Despite claim that Western sanctions were supposed to target just parts of Russia’s economy and not its general population, they were specifically designed to trigger the collapse of its banking system, food production, civil construction, and to trigger massive unemployment, widespread hunger and civil unrests. In essence, in 2016 Russia was supposed to have a return of the 90s catastrophe period known as “perestroika.”
As for Russia’s involvement in Syria, it was supposed to become a ‘quagmire’ that would destroy what precious little military power the country had.
For those who ever relied on Western analytics, it should already be clear that the think tankers’ jobs have been to transmit the desires of their politicians for the future, while Russia and its allies work to change the reality now.
“The Russian reinforcement has changed the calculus completely.” From this Senate testimony made by Lt. Gen. Vincent R. Stewart, head of the Defense Intelligence Agency, we had learned in February 2016 that the US intelligence had some sort of a calculus.
If we go back through official statements and the political forecasts on Russia, will we find a calculus at work?
The following is a list of most popular predictions among the Western think tankers , and some numbers and facts to reflect the real state of affairs.
- The Western sanctions against Russia that began in March 2014 were designed to undermine financing and investments in Russia’s resource-based economy over a five-year period.
- Russia will blink under sanction pressure in 2016.
- Russian Finance Minister Anton Siluanov: Russia’s $80 billion National Reserve Fund, set up to sustain the nation after the EU and U.S. began punitive sanctions, has already spent $40.85 billion on economic subsidies this year and will be wiped out in 2016.
- The combination of challenges accelerated the damage to Russia’s economy, and will foment internal unrest.
- Russia is “getting to the point where financing delays in key projects, along with financing constraints on Russian companies and Western firms doing business in Russia, could cause irreparable harm to the economy in the not-too-distant future,” according to Stratfor Global Intelligence.
- With ExxonMobil leaving Russia, deep off-shore energy exploration evaporated. Russia will never be able to develop its off-shore oil and gas deposit.
- Russia has had very little ability to effectively respond to Western sanctions.
- The Russian economy contracted by 4.30 percent in the third quarter of 2015, versus about 1 percent growth for the same period last year.
- Russia’s economy minister (Ulukaev that was arrested a month ago) suggested that possibly 60 of 83 Russia’s regions are in crisis mode, and 20 may have already been defaulting on their debt.
- Russia faces food shortages, and per Stratfor Kremlin is “stepping up its security apparatuses” to suppress the starving population.
- Per Stratfor, Russia is involved in Syria as a strategy to force engagement with the West.
- Moscow’s key objective for 2016 is winning relief from the sanctions, per Stratfor
- Stratfor believes Russia will “use whatever it can–Ukraine and Syria included–to present itself as a willing partner.”
- Obama predicted that Russia’s involvement in Syria will become a ‘quagmire.’ In 2015, the U.S. officials called a Russian air campaign in Syria to be a ‘predetermined failure.’
Facts and numbers
- This prediction had failed. Partially due to the Western sanctions, Russian economy is positioned to have five best years ever.
- This prediction had failed also. Not only Russian government and large businesses didn’t ‘blink’ and didn’t give in to the Western pressure, they used the sanctions as a tool to curb the capital flight and to boost production. In 2015, Russia saw a net capital outflow of $58.9 billion, almost three times less than in 2014. The Russia’s Net Capital Outflow Totals $9.6Bln in Jan.-Sept. 2016
As a reminder, a part of what’s called ‘capital outflow’ is the government debt payments. In 2016, Russia still was paying back debt incurred by the Soviet government. Russia has accepted the Soviet Union debt, relieving all the other former Soviet republics from its burden.
- This prediction has failed, also.
Volume of the National Wealth Fund – $71,26 billion dollars, down from $71,72 billion on January 2016.
Volume of the Reserve fund – $31,30 billion as of December 2016, down from $49,95 billion. It’s not wiped out as predicted.
