3 ms·

>That gas, oil and coal are means for missiles and hired mercenaries. Russia is not a banana republic where you could possibly find the direct link between the

>That gas, oil and coal are means for missiles and hired mercenaries. Russia is not a banana republic where you could possibly find the direct link between the export revenues and military expenses. This is not how Russian economy works, the picture is much more complicated. First of all, the revenue from oil and gas sales is collected in foreign currency. Russian budget receives the money in taxes paid by exporters, but these money must be converted first to rouble. The conversion rate can be regulated by the central bank through purchases and sales of the currency and they of course can print money when necessary. This means that this currency actually never reaches the recipients of the budget money and exchange rate can be adjusted to serve the needs of the economy. Second, Russia produces nearly all of its military equipment and pays for it in rouble. There's almost no mercenaries in this conflict, it is mostly regular army, which also receives their salaries in rouble. They have very low exposure to external economic shocks and if necessary can switch to the war economy mode at the cost of the rest of Russian population. Now, what happens if Russia stops exporting oil and gas to Europe? Just in the last year Russia collected 50% more money than it planned in the annual budget. The extra money are usually deposited in the Reserve Fund and National Wealth Fund and re-invested, but they can be used in crisis times. Basically, just in the last year Russia collected enough money to survive 6 months of oil and gas trade embargo (and this is 150% of its military budget). Let's say, some of these money are frozen on European and American bank accounts and cannot actually be used except for servicing the debt. Still plenty of these savings are still accessible. Besides that, Russian central bank can still print money to fund the war. This may result in even higher inflation, but the economic bloc of Russian government is extremely competent and can mitigate the impact on the population. Ordinary Russian people will inevitably notice the economic downturn, but their mentality is the mentality of survival and mobilization, plus the state propaganda can justify the means very convincingly and repressive apparatus can silence those who disagree. We are talking about many years of attrition until the economic situation becomes untolerable. No sanctions in the world will force Russian people to overthrow the government in the next year or two, just like they did not work for North Korea, Venezuela or Iran.

belorn 5y ago
> Russian budget receives the money in taxes paid by exporters That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government. Based on what secret service and other agencies has leaked, there isn't a major difference between what is the Russian government, what is controlled by Putin, and what is owned by the owners of the oligarchies. To a degree they operate just like a banana republic in this aspect, although a better comparison is likely state owned Chinese companies that get funded, instructed, operated by government personal, given benefits by their secret service, and with party representatives being directly involved in the leader structure and ownership. And it may indeed take years before the sanctions actually hurt enough for the Russian government to start move to the peace table. American war in Afghanistan took 20 years. Iraq started in 2003 and ended in fully in 2021. Their war in Pakistan took 14 years. Yemen is still ongoing, same in Somalia, and Syria. 6 months would be comparable short, and it is not out of the question that it may take many years. The more funds they get the easier they have in continuing operations. And while Russia produces nearly all of its military equipment, just like the US does, both require a lot of imports to actually do the production. Military equipment require a lot of electronics, much which isn't produced in Russia. Machines, vehicles, technology and tools all depend on international supply chains, and the more isolated the nation is the harder and more money they need to spend on maintaining those critical imports. All while the nations population suffer from the economic downturn. At some point reserves gets low and that is when peace is best pursuit.
- ivan_gammel 5y ago
  >> Russian budget receives the money in taxes paid by exporters >That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government… …To a degree they operate just like a banana republic in this aspect. This is just generic description of corruption, but you forgot to explain where I was wrong. Take, for example, Novatek - if you think its profits are funding the war, how do you think this cash reaches the army?
  - belorn 5y ago
    If you remember the Panama Papers we had multiple major Nordic banks being involved in money laundering with sanctioned Russian oligarchs. The result was multiple CEO's being forced resign, cash flows worth many hundred billions, several employees arrested, some employees that fled their own country to avoid prosecution. After this leak we have multiple bank leaks with similar stories fraud, tax evasion, and evading of international sanctions. We can put some wishful thinking that Novatek is the exception here and has no shell companies, no tax schemes, no avoidance of sanctions, no unaccounted money flow hopping around between banks in order to avoid insight. How likely is it, and how much more likely is it that with the right access to bank records or secret service files, some investigative journalist will have a field day describing just how much money ended up in the hands of the Russian government?

belorn 5y ago

> Russian budget receives the money in taxes paid by exporters That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government. Based on what secret service and other agencies has leaked, there isn't a major difference between what is the Russian government, what is controlled by Putin, and what is owned by the owners of the oligarchies. To a degree they operate just like a banana republic in this aspect, although a better comparison is likely state owned Chinese companies that get funded, instructed, operated by government personal, given benefits by their secret service, and with party representatives being directly involved in the leader structure and ownership. And it may indeed take years before the sanctions actually hurt enough for the Russian government to start move to the peace table. American war in Afghanistan took 20 years. Iraq started in 2003 and ended in fully in 2021. Their war in Pakistan took 14 years. Yemen is still ongoing, same in Somalia, and Syria. 6 months would be comparable short, and it is not out of the question that it may take many years. The more funds they get the easier they have in continuing operations. And while Russia produces nearly all of its military equipment, just like the US does, both require a lot of imports to actually do the production. Military equipment require a lot of electronics, much which isn't produced in Russia. Machines, vehicles, technology and tools all depend on international supply chains, and the more isolated the nation is the harder and more money they need to spend on maintaining those critical imports. All while the nations population suffer from the economic downturn. At some point reserves gets low and that is when peace is best pursuit.

ivan_gammel 5y ago
>> Russian budget receives the money in taxes paid by exporters >That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government… …To a degree they operate just like a banana republic in this aspect. This is just generic description of corruption, but you forgot to explain where I was wrong. Take, for example, Novatek - if you think its profits are funding the war, how do you think this cash reaches the army?
- belorn 5y ago
  If you remember the Panama Papers we had multiple major Nordic banks being involved in money laundering with sanctioned Russian oligarchs. The result was multiple CEO's being forced resign, cash flows worth many hundred billions, several employees arrested, some employees that fled their own country to avoid prosecution. After this leak we have multiple bank leaks with similar stories fraud, tax evasion, and evading of international sanctions. We can put some wishful thinking that Novatek is the exception here and has no shell companies, no tax schemes, no avoidance of sanctions, no unaccounted money flow hopping around between banks in order to avoid insight. How likely is it, and how much more likely is it that with the right access to bank records or secret service files, some investigative journalist will have a field day describing just how much money ended up in the hands of the Russian government?