Stratfor this week published a little paper called “The Geography of Recession” that is worth taking a look at, if only to be reminded of the old axiom that “geography is destiny.”
The report begins with statistics showing how the global recession is affecting various countries and then moves on to an interesting, geography-based explanation of why the recession is, so far, more than four times worse in Russia (change in GDP of negative 9.5 percent over the last 12 months) than it is in the United States (a decline of 2.6 percent).
Stratfor’s analysis of the United States – how its geography, including the world’s largest mass of arable land and a generous inland waterway system that promotes open and cheap domestic trade, produced a resilient and flexible political and economic system – is intriguing reading.
But Power Vertical readers are going to be most interested in the Russia section, which provides a neat summary of the Kremlin’s geographical and historical issues. And that section boils down to this, in Stratfor’s words: “If in economic terms the United States has everything going for it geographically, then Russia is just the opposite.” That is, a harsh climate, masses of barely inhabitable land, a disconnected river system that freezes for much of the year, a lamentable lack of warm-water ports, and no meaningful geographic borders separating it from its neighbors.
As a result, Russia’s historic national strategies have been predetermined: “Because Russia lacks a decent internal transport network that can rapidly move armies from place to place, geography forces Russia to defend itself following two strategies. First, it requires massive standing armies on all of its borders. Second, it dictates that Russia continually push its boundaries outward to buffer its core against external threats.”
The standing armies are a constant drain on the economy and the expansion strategy means “large populations that do not wish to be part of the Russian state and so must constantly be policed.” The lack of labor and capital needed to cope with the needs of the vast territory, Stratfor reminds us, impels Russia toward centralized planning in an effort to harness the limited resources available “to achieve even a modicum of security and stability.”
This, in turn, historically drives Russia toward systems having small ruling elites, an impulse that has been pushed to an extreme in the era of Vladimir Putin. The small elite means a shortage of attention and innovation, meaning that “unless management is perfect in perception and execution, any mistakes are quickly magnified into national catastrophes.”
The Stratfor conclusion, then, is: “It is therefore no surprise to STRATFOR that the Russian economy has now fallen the furthest of any major economy during the current recession.”