eli5 – Russia has an economy smaller than Canada or Italy. How does it continue to be a threatening, great power without going bankrupt?
In: 808
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.
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