Also, Gold Reserves in Russia increased to over 1600 tons in fourth quarter of 2016, up from from 1415 for January 1st, 2016. .
Only in November the Bank of Russia purchased 1 million troy ounces of gold, or 31 tons.
This might explain relatively modest holding of US dollars.
- This prediction has failed. “Internal unrest in Russia” being a wet dream of the Western politicians and military is not going to happen. Instead, the society is united and consolidated as never before. Large segments of population have become actively involved into monitoring social and professional media for any attempts to disturb peace and tranquility in the country. It’s even come to ridiculous complains by the Western pundits that the last elections of the members of Duma was “boring” and “uneventful.” Considering, that two weeks prior the elections, an arrest of a Police colonel yielded $200 million in cash fresh from the US Mint press, still wrapped in federal mint packaging. Considering, also, that another $300 million were found on his father’s bank accounts. It’s a general idea that this cash was intended for organization of a “Maidan” like event in Russia. That didn’t pan out, because an “opposition” doesn’t exist without foreign money, just like mold doesn’t exist without dampness.
By the way, this half a billion dollars went to the federal budget.
- Failed. Predicting “an irreparable harm” to Russia’s economy, Stratfor only achieved an irreparable harm to itself.
6. The US and EU sanctions included prohibiting the export of goods, services and technology in support of E&P for Russian deepwater, Arctic offshore and shale projects to Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft, including Yuzhno-Kirinskoye Field. Sanctions were aimed at crippling the country’s energy and finance sectors.
“The intent was to be surgical,” said Thane Gustafson, senior director and advisor of Russian and Caspian energy for IHS. But “The actual results have been dramatically different. … The sector that was supposed to have been targeted is the one that has been least affected.”
Matthew Sagers, managing director of Russian and Caspian energy for IHS, said Russia has “managed to fly in the face of gravity,” being the only area to his knowledge to increase capex in 2015 and see more development drilling.
Russian production rose to 10.7 million barrels a day (MMbbl/d) in December 2015 and inched up to about 10.8 MMbbl/d in January 2016. [source]
Russian Gazprom created a brand new gas production center beyond the Arctic Circle, that no country in the world was able to do. Russia has proven its leadership in the Arctic.
The VI International Conference “Russian Offshore Oil and Gas Development: Arctic and Far East” (ROOGD-2016)
China’s imports of Russian oil hit an all-time high of 33,670,000 barrels, up 52.4% from the year before.
OPAL gas pipeline increased its capacity load to 81% as of December 27, press service of OPAL Gastransport GmbH
NB: EPMAG is lying to its readers by stating that “oil and gas revenues account for more than 50% of the federal budget revenues in Russia.” In reality, Oil and gas revenue. Oil and Gas Revenue Accounts for 21% of Russia’s Budget Not 50%
Russia runs a quite acceptable, by Western standards, budget deficit, which is expected to be 3.8% of the GDP (consolidated budget), down from 4.6% in the previous year.
For the next 2017, country expects GDP growth of 1.6%, budget deficit of 1.7% of GDP and the dollar’s average exchange rate of 63.5 rubles for 2017 with the average price of Brent crude oil of $50 per barrel. If the average oil price is closer to $60 per barrel in 2017 GDP growth may exceed 2%, budget deficit will be within 1% and the dollar’s exchange rate may be below 60 rubles mark.
- The Austrian Institute of Economic Research, the strong fall in exports from the EU to Russia was due, at least partially, to the imposition of sanctions and counter sanctions. The potential trade loss in terms of value added (€34 billion in the short run and €92 billion in the long-run) and employment were attributable to deterioration in trade relations that extended sanctions can exacerbate. That study (inter others) thus concludes that the sanctions have had serious consequences on employment in the EU with cost to the EU over €100 billion in business and up to 2.5 million in jobs.
- Christensen, O. Fritz and G. Streicher , “Effects of the EU-Russia Economic Sanctions on Value Added and Employment in the European Union and Switzerland”, WIFO Study, Austrian Institute of Economic Research, Vienna, July, 2015.
- Russia’s economy grew in 2016. Stock market is up over 40% year-to-date. In December the Russian Ministry of Economic Development revised its outlook for industrial production growth in 2016 to +1% compared to the previous +0.4%. In November, national statistics firm Rosstat said industrial production in the first 11 months of 2016 rose +0.8% from 2015 and +2.7% compared to the same month a year ago. IP also rose around +1% from October levels.
Russia’s Finance Minister Anton Siluanov [see #3]“The economy may surprise to the upside next year,” Siluanov said. “If so, growth will have an impact on the dynamics of wages and incomes, which have already shown a steady growth pattern in real terms thanks to falling inflation.”
Suddenly… FSB arrests just one liberal minister, and economy starts growing.
- His prediction has failed. Russia’s economy minister Ulukaev was arrested a month ago, officially for bribery and corruption, unofficially for treason. The IMF data of debt-to-GDP ratio by country shows that that Russia’s share in a world debt is lowest in Europe and equal only to 0,49 percent of the world debt, while the European continent, excluding Russia, holds over 26 percent of total world debt. In September 2016, Fitch Affirms Russia’s Penza Region at ‘BB’; Outlook Stable. Penza’s economy is historically weaker than the average Russian region with a GRP per capita at 76% of the national median in 2014. Other Russia’s region were also affirmed as “stable.”
- No to predicted hunger revolts. Per Bloomberg’s October report: Russia becomes a grain superpower as wheat exports explode with the grain harvest is amounting to 117 million tons in 2016, which is the highest ever in history. In 2016, US lost out to Russian wheat exports. Russia’s poultry producers found new markets to sell due to significant increase the domestic production due to import cuts.
RosStat: In 2016 an average Russian consumed 98.5 kg of fresh vegetables and 72.6 kg of fresh fruit and berries.
Russia records increase in greenhouse vegetable production per fruit-inform.com
Based on data from regional agro-business management bodies: the gross yield of greenhouse vegetable crops in the whole country amounted, as of 29 November 2016 to 607.1 thousand tons; which is 31% more than in 2015, when the total volume stood at 462.4 thousand tons. The volume of cucumbers increased by 23% and amounted to 409.4 thousand tons, compared to 333.1 thousand tons in 2015. The tomato production amounted to 182.5 thousand tons, which is 53% more than in 2015, when it amounted to 119.4 thousand tons. 15.2 thousand tons of other vegetable crops were also harvested. For comparison, in the same period of 2015 the yield was 9.9 tonnes, i.e. it was 1.5 times smaller.
- This prediction has also failed. The agreements between Russia, Syria, Iran and Turkey to end the war in Syria took place, and the Western countries were excluded from the deal.
- This prediction has failed. Russia’s counter sanctions are already in place until December 2017, with an indefinite renewal option.
- This prediction had also failed. The Western sanctions actually gave a boost to the economy.
- Another failed prediction. One year on, Russia’s war in Syria is hardly the predicted ‘quagmire.’ Even the Dark side itself admits that “the United States made a mistake by waving off this intervention as a doomed adventure. Failing to take it seriously has ramifications for the region beyond the Syrian war.”
As the warontherocks author also admits, “the quagmire is less visible in Russia’s military operations, and more in U.S. thinking on how to deal with Moscow.”
News in brief:
- Russia’s largest road contraction projects completed in 2016. Cool photos.
- World Megaprojects that cannot be build without Russia
- Boeing and the world leader in the production of titanium forgings for the aviation industry VSMPO-AVISMA agreed to process titanium forgings for all programs of the Boeing civil aircrafts, including 787 family and new 737 MAX and 777X families in Titanium Valley. The opening of the plant is scheduled for the 1st quarter of 2018. [source]
- Russia has started a development of the biggest titanium mine in the world
- 2017 forecast for Russia and Belarus: the union state will continue its integration on all levels.
