Russia’s GDP was smaller than that of Texas even before the latest and most lethal sanctions imposed by Washington. It has diminished further to Benelux proportions after the rouble’s 10 per cent crash this week, the steepest fall since the late ’90s.
Upon this slender economic base, Vladimir Putin’s Russia is posing as a world-class superpower, the new master of the Middle East, insisting on its “droit de regard” over the old Tsarist realms as if by natural right. What is extraordinary is that anybody should believe in such posturing.
The harsher truth is that Mr Putin squandered the windfall wealth of the commodity supercycle and hollowed out what remained of the Soviet industrial base, leaving Russia’s Potemkin economy in a cul de sac.
He has succeeded (so far) in propping up his ally in Syria but this tells us little about the global balance of power. The Kremlin likes to dismiss Western sanctions as a flea bite. Not any longer. “The measures are turning into a tool of real economic war,” said Russian premier Dmitry Medvedev.
The US Treasury document announcing sanctions to punish “worldwide malign activity” is a comic read, but it is also mortal threat to the Putin oligarchy. It alleges that Oleg Deripaska, aluminium king and head of Rusal, “ordered the murder of a businessman”.