Hacker News new | past | comments | ask | show | jobs | submit login

Even at war and cut off from the world the Russian economy is growing. Driving by buoyant commodity prices.

They have tech for civilian aviation in their massive military industry. And just the sheer size of the country guarantees the demand.




Russia's GDP is a bit more than half of California's.

Civil aviation there is a few hundred planes (about the size of Southwest--in total), and is heavily government subsidized.

https://www.reuters.com/business/aerospace-defense/russia-sp...


The reason they dipped in terms of planes is directly related to sanctions and western countries pulling out based on the article you shared. Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet) are in the process of being fully "Russified" and the MC-21 is actually a true domestic plane vs the Chinese C-919:

- https://aviacionline.com/2022/05/sukhoi-tests-100-russian-av...

- https://www.youtube.com/watch?v=E32TCdBgkoY

Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT:

https://www.worldbank.org/en/about/leadership/directors/eds2...


> Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet)

A very good based on what measurement? Operators have complained about extremely poor reliability, and there have been a high amount of crashes.

> and the MC-21 is actually a true domestic plane vs the Chinese C-919:

The MS-21 isn't domestic, it uses Western avionics and engines. There's a russified version which is supposed to be launched in 2025-2026, but it's unknown if that would happen considering it's using the Aviadvigatel PD-14 engines which are still undergoing design refinement and testing. It could literally be years before the engines are ready, so when the jet enters service is anyone's guess.

> Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT:

A big issue with these metrics is that they use the official exchange rate for RUB to USD exchange rate, which is entirely theoretical since it's impossible to trade the two due to the sanctions. The real exchange rate is probably much worse for the RUB, so these metrics based on the official theoretical one are highly misleading.


> A big issue with these metrics is that they use the official exchange rate for RUB to USD exchange rate

Isn’t the main point of PPP-based metrics that they DON’T use the official exchange rate?


> Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth,

You can get a lot of GDP growth if you focus your entire economy on making war materiel. It's not exactly durable growth and it doesn't really increase your citizens' quality of life.

Russia's industrial development outside of refurbishing Soviet stockpiles for war is extremely limited. Ditto for its civilian development: come on, 20% of citizens are still waiting for indoor plumbing.

GDP PPP is a useful number in comparing relatively-like economies, but here it breaks down completely.



How much steel and electricity does California produce ?


California spends 50k per homeless person[0] and can only house them when Xi Jinping[1] comes to town.

[0]https://www.cbsnews.com/sanfrancisco/news/california-homeles...

[1]https://wpde.com/news/nation-world/san-francisco-cleans-up-b...

GDP is sort of a nonsense metric for "ability to get things done". A huge portion of that GDP are things like rents extracted via intellectual property so it doesn't tell you anything about ability to manufacture anything.

Example: California woman sends her kids to daycare a few weeks after birth and goes back to her job (high GDP), Russian woman stays home with her children (no GDP). Now wait 50 years until you only have neglected iPad kids raised by busy parents left, how many planes you building now? And the ones you manage to build? Maybe they start falling out the sky, doors coming off the hinges, that sort of thing. Maybe the engineers don't have enough of a backbone to stand up to their boss because they never really experienced secure attachment, and some people die.


The economy is growing because of massive government expenditures on defense. The same thing happened with Nazi Germany. It's not sustainable.

"Buoyant commodity prices" is also known as inflation. They have high inflation despite having a federal interest rate of 18%, which is sky high. Not great signs for their economy.


Silicon Valley was built on defense spending.


Not at the same scale. At the peak of the Vietnam War, the US spent less than 10% of GDP on the war. Most of the time it was only half of that (for comparison it’s less than 3% at the moment).

Russia currently spend about 40% of the GDP on Ukraine war ( coming off my memory, may not be 100% accurate). That can’t be sustainable and they will have long lasting impact.


The figure I've seen for Russia's spend is 40% of its budget, not its GDP. More like about 10 percent of GDP.

Still an insane amount, for a war that has been obviously insane from the very beginning. But a different number, in any case.


It's 6% which is not a dealbreaker for a country with one of the lowest GDP to Debt ratios (assuming the war does not stretch for another 5 years).

https://carnegieendowment.org/russia-eurasia/politika/2023/0...


They have low debt but little ability to borrow. Once they run out of reserves they won't be able to sustain these levels of funding.


Why would they need to borrow when they can continue to sell commodities (which the EU and US continue to buy, btw)? Besides, there's no indication that they are running out of reserves. Wasn't one of Putins first moves to get off of foreign debt?


They’re going to have a hard time exporting oil and gas if Ukraine keeps attacking their refineries. Repairing those refineries requires equipment that Russia has a hard time getting thanks to sanctions.


Those commodities won't even come close to covering their spending spree. And their reserves are running dry very quickly. Likely by the end of this year.


Any source for their reserve run-down?


Even if it was, many of the products that came out were not defense products.

Nazi Germany spent defense money to build defense products. The war was going to end eventually.

Like spending too much money on remote work products during a pandemic that will eventually end. It’s going to blow up.


Nobody is interested in 1970’s airliners though.


In that part of the world, if those are the only ones available...


Then it aint no Silicon Valley.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: