Sovereignty and Economy in Russia; A Real Lesson for the U.S.

Russian President Putin’s June 7 opening speech to the St. Petersburg International Economic Forum reported some startling breakthroughs in the Russian economy—even amidst sanctions and war. Even more startling was the breadth and ambition of his proposed plans and targets for the future—even while knotty problems remain. A revolution is underway in the Russian economy.

But his starting point was not economics—still less sanctions or war. It was sovereignty. He said, “We can see that a real race is beginning between countries to promote their sovereignty at three key levels: the state, cultural values, and the economy.” He implied that economic sovereignty was only possible on the basis of state sovereignty and cultural sovereignty—as Russia’s new Defense Minister, Andrei Belousov has said.

Before mentioning some of the striking developments in the Russian economy triggered by sovereignty, we have to mention that Russian economic statistics are real, unlike US statistics. Even hostile experts are unable to show falsifications in the Russian stats, while such US figures as the Consumer Price Index and unemployment had already left reality behind in the 1980s, and have become ever-more fictional since then. Larry Summers’ well-known 2022 paper barely scratched the surface of this problem.

It is not the numbers, but the qualitative changes behind them that are important. But Putin reported that after falling in 2022 under the initial impact of Biden’s sanctions, real Russian GDP grew by 3.6% in 2023, and by an annualized 5.4% in the first quarter of this year. Indeed, the IMF forecasts that Russia will grow faster than any other advanced economy this year, at 3.2%. And the World Bank has just concluded that Russia was already the world’s fourth-largest economy in 2021 by purchasing-power parity, behind the US, China and India—surpassing Japan and Germany. So much for the sanctions which Biden claimed in February, 2022, would cripple the Russian economy within two months.

Imports as a percentage of GDP were 26% in 1999, falling to 19% in 2023 and a target of 17% in 2030. Compare with an artificially low figure 16% for the US in 2023, which is artificially suppressed because of the overgrown US service economy.

Russia continues to revolutionize its agriculture, moving from being a huge grain importer during the Soviet period, to one of the world’s top grain exporters—and the number one exporter of wheat today. Now, at St. Petersburg, Putin pointed to the modernization of the meat industry, which has doubled its output over the last 15 years. Russia is now 100% self-sufficient in meat, and Russians consume an average 80 kilograms (176 pounds) per year, double the world average of 42-43 kilograms.

In industry, growth of fixed investments was targeted for 15% in 2023, but their actual growth was 27%, aided by many schemes of investment tax credits, accelerated depreciation, guarantees, and availability of loans and investments. Assets of retail investors grew 50%.

The fight for technological sovereignty is intense. Substitution for foreign technologies will be slow and difficult, especially in microelectronics. On the US side, Biden’s CHIPS Act has failed for the reasons that almost all big projects fail in today’s America —which President Trump rightly calls “a failing nation.” Putin’s St. Petersburg speech emphasized upgrading of Russian manpower through massive, higher-technology vocational education, and an expanded, upgraded university system. Economy-wide measures such as accelerated depreciation greater than the initial investment, will incentivize use of Russian-made advanced technology.

Putin again emphasized the creation of a new national elite around the best veterans of the Ukraine war at all levels. Think here of the American heroes who are being thrown into prison by Biden, such as Peter Navarro and Steve Bannon, as well as the January 6 martyrs. They and others like them are the core of our new national elite of service and sacrifice here, around President Trump.

“Over the past five years, the duration of the investment construction cycle has almost halved, due to the elimination of administrative barriers and clearly excessive requirements,” Putin said. Russia has moved out of the ranks of those countries where nothing can ever be built—countries which include Biden’s United States. Massive investments in America today generally result in major churn and consultants’ contracts—without any progress on the ground. Nayib Bukele recently cited California’s high-speed rail project, where a $15 billion investment over 10 years, resulted in 600 yards of rail which doesn’t work.

Biden has allocated $7.5 billion to build charging stations for his EV lunacy, but after two years, only eight have been built. Elon Musk summarized: “Large projects are basically illegal in the West.” President Trump cut away at this rot with success—and he will be able to achieve far more in his second term, including with the support of movers-and-shakers from Silicon Valley and elsewhere.

The secret is sovereignty. Government “of the people, by the people and for the people,” dedicated to increasing the God-given rights and powers of the citizens themselves. Rather than the cult projects of the oligarchy for mass immigration, racial division, Green nonsense and childhood sex deviance. Cult projects to dismantle the Republic.