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We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. I’m honestly confused by the

by nikanj 8y ago

We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. I’m honestly confused by the real status of their economy.

otoburb 8y ago
Wouldn't that sort of make sense that if Russian cash is floating around the rest of the planet then there's less of said wealth circulating within the Russian domestic economy?
kvartz 8y ago
Economy failing->as result currency falls. If one would want to move said currency to USD or gold, it would be shady; especially given level of corruption and barriers from banks and state to move currency internationally. Makes sense to me.
kartan 8y ago
> We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. There are 144.5 million Russians. Even if individually they are poor the country can be very rich. Also is the matter of illegal arms sales and break of international embargos. You can sell your gas or weapons to countries that you have signed treaties not to. That is a lot of money that is not part of your legal economy but can surface anywhere in the world. High wealth inequality also makes this a more acute problem. A few people have a lot of money to spend in lobbying and luxury while most of the population lives in relative poverty.
avmich 8y ago
I've heard estimates of ~2T left country over ~10 years - this kind of money supposedly surfaces around, about half in US, a lot in UK. The economy is heavily linked to oil and gas prices. This is a sort of "specialization" of the country - with exception of arms and some space tech, other sectors of economy are in rather modest shape. Recent estimate was that productivity is behind leading countries by a few decades (e.g. as it was in US in 1980-s).
RomanPushkin 8y ago
The real status is economy disaster, and wealthy kleptocrats are stealing more and more, moving their families and stolen capital to US, UK, EU. There is some tension in society, and we're trying to fix it from the bottom (with no too much luck though).
- ggm 8y ago
  Cyprus?
  - chupasaurus 8y ago
    Nah, GP talked about thieves who have a possesion of $100M and more, Cyprus is out of competition for them. It is one of target countries for upper-mid class to move out and start business in more civilized environment but cheaper than in western Europe.
- arsenico 8y ago
  Well, there's zero to none tension in the society if we're being realistic.
rdtsc 8y ago
It does kind of makes sense. The planet is flush with shady Russian cash partly because it was laundered, stolen, transferred outside the country. As opposed to going back into it to improve the infrastructure, education system and other things. If you don't see the poor pensioners and other people in the remote corners of the country and only see those who can afford to take weekend shopping trips to NY, you might get the impression that the economy is doing ok. From Wikipedia: https://en.wikipedia.org/wiki/Economy_of_Russia https://en.wikipedia.org/wiki/Economy_of_Russia > One study estimates that "the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia."[43] There is your average run of the mill wealth inequality and then there is the Russian level of wealth inequality in its own special category.
- forgotmysn 8y ago
  China's wealth inequality might be in that category as well
curiousjorge 8y ago
well, isn't it obvious? Putin funnels billions out of state owned assets, a Russian lawyer gets tortured to death for uncovering the largest tax fraud committed by....state officials...who were allowed to investigate their own crimes....just read The Red Notice
Nokinside 8y ago
economy != money and assets Economy is the money circulating in within the country. Wages, sales, investments.
ggm 8y ago
An economy of scale has value measured in trillions. A trillion is 1000 billion. If I succeed in stealing 0.01% of something in trillions, I have x times 100 millions. I think we can assume that inside this economy, theft significantly north of 0.01% is taking place. For reference my partner ran a small independent bookshop and she worked on 1% theft of stock as a rough model. For "theft" read "oh I dropped it in a puddle, the book is now filthy and unsellable, I shall keep it and use it for .. nevermind" Tax compliance in Greece was figured at below 50%. Tax -avoidance- [edit: wrong. evasion] (not tax minimisation) is theft from the state. If a modern western economy inside the EU has less than 50% compliance on tax, what do you think the post SU states have? What is the value of an illegally exported tank? Barrel of oil? A Tonne of industrial diamonds? Cobalt? If you lived in an economy which was so physically large most of its visible ocean borders were probably un visited 99% of the time, and you had a megatonne of industrial diamonds.. what would you do?
- robocat 8y ago
  > Tax avoidance (not tax minimisation) is theft from the state. Tax avoidance is OK. It's tax evasion that's illegal. https://en.m.wikipedia.org/wiki/Tax_avoidance https://en.m.wikipedia.org/wiki/Tax_avoidance
  - ggm 8y ago
    Sigh. Sorry. fixed. Wish we had -markdown- for corrections.
- vkou 8y ago
  Was tax compliance in Greece below 50% across the board, or was it below 50% for <particular segments of the population>? How incompliant were those 50%? I can believe that 50% of, say independent handymen contractors may have been swindling the government of some part of their taxes. I have a much harder time to believe that 50% of the entire population was. (Especially given that ~50% of the population - children, pensioners, and the unemployed, aren't even supposed to pay much in the way of taxes.)
  - 8y ago
baybal2 8y ago
I left the country in 2007. At the time, it already felt that the situation and the speed at which it deteriorates was approaching the level where you talk not about emigrating out of the country, but evacuating it asap on the nearest flight. We felt fear living every day back then. When I first returned to Russia 8 years later in 2016, it was a completely different country, it wasn't the Russia I knew at all. Best way to call how it felt was "North Korea with Starbuckses" The median net income in China has long surpassed that of Russia, and that holds even if you include China's decaying rural regions. If you exclude them, and hold the assumption that Chinese taxes don't simply disappear in thin air, it really begins to look dire.
jerguismi 8y ago
Also in poor countries there are still lots of rich people. Being a poor country just means that the average person is doing badly.
trhway 8y ago
>We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. a very mild by Russian corruption standards - everything in the open with US government and the US Big Space involvement and with no black money/crime/etc - deal illustrating how good profits/cash are separated and, no laundering needed, placed into US while expenses/losses are left with Russia economy : https://www.businessinsider.com/r-special-report-in-pentagon-deal-with-russians-big-profit-for-tiny-florida-firm-2014-11 https://www.businessinsider.com/r-special-report-in-pentagon...
dmos62 8y ago
That's a good observation. Same thing is actually happening with China. The capital flight, as it's called, is caused by capital being moved away from an economy to protect it in case it fails. It's a serious indicator of serious trouble (in the originating economy).
vbezhenar 8y ago
It's not in shambles. Your sources are lying to you if that's what you're hearing. Economy is not in a well state and definitely worse than few years before, when oil sold for much more, but there's nothing very bad about it and it's improving. Sanctions actually helped a bit with economy by providing advantage for internal production.
ionised 8y ago
State/publicly-owned assets were co-opted/stolen/gifted by oligarchs at after the collapse of the Soviet Union. Assets and funds that should have found their way into the public coffers were given away or 'sold off' in an obscene case of plutocrats plundering the wealth of the people. The beneficiaries of this massive transfer of wealth are now the ruling class of Russia. They're no better than gangsters. Russians are poor, but their 'leaders' are rich beyond imagination, and it was all stolen from the people they are supposed to be serving. Russia is the embodiment of modern kleptocracy.

