George Will, this morning, made an interesting comment on the Russian invasion of Georgia. It expands on something I commented about the other day. Russia has a serious demographic weakness. It’s losing 700,000 people every year. Soon, very soon, it will be smaller in population than Poland and Ukraine combined. Its industries are weak. George Will said that no one buys anything from Russia except vodka. Someone else, I can’t recall who, said that “Russia is Saudi Arabia with trees.” They have an abundant supply of natural gas and a less abundant supply of oil. The oil fields are not being well managed, and the price of oil has given Putin a boost in income that may not last. The oil is there. No one argues that. However, the Russian government is not cooperating with the companies that produce the oil and, unless Russia produces a better home grown oil industry, the reserves may not translate into as much wealth as Putin is counting on. There are signs this is happening.
Another commenter on the Sunday morning shows commented that “China has an economy; Russia has gas.” The Russians do not seem to be investing the oil wealth in the economy. Russia is a third world country except for the oil. They are reverting to the policies of Czarist Russia in the 19th century. Those policies were the product of a tiny wealthy elite supported by ignorant peasants. The result was failure of the modernization that began so well in 1900. Russia has lost a century and seems to have learned nothing. The internet is full of ads for Russian women seeking to marry western men. What do they know that Putin does not?