off course this goes at the cost of their economy but the Russian government really doesn’t care since anyone somewhat remotely important is most likely very rich already.