by nikanj 8y ago

We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. I’m honestly confused by the real status of their economy.

otoburb 8y ago

Wouldn't that sort of make sense that if Russian cash is floating around the rest of the planet then there's less of said wealth circulating within the Russian domestic economy?

kvartz 8y ago

Economy failing->as result currency falls. If one would want to move said currency to USD or gold, it would be shady; especially given level of corruption and barriers from banks and state to move currency internationally. Makes sense to me.

kartan 8y ago

> We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. There are 144.5 million Russians. Even if individually they are poor the country can be very rich. Also is the matter of illegal arms sales and break of international embargos. You can sell your gas or weapons to countries that you have signed treaties not to. That is a lot of money that is not part of your legal economy but can surface anywhere in the world. High wealth inequality also makes this a more acute problem. A few people have a lot of money to spend in lobbying and luxury while most of the population lives in relative poverty.

avmich 8y ago

I've heard estimates of ~2T left country over ~10 years - this kind of money supposedly surfaces around, about half in US, a lot in UK. The economy is heavily linked to oil and gas prices. This is a sort of "specialization" of the country - with exception of arms and some space tech, other sectors of economy are in rather modest shape. Recent estimate was that productivity is behind leading countries by a few decades (e.g. as it was in US in 1980-s).

RomanPushkin 8y ago

The real status is economy disaster, and wealthy kleptocrats are stealing more and more, moving their families and stolen capital to US, UK, EU. There is some tension in society, and we're trying to fix it from the bottom (with no too much luck though).

ggm 8y ago
Cyprus?
- chupasaurus 8y ago
  Nah, GP talked about thieves who have a possesion of $100M and more, Cyprus is out of competition for them. It is one of target countries for upper-mid class to move out and start business in more civilized environment but cheaper than in western Europe.
arsenico 8y ago
Well, there's zero to none tension in the society if we're being realistic.

rdtsc 8y ago

It does kind of makes sense. The planet is flush with shady Russian cash partly because it was laundered, stolen, transferred outside the country. As opposed to going back into it to improve the infrastructure, education system and other things. If you don't see the poor pensioners and other people in the remote corners of the country and only see those who can afford to take weekend shopping trips to NY, you might get the impression that the economy is doing ok. From Wikipedia: https://en.wikipedia.org/wiki/Economy_of_Russia https://en.wikipedia.org/wiki/Economy_of_Russia > One study estimates that "the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia."[43] There is your average run of the mill wealth inequality and then there is the Russian level of wealth inequality in its own special category.

