Why is Russia’s GDP rising in the midst of a costly war?

On July 29, 2023, Jamie Glazov posted an interview with Andrei Illarionov, a former economic adviser to Vladimir Putin.  The title of the interview was “Inside the Mind of Putin.”  Dr. Illarionov said that Putin wants to restore Russia to what Putin calls “historical Russia.”  Putin’s writing and speeches indicate that historical Russia refers to the Russian empire that existed from 1721 to 1917.  The modern-day countries with territories once controlled by the Russian Empire include Russia, Ukraine, Belarus, Latvia, Lithuania, Estonia, Finland, Poland, Moldova, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, and the United States (Alaska and parts of California).

Dr. Illarionov spoke about how the Russian GDP has increased significantly during the war with Ukraine.  It is counterintuitive that Russia’s GDP is increasing while it is fighting a costly war with Ukraine.  Dr. Illarionov blamed Joe Biden’s policies for making this possible.

The Biden administration issued a ban in March 2022 against purchasing crude oil and other petroleum products from Russia, immediately after the Kremlin’s invasion of Ukraine.  The problem is that the Biden administration did not ban purchasing gasoline and other products refined by other countries from Russian oil.  The result of this policy is that countries like China, Singapore, Turkey, and India buy the oil from Russia, refine it, and sell the refined oil to the United States.  Biden’s ban accomplishes nothing other than laundering American refining jobs to other countries, some of whom are hostile to the United States.

Biden’s war on domestic production of fossil fuels results in America buying more foreign oil than it would otherwise.  In addition, Biden’s policies lead to America exporting less oil and gas products to Europe so that Europe winds up buying laundered Russian oil as well.

Russia, in the meantime, is enriching itself by expanding its gas fields and its pipeline infrastructure for delivering oil and gas to Europe and China.  In addition, Russia is financing environmental movements in Western countries to stop domestic Western production of energy so that Western countries have less money to support their militaries and so that they become more dependent on Russian oil.

The environmental movements have been effective in accomplishing Russia’s goals.  Germany has shut down all its nuclear plants.  The United Kingdom has announced that by 2025, all its coal plants will be shut down.  Germany and several other European countries have largely banned fracking.  The result is that the high cost of energy is impoverishing the oil-dependent West, which can no longer afford to compete with the growing military power of Russia. 

There is another country that is hostile to the United States and whose military is growing more powerful by the minute: China.  China, like Russia, knows the importance of energy when it comes to funding its military and has increased its coal output to 11.93 million tons a day.

While Russia’s and China’s military might has grown stronger, Biden is cutting spending on America’s military and is spending inflating dollars on green energy instead.  America’s military has become weaker, faces a recruiting crisis, and is being demoralized by Biden’s cuts and woke racial policies.  America’s navy was on a par with China ten years ago, but today, China has the largest naval fleet in the world.  Russia has hypersonic missile that can fly at nine times the speed of sound, which is too fast to follow with radar and which the United States can’t match.

Russia and China have officially declared their relations as not allies, but better than allies.  They recently conducted joint military exercises by the Aleutian Islands and the Sea of Japan.

The United States needs to learn from Russia and China and grow its energy sector and build its military.  Instead, while Russia and China prepare for war, the Biden administration makes war on domestic fossil fuel production, buys Russian oil, and weakens America’s military.

Image via Public Domain Pictures.