Trump’s Assault on Globalization Will Hurt Russia Badly and Soon, Russian Analysts Say
January 23 – President Donald Trump’s assault on globalism, something the
Kremlin welcomes as a means of increasing disorder abroad, is going to hurt
Russia and its population far harder than many now imagine and far more quickly
now that Moscow’s reserves are running out, according to two Moscow analysts.
The first, Pavel
Pryanikov, the founder of the Tolkovatel portal, says he can understand why
many Americans oppose globalization because they have the domestic institutions
and resources to cope with its demise but that he can’t understand Russian support
for it because Russia will suffer as a result (kasparov.ru/material.php?id=5885B97B9A938).
The US has
strong engineering schools and research centers, he points out, and it will not
be difficult for America to rebuild on its own territory the factories now in
China or South Korea that are producing for its market. There may be some rise
in prices, but given the size and strength of the American economy, the US will
take them in stride.
situation in Russia is very different: It lacks the domestic institutions and
financial capabilities the Americans have, Pryanikov says; and that means that
it will face serious increases in the prices of imported goods without the
capacity to substitute domestic production of them.
continues, if globalization is limited, this will mean for Russia “in the
mid-term range only a growth of mass poverty and the spending of budgetary
funds on import substitution projects that are unlikely to work as planned and
that would cost more than Moscow can afford.
is supported by the following fact: currently, Americans invest 70 billion US
dollars in venture projects each year, while Russia makes only 400 to 500
million in this sector. That is the US invests 150 times more than Russia does,
and that should tell Russians and perhaps even the Kremlin all they need to
know about what the end of globalization would mean.
And in a
commentary on the Republic.ru portal, Oleg Buklemishev the director for the Moscow
State University Center for Economic Policy, explains why the impact of an end
of globalization on Russia will not only be serious but that it will come far
sooner than many now expect (republic.ru/posts/78699).
points out that “Russia has exhausted its cushion of security” that its various
reserve funds, which are now running out, had provided and that means it is “ever
more dependent” on the price of oil and the attitudes of investors, factors
over which the Kremlin has less control than it may think.
And that in turn
means that any short-term shock to the Russian economy as a whole from changes
in the international one is something that the Kremlin can no longer compensate
for as it has in recent years by turning to reserves. These no longer exist,
and so shocks from abroad will more quickly translate into shocks at home.