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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According to GDP(PPP) the Russian economy is around the size of Germany or the 5th biggest economy in the world(not that far from Japan that has similar population)
Russia has a large trade suplus and very low debt to gdp ratio of less then 20%.
The the Russian goverment has a large soveriegn wealth fund and large gold and cash reserves that allows it freedom to act on the international stage.
Russia has a smaller economy than Canada or Italy measured in US dollars.
Both Canada and Italy regularly trade with the U.S. and as such one can image that the dollar exchange rate represents a valid measure to convert their respective currencies to US dollar as a mathematical exercise.
The trade between the U.S. and Russia is not as free and not as important and as such the exchange rate does not necessarily represent a true conversion of currencies, and rather a consequence of current political situation.
If we were to, let’s say, measure economic activity in terms tonnes of concrete, professional work hours, able bodied men in case of war or kilometres of railways built and maintained Russia would probably be equal to the U.S., and China far surpass the U.S..
All comparisons are heavily dependent on what you measure in, and how you measure, especially for such complicated matters as economies.
Outside of western propaganda, control of gas reserves, particularly natural gas, gives great influence in the area.
Propaganda.
Russia is a regional power with nuclear weapons, so they’re certainly not weak. But a big part of why the west presents them as such a big threat is because it’s useful if the populace believes that. No healthcare, unaffordable housing, stagnant wages, and an interventionist military doctrine. All these concerns become secondary if we just convince everyone that there are big evil countries out there that want to destroy the world. The US spent 20+ years fighting ‘terrorists’, now the people are getting tired of it, so a new boogeyman is needed.
Russia has developed military might not just by spending billions on defense but also with diplomacy which date backs to Middle ages…they had defeated the Mongols and at one point have lands on Europe, asia, & north America.
Personally I think the leadership is often overlooked. People forget that Putin was the head of the kgb. Which means he rose to the top of arguably one of the worlds most treacherous organization of killers and was impeached or something if I remember correctly and REGAINED THE THRONE so to speak. The kgb were no dummies. He has probably the highest iq out of all the world leaders and certainly the highest personal body count. If I were trump or ANY of the leaders I would treat him just like he is: a fucking dangerous deceptive animal that will kill you.
In purchasing power, it is the 6th largest economy of the world. They have vast natural resources and a huge industrial base.
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.
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.
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.
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