- 2016: the year of Russia’s triumph
A word from the Dark side:
Russia is playing from a position of enormous strength in the new 2017 year
A collective failure of the Western “analytics” is so obvious that anyone should start looking for answers someplace else, rather than wasting money to feed a greedy bottomless pit, populated with ‘stink’ tankers.
Consider that the thesaker.is predictions and analytic have been always accurate.
Thank you for your time,
A featured image: MOSCOW – AUGUST 21, 2016: Aerial view of Moscow-City over Moskva River. Moscow-City (Moscow International Business Center) is a modern commercial district in central Moscow.
Stratford sometimes makes good precitions, but when it comes to Russia, China and USA it is always the same.
1. Russia will collapse and fragment into several smaller countries.
2. China will collapse and fragment into several smaller countries.
3. USA will remain dominant for the next 100+ years.
I have heard it said that Stratfor is almost perfect when predicting the past.
Franz, that was unkind -some of these ‘think-tankers’ may be facing layoffs unless they can produce sufficient and suitably shaped vitriol and precipitate enough quotas of self-fulfilling prophecies for their masters.
I think that it will be safer to have them (these ‘tanked thinkers’) on the streets, they are all cowards after all, than it will be to have them in any semblance of positions of authority.
I only worry that Russia and her allies will once again let too many of them live when the time comes, thus ensuring the building of a Fifth Reich on the coming ruins of the current Fourth Reich.
Well, I don’t know, on the streets they could represent a public menace; I understand there’s a nice line in designer boutique tumbrils….
“Volume of the Reserve fund – $31,30 billion as of December 2016, down from $49,95 billion. It’s not wiped out as predicted.”
-The Reserve fund, has however decreased, and continues to decrease.
“After almost two years in recession, the country’s rainy day fund has shrunk to just $32.2 billion this month, according to the Russian Finance Ministry. It was $91.7 billion in September 2014, just before oil prices started to collapse.”
That is not a big problem. The fund saved Russia in 2016. The pension fund is almost intact.
Thank you, Scott, for this analysis.
Especially for recalling Siluanov’s and Ulukaev’s gloomy predictions.
I too had noticed that these two men were ever ready to utter their prophecies of doom to anyone willing to listen. Quite astonishing.
I cancelled my subscription to Stratfor about a year ago. There is just not very good analytic coming from them, not even about the Mexican Drug War.
Southfront makes great analysis on many issues, and The Saker as well, I will soon be in a position to donate to both.
Thank you Scott.
You may wish to check out the latest impotent reaction from Obama and Co.
“Despite a glaring lack of evidence to support allegations that Russia interfered in the US presidential election, the White House has announced that they will be imposing sanctions on the nation…..”
When losing keep trying the same formula.
“We will certainly response adequately…and it will be determined in line with decisions adopted by Russian President [Vladimir Putin], Peskov told reporters commenting on the US move, which he described as “unpredictable and aggressive….”
Doesn’t Congress meet on the 6th Jan to annoint Trump? – last desperate try to stop him becoming President with a cooked up “WMD” file…….
Repost of a comment on Naked Capitalism on the looming Italian banking crisis:
This banking crisis is not an accident. The toxic loans on the books of the Italian banks are often a result of corruption, political kickbacks, fraud, and abuse”
For many, many years the incompetent Political and Bureaucratic sewers of Europe have exploited their relationships with the Bankers, for personal gain and agenda, and now it reaches the end. Banks have been coerced into funding various looting scheme for the promise of great favours to follow in return; some times they do[ mostly they don’t forcing the Parties to “double-down”. There are no surprises here at all, and it is the real reason for the EU project, that is to cover the sins of “government” and “bankers”.
I speak from direct interaction with both these classes. They both knew this would come.
And, it cannot be contained, so it will all come down, bondholders and all. Real “investment” is heading for China and Russia – the rest are just Muppets, so ? Money has no loyalty except to Profits – so let the guilty hang.
