The New York Times has gotten better, of late, at infographics. And they’ve gotten better at covering Russia, too. But somehow, their attempt today to combine the two was less than impressive.
In an effort to explain Russia’s economic downturn in five simple charts, the Times noted the following:
- Russia’s been running a budget deficit, with a negligible interruption, since 2009;
- Russia is heavily dependent on hydrocarbons, and now is a very bad time to be dependent on hydrocarbons;
- The ruble is weak, squeezed by sanctions and the fact that now is a very bad time to be dependent on hydrocarbons;
- They’re spending too much money on the military; and
- Their reserves are running low.
All of this is true, but little of it matters. For one thing, despite the deficit Russia’s fiscal position is comparatively strong; it has very little debt, and some other superpowers have been running deficits for decades and getting long just fine, thank you. For another, oil prices will eventually bounce back. A weak ruble will eventually spur import substitution and a manufacturing revival. And the situation with the reserves, while worse than it used to be, isn’t as bad as it might look.
I could go on, but that’s not the point. The point is that Russia does have a serious economic problem – and it’s got very little to do with the economy. […]
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