forgotmysn 8y ago
China's wealth inequality might be in that category as well

curiousjorge 8y ago

well, isn't it obvious? Putin funnels billions out of state owned assets, a Russian lawyer gets tortured to death for uncovering the largest tax fraud committed by....state officials...who were allowed to investigate their own crimes....just read The Red Notice

Nokinside 8y ago

economy != money and assets Economy is the money circulating in within the country. Wages, sales, investments.

ggm 8y ago

An economy of scale has value measured in trillions. A trillion is 1000 billion. If I succeed in stealing 0.01% of something in trillions, I have x times 100 millions. I think we can assume that inside this economy, theft significantly north of 0.01% is taking place. For reference my partner ran a small independent bookshop and she worked on 1% theft of stock as a rough model. For "theft" read "oh I dropped it in a puddle, the book is now filthy and unsellable, I shall keep it and use it for .. nevermind" Tax compliance in Greece was figured at below 50%. Tax -avoidance- [edit: wrong. evasion] (not tax minimisation) is theft from the state. If a modern western economy inside the EU has less than 50% compliance on tax, what do you think the post SU states have? What is the value of an illegally exported tank? Barrel of oil? A Tonne of industrial diamonds? Cobalt? If you lived in an economy which was so physically large most of its visible ocean borders were probably un visited 99% of the time, and you had a megatonne of industrial diamonds.. what would you do?

robocat 8y ago
> Tax avoidance (not tax minimisation) is theft from the state. Tax avoidance is OK. It's tax evasion that's illegal. https://en.m.wikipedia.org/wiki/Tax_avoidance https://en.m.wikipedia.org/wiki/Tax_avoidance
- ggm 8y ago
  Sigh. Sorry. fixed. Wish we had -markdown- for corrections.
vkou 8y ago
Was tax compliance in Greece below 50% across the board, or was it below 50% for <particular segments of the population>? How incompliant were those 50%? I can believe that 50% of, say independent handymen contractors may have been swindling the government of some part of their taxes. I have a much harder time to believe that 50% of the entire population was. (Especially given that ~50% of the population - children, pensioners, and the unemployed, aren't even supposed to pay much in the way of taxes.)
- 8y ago

baybal2 8y ago

I left the country in 2007. At the time, it already felt that the situation and the speed at which it deteriorates was approaching the level where you talk not about emigrating out of the country, but evacuating it asap on the nearest flight. We felt fear living every day back then. When I first returned to Russia 8 years later in 2016, it was a completely different country, it wasn't the Russia I knew at all. Best way to call how it felt was "North Korea with Starbuckses" The median net income in China has long surpassed that of Russia, and that holds even if you include China's decaying rural regions. If you exclude them, and hold the assumption that Chinese taxes don't simply disappear in thin air, it really begins to look dire.

jerguismi 8y ago

Also in poor countries there are still lots of rich people. Being a poor country just means that the average person is doing badly.

trhway 8y ago

>We constantly hear the Russian economy is in shambles, but at the same time the whole planet seems flush with shady Russian cash. a very mild by Russian corruption standards - everything in the open with US government and the US Big Space involvement and with no black money/crime/etc - deal illustrating how good profits/cash are separated and, no laundering needed, placed into US while expenses/losses are left with Russia economy : https://www.businessinsider.com/r-special-report-in-pentagon-deal-with-russians-big-profit-for-tiny-florida-firm-2014-11 https://www.businessinsider.com/r-special-report-in-pentagon...

dmos62 8y ago

That's a good observation. Same thing is actually happening with China. The capital flight, as it's called, is caused by capital being moved away from an economy to protect it in case it fails. It's a serious indicator of serious trouble (in the originating economy).

vbezhenar 8y ago

It's not in shambles. Your sources are lying to you if that's what you're hearing. Economy is not in a well state and definitely worse than few years before, when oil sold for much more, but there's nothing very bad about it and it's improving. Sanctions actually helped a bit with economy by providing advantage for internal production.

ionised 8y ago

State/publicly-owned assets were co-opted/stolen/gifted by oligarchs at after the collapse of the Soviet Union. Assets and funds that should have found their way into the public coffers were given away or 'sold off' in an obscene case of plutocrats plundering the wealth of the people. The beneficiaries of this massive transfer of wealth are now the ruling class of Russia. They're no better than gangsters. Russians are poor, but their 'leaders' are rich beyond imagination, and it was all stolen from the people they are supposed to be serving. Russia is the embodiment of modern kleptocracy.