The Future of the Post-soviet Republics

NEW – March 11, 2023

Now a lot of people talk and write about the United States and Europe, because the events taking place there affect a lot of things, including our lives. Against this background, events in Moldova, the Baltic states, or other post-Soviet republics do not stand out so much, because they are small and have little impact on anything. However, most of the republics share a common border with Russia, so the fate of our neighbours is an important topic.

Countries can sometimes be compared to people, and each person needs something to live on. Some go to work, some get a pension. Sometimes people are lucky and get a rich inheritance from a distant relative. All the republics inherited a rich legacy from the USSR in the form of developed industry, but many have long squandered it.

Industry is the main source of income in the modern world. And having lost their industry, many people then began to sell resources, including Russia itself. Although oil, gas and timber were actively traded in the USSR. Gas is also traded in the United States, Qatar and Norway, and oil is the main source of income for Saudi Arabia. They do not see anything shameful in this, just those who did not have the resources, they envy others and invent all sorts of nicknames, but they themselves would also like to sell them.

In fact, Russia still sells modern weapons, builds nuclear power plants, railway cars (contract with Egypt), provides paid services for the protection of objects by PMCs, etc. But many republics have squandered their industrial potential and do not have the resources to sell them. Kazakhstan and Azerbaijan were the most fortunate republics with resources.

For those who were less fortunate, there was another, far from being the worst source of income – this is agriculture. For example, about 50% of Moldova’s export revenues are provided by agriculture. There are also legends about one agricultural superpower. Some countries of Central Asia and Transcaucasia, which sell fruit or nuts on our markets, can be called more modest among the agrarian powers.

Some other republics began to engage in tourism. Examples include Georgia, which began to earn mainly on tourists, but on wine with tangerines. However, such sources of income could no longer provide an acceptable standard of living. Being part of the USSR, almost all republics, except for Belarus, lived on subsidies from the centre. And having turned out to be separate states, many of them had to deal with Russophobia for subsidies from the West.

The EU, the United States or Britain paid handsomely for this, and thus they tried to weaken Russia via someone else’s hands. Some also had a desire to join NATO, and this led to a conflict between Russia and Georgia in 2008. Further, the degree of Russophobia only increased. And so the topic of our numerous neighbours seemed interesting to me for analysis, because it directly concerns our future life.

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The good news is that the West is weakening and no longer has the ability to feed Russophobes as well as before. Inflation in the Baltic states is clear proof of this. It turned out to be very high and amounted to about 20% in 2022, which is much more than in Russia or in other EU countries. This suggests that EU support for the Balts is weakening. Russophobes are in panic – they are afraid that the West will abandon them altogether.

The West is experiencing economic difficulties and is forced to spend hundreds of billions of dollars and euros to support its own population and compensate them for the increase in tariffs and prices, so that people do not come out to protest. Therefore, they simply do not have extra money for all sorts of Balts, who now need to think about how to continue to exist.

The energy crisis in Europe is already permanent, since Russia is no longer going to sell resources for pennies, and Borrell once admitted that this was the source of the EU’s well-being. Also, a number of European politicians honestly advised their citizens to work more if they want to maintain an acceptable standard of living in the future.

We have dealt with Russophobia – this shop is closing and they are not paying so well for it, and soon they will only praise it at all, but they will no longer give money. And it is unlikely that anyone will do this for free. It’s unprofitable.

Industry is also lost, and it needs cheap gas, which also does not exist, and without cheap energy resources there is no point in even trying to develop it – products will be expensive and unprofitable. For example, gas prices for Moldova have risen several-fold, and in January Gazprom sold it for more than $1000 per thousand cubic meters. What kind of industry is there, even if gas prices have risen 7-fold for the population?

With agriculture, the situation is similar – it is not enough to have land for farming. If we are talking about exports and foreign currency earnings, and not about a personal garden, then we also need diesel fuel and fertilisers, and most republics also have problems with this. Therefore, farming by these countries independently is unprofitable.

The tourism industry has been in decline since 2020, and the times are turbulent. It is restless today in different regions of the world. Staying in other countries has become unsafe, and recently Russian citizens staying in Georgia were asked to be more careful in connection with the protests in this country and their possible consequences.

