[January 19, 2024] Unclassified information from many sources inside and near the Russian Federation has increased concern in the West about Russia’s imminent collapse. But is it true that it is about to implode? While the collapse or implosion of any state is difficult to predict with reasonable accuracy, there are indications we can look at to help us understand.
“Russia is running out of men in their twenties and thirties.” – Peter Zeihen
Here is what we do know.
- Russia is in a massive demographic decline. Russia is in the middle of one of the worst demographic declines in recorded history, even worse than the impact of major pandemics that have hit parts of the world in history. Data on this is so clear that Russian President Putin has taken steps to increase the birth rate. But we now know his incentives will be unsuccessful.
- A large exodus of young people, mostly men and those wealthy enough to get out. The loss of young people, mainly to avoid being drafted into the military and sent off to the frontlines in their war with Ukraine, is especially problematic. The war also disproportionately removes large numbers of military-aged men through death and severe injuries in combat.
- Western sanctions on the Russian economy are beginning to take a significant toll, especially in advanced technology and Western technical support. The Russian ruble is on the precipice of falling off, and no one wants to exchange goods in their currency. Fortunately, Russia has a vast gold reserve that can partly offset this problem, but many obstacles remain. Already, Russians are experiencing spot shortages of critical goods.
- Much of the Russian infrastructure is aging and without recent proper maintenance, resulting in progressively more severe and widespread systemic systems failures. For example, we are getting reports of large-scale heating failures this winter. The infrastructure was built in the Soviet Union days when they had the technical know-how and cheap oil to run them. Neither exists today, and the foreign experts have left the country along with Western companies.
- Demonstrations against the Russian government are popping up more often. There is an old Russian agreement between its citizens and the government that says, stay out of politics, and your quality of life will steadily, albeit slowly, increase. But the government has defaulted on its end of the bargain. Perhaps this is why we are witnessing more public discontent.
- Russia has few allies, and those they have cannot be trusted. China and North Korea are their prominent supporters. Russia is now importing artillery shells and other ammunition from North Korea. Russia cannot pay in rubles, but while we don’t know the details, Russia is paying in intercontinental missile technology. That in itself is dangerous for the world.
On the other hand, Russia is rich in crude oil and exports large quantities, and the world needs oil. As long as the price of oil is high, they do well. However, oil prices are low at this time. Russia also exports iron/steel, fertilizer, gems, and wheat. These are produced using Western machinery and technology, but that is changing for the worse.
Is Russia about to implode? Yes, but only if the war with Ukraine continues. The big question is a matter of when? The implosion may be tomorrow, next week, next year, or five years from now. When Russia goes down, major problems will reverberate worldwide as vast quantities of natural resources go offline for an indeterminate time.
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