Who really cares anyway? Nobody will be held accountable as all are complicit. Blame the migrants all you want.
Tomorrow is another day… The Epoch of Stupid is coming to a Close.
“For many, many years the incompetent Political and Bureaucratic sewers of Europe have exploited their relationships with the Bankers”
It is of course the other way round. For the Zionist banking cartel to remain all powerful, ever increasing debt levels of all citizens, all companies and all governments is paramount. After all, debt-slavery is the only religion the chosen ones adhere to.
As a reminder that “omniscience does not exist”, nor does it “experts”, and the futility to go “off to see the wizard”.
Also as a reminder of the inconsistence of some on their insistence on that “we hold these truths because are self-evident”.
As a reminder of the “exceptionalism” of the opponents and their tendence to live in “wonderland” ignoring the “unknown unknowns”.
As a reminder that “forecast” is only a way to increase the signal ratio, to bridge over doubt and uncertainty.
As a reminder that the “opponent´s linear way of thinking” makes them their own worst enemy, facilitating their “trascendence”, taking into account that “change is lateral” not linear.
Enjoy your journey.
At the risk of making another literary illusion, I think the above commenter is trying to make the point that the “Emperor has no clothes “. Mod
The question “does a goldfish in an aquarium perceive that her/his environment is bound by transparent constraints ?” often applies to “think tanks”.
The contempt of opponents is always useful, especially when you are thought to be “ridiculous”, “irrational”, “childish” or “triger temper”.
Evaluations are always functions of purpose and perception.
Perception is a function of framing including expectation, methodologies and terms of reference.
This is the core of “exceptionalism” cloaked by notions of equal but different – Mr. Orwell’s observation/oxymoron that all animals are equal but some are more equal than others – underpinning divide and rule, manifest in various ways including but not restricted to rascism.
Boys and girls tend to be curious, explore, are flexible, innovative and energetic.
To some an “adult” is often a pejoritive, where as for the opponents a “child” is often a pejorative.
In myriad ways the opponents facilitate their own transcendence – the lateral process from equal but different to equal and different.
Obama recently made a comment to the effect “Russia doesn’t produce anything of value except arms and oil” and reiterated “Russia is a weak country” (but none the less one that is a huge threat and worth obsessing over). Scott – do you have a list to counter the first statement? (the second has been discussed in detail elsewhere)
The question to Obama would then be : If Russia is a weak country, what does it say about USA being beaten by a weak country in Syria?
As I said, this has been discussed elsewhere by the Saker and others. Superficially, of course it cannot be both weak and a huge threat to the same adversary. Obama’s position is amusing.
Good question. I will look into this.
I don’t promise this immediately with a New Year celebration and Christmas coming, but this is something that comes up often. What does Russia produce?
I will try to put together a point of reference, of sort.
for immediate reference consider
All Western sources confuse production with export. Most of what Russia produces is used domestically.
A great resource is called Made Here http://sdelanounas.ru/
It’s all in Russian, but you can look at pictures and click on an interactive map.
Yes, production for both domestic consumption as well as export would be interesting, as well as what is being imported. Aerospace industries have been strong for decades and of course the US demand for Russian rocket engines has been a source of embarrassment in the US, as has been the reliance on Russia for transport to the ISS. I know that agricultural production has been increasing.
I have been a passenger on the meteor boats several times:
Mining and raw metals – nickle, titanium, diamonds, gold, iron ore, etc:
Well, this is a deep subject and one can get a bit lost/sidetracked. I know a bit about the aluminum business in Krasnoyarsk and it’s relationship to hydro power and the controversial hydro dam on the Angara R. and the accident in 2009 at the Sayano-Shushenskaya power plant. I visited the hydrodam south of Krasnoyarsk in 1993.
New turbines, Russian manufacture:
The dam on the Angara R.
The above hydro/metals bit indicates both the possibilities and challenges – not unique to Russia – infrastructure decay, environmental issues, tremendous resources and potential.
While US is producing a lot think tanks, RF is producing a lot of thinking tanks.
Not necessarily. Sometimes they miss.
Never mind, move on.
But, in his dismissive ‘Russian arms @ oil’ comment, Mr. Obama might have at least conceded Russia’s grain production/export numbers. Just too much inconvenient truth to absorb at one sitting perhaps.
Слава Русији и хвала вам на све што сте чинили да би овај свет постао бољи, мирнији и сложнији. Владимире Путине, огромно ти хвала за све што си учинио откад си ступио на чело Русије.
Христос се Роди!!
Translation: Glory to Russia, and thank you for everything you have done to make this world become a better, more peaceful and more unified. Vladimir Putin, a huge thank you for everything you’ve done since you took the helm of Russia.
Christ is born!!
The mice have lost. Now scram in panic!
” Alpo Juntunen, an honorary professor at the Finnish National Defense University, has advocated creating a military alliance with Finland’s vast eastern neighbor amid a heated NATO debate that has swept the Nordic country.
“A truly practical solution to our security problem would be a defense alliance with Russia,” Juntunen said, as quoted by Finnish newspaper Aamulehti.
Juntunen specifically dissuaded his fellow countrymen from joining NATO and particularly warned against what he called “the Estonian way.”
“The EU is not a military power, and NATO would only jeopardize its position in the small Baltic states,” Juntunen said, calling the Baltic example “alarming.” ”
Actually as i have followed comments of blogs in this issue there have been lots of positive or as i should say realitic opinions among Finns. And as most of us who have knowledge of history – that alliance with Russia has been actually the mainstream foreign policy attitude among Finnish policy makers. Marshal Mannerheim wanted similar military treaty with Stalin much before Finnish-Russo Winter War. He was misunderstood.
Perhaps these worthless entities should henceforth be known as either “wish tanks” or “think: tanks, bombs, and sanctions”
I feel like US always think military operation as a quagmire.
I suppose cause they had experience such quagmire and think other military with “smaller” means should experience the same. But imo such quagmire is partially due to their attitude. (which it’s sad cause some US people are good…).
2 very simples reasons are :
1) US are cocky. They always say America number1. America this and that. In some mind USA is the best country without flaws. (while it’s true they have good thing they completely suck hard on some others..
2) If it’s sadly true that most of westerner are blinded to the truth, is not as so for non aligned / other country. Right now they have realized that westerner only want to plumber any country just to increase their wealth. Especially US where money is like an absolute virtue. With such value there no doubt people wont trust you / think high of you…
As for me even if I wont trust a Russian, I would definitely do it 20 time over an US military..
The demonizing of Russia is intensifying this means, attack against Russia will continue. The U.S so far has succeeded in all 5 (Syria, Lybia, Iraq, Afghanistan, Somalia) countries out of 7 with regime change and destroying nations as a result. Actually, it is not just 7 countries, there are many countries that is currently facing hard/soft wars from U.S. Its difficult and main target is of course Russia. If it defeats Russia, it defeats the entire world. The big elephant in the room is China. No matter the negotiations that China makes between Russia and U.S, in the end China could be persuaded by U.S and it is this persuasion that gives U.S a guarantee to attack Russia. Which way, China? The U.S is the most treacherous country and that is why it has succeeded by will or force to influence/conquer other nations. Considering China has grown economically via Western Corporation, Hong Kong and so on, China could be persuaded towards U.S in the end. There is also a possibility China might have obtained nuclear secret from U.S to China via Israel. What ever the decision China makes, the U.S for some years might pretend to be equal partner with China but it is obvious it wants China to be a cheap labor nation serving the West that is all. Once Russia is eliminated, it will once again turn to China if China continues its way of growing. One thing that the U.S is so clever is that it has patience, it could wait at the right time, making you think you are a partner, but would all of the sudden turn you into an enemy.