Page 31 - bne IntelliNews monthly magazine December 2024

bne December 2024 Cover story I 31
around 8% of GDP. This is a high number, but not the most extreme non-oil deficit Russia has ever run. For comparison,
in 2020 during the pandemic the government ran a 9.8% of GDP non-oil deficit, equivalent to RUB10.4 trillion.
Put in other terms, the war in Ukraine is now stressing the government’s finances less than the coronavirus global pandemic did.
Russia’s oil and gas revenues occupy the most attention, but Russia exports a cornucopia of raw materials and commodities. Another miscalculation the Western sanctions have made is how deeply these inputs are integrated with the global economy.
As of 2021, in addition to the export
of more than 7.8mn barrels of crude and refined oil per day, it also sold 240bn cubic metres of natural and liquefied gas, 227mn tonnes of coal, 43.5mn tonnes of steel, 37.6mn tonnes of mineral fertilisers, 49mn tonnes
of grain, as well as large volumes of
timber, aluminium, nickel, uranium and many other commodities, which collectively accounted for 78% of all exports and were worth a whopping $385bn in 2021. This made Russia the world’s largest supplier of crude and primarily processed raw materials.
As bne IntelliNews has reported, the vast majority of the sanctions on Russia have failed to make much of a dent in the export business. Russia has either found new markets in Asia for things like oil, or it has offered discounts to win over new customers. At the same time, the West has turned a blind eye
to the daisy chain of transhipments
of Russian commodities or the more obvious transubstantiation of say Russian crude oil into Indian petrol that allows Russia to continue to trade.
Despite all the introduced restrictive measures, Russian exports decreased from $491.6bn in 2021 to $425.1bn in 2023, or by a mere 13.5%.
alarming for the West and highly significant for Russia: Russia is not simply “falling into China’s embrace” the authors wrote. “Rather, Moscow is transforming into a centre of an
“alternative model of globalisation,” operating outside the frameworks of Western-controlled institutions and established rules. This trend could prove far more dangerous than the much-discussed “export of corruption” to Western countries... As recent years have shown, the use of unconventional payment systems, the export of pirated products, and the smuggling of goods from Western companies – all of
these practices are much easier to implement than previously assumed.”
“Viewing all of this as merely a way
to circumvent sanctions is extremely short-sighted, as the Kremlin has
set its sights on fundamentally undermining the existing system and has reasonable grounds for hoping to succeed,” the authors conclude.
“Overall, this creates a trend that is
www.bne.eu