And for tourism, as well as for agriculture, cheap fuel is needed. Its price is reflected in the cost of tickets, and the price of tickets is reflected in the flow of tourists. The problem is somewhat broader – in principle, the world is running out of cheap hydrocarbons, so it is important to understand where the world is moving in general due to the depletion of oil reserves.

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Oil is also cargo transportation, so gradually the world is moving towards the fact that products will be produced closer to the consumer in order to save on cargo transportation. Tourism will also become more local, and it is not without reason that our state has begun to encourage domestic tourism with cashback. This is not so much because of sanctions, but because of the exhaustion of cheap hydrocarbons in the world, which makes the cost of flights to distant countries more expensive and for the price of a one-way ticket alone, one can already have a good rest somewhere in one’s homeland.

All of the above means that tourism, manufacturing, and agriculture in Russia are forced to rely on their own strength and capabilities. So import substitution in any case will take place in our country, there is no choice. We will produce and consume mainly domestic products, relying on our rich reserves of natural resources. And this will be a harsh necessity in a world that is plunging into an energy crisis.

So the future of the Soviet republics looks very bleak – they have no industry left, no resources, and they will not pay so much for Russophobia. In addition, they have accumulated huge debts over the years of independence, which will have to be paid off for several generations.

Many residents of these countries will have to move to the countryside and start a private vegetable garden to survive, as life in cities will become more expensive, because goods in urban stores are not taken by themselves and fuel is needed to deliver them, and it becomes more expensive due to the gradual depletion of cheap oil in the world.

Of course, many people who are used to comfort will not agree to graze geese and pay off the loans that the authorities have collected for them. They will go to work in other countries as a cheap slave force. The population of the Baltic states, for example, is already the leader in population decline. It is possible that in the future land for agricultural purposes. Russia will buy up activities in these countries and our companies will do business there, because we have fuel and fertilisers for this, but these countries themselves do not.

Separately, I would like to say about Belarus and the huge feat of Lukashenko. Belarus is also deprived of resources and also risked sliding into a cave of Russophobia. But Lukashenko managed to preserve the Soviet industrial heritage, and Belarus did not disappear, its goods are in demand in the large Russian market, and thanks to its proximity to Russia and good relations with it, gas is inexpensive for Belarus and doing business there is profitable. Hungary’s Prime Minister, Viktor Orban, follows the same line of thinking.

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Lukashenko and Orban are well aware that otherwise their countries simply cannot survive in this harsh world. But Scholz doesn’t seem to care, because by following the lead of the United States and depriving Germany of industry, he is depriving Germany of its future. How and how will the Germans earn money if they do not have resources that can be sold? And then why buy them yourself?

Here we will also have to say about the policy of the United States, which is the largest consumer of oil on the planet and which is faced with a shortage of oil on the market and an increase in its cost. They have a reason to start a fire in Europe, because Europe is the second largest oil consumer on the planet and having dealt a blow to the European economy, the Americans want to reduce the number of oil consumers in this way, so that they themselves will get more in the conditions of depletion of resources, and prices will fall slightly due to reduced demand. On the one hand, it is not profitable for the United States to deprive itself of such an ally as the EU, and with it its hegemony, but on the other hand, the depletion of resources leaves the United States with no other choice.

So from the point of view of the United States, all of Europe and the former Soviet republics at the same time are “extra mouths” in the market of oil or even nuclear fuel used for nuclear power plants, which the US buys from Russia. Why do Europeans need nuclear power plants? The United States, through the green lobby, convinced Europe that they did not need any nuclear power plants, and so the United States would get more uranium.

As natural resources are depleted, the West weakens, and handouts for Russophobia decline, many former Soviet republics will have to work with Russia again to secure some sort of market, an influx of tourists, and budget revenues from agriculture. But already on market terms.

This will not be enough, so many people there will have to go to work in more developed and resource-rich countries, leaving their wife on the farm to graze geese and feed pigs. Russia, on the other hand, thanks to the availability of resources, will be able to develop all branches of the economy and be a much more developed country, surrounded by villagers who, due to lack of resources, will slide down to the standard of living of the last century.

Whisper of the Kremlin

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