Is Russian Economy Strong or Weak??

US President Barack Obama once said: "Russia's economy is nothing but oil and weapons, Russia can't produce anything for the world to buy". Last year, President Biden criticized the Russian economy again in the same way. So is the Russian economy really big or small? Does it have any impact on the world or does it just hang around the oil and gas fields? Let's make it clear with just 5 minutes in this video.

In 2021, Russia becomes the world's 11th largest economy with a GDP of about $1.6 trillion and exports of $489 billion after adjusting for inflation according to World Bank data, and if converted to purchasing power parity, this economy will rise to the 6th position in the world. In this large economy, there is a significant contribution of oil and natural gas with 15.2% of GDP, down from 21.1% in 2018.

 

In terms of budget revenues, oil is much more important. According to the Ministry of Finance, about 28% of the total national budget revenue in 2020 will come from oil and gas, 39% in 2019 and 46% in 2018. As such, Russia has increasingly reduced its dependence on oil to build a more sustainable economy.

 

So what is Putin directing the Russian economy to focus on instead of oil income? What Russian industries have an important global position?

 

The first thing we have to mention is that Russia exports nuclear power technology. Currently, Russia is the largest supplier of nuclear technology and services on the planet with total orders worth more than 138 billion USD with customers from 11 countries. In addition, Russia is also the world's leading source of nuclear material with about 43% uranium, 20% converted uranium.

 

Second is the weapon. Russia is currently the second largest arms producer and seller in the world, and the 1st place you probably already know is the United States. According to the International Institute for Peace Studies, between 2016 and 2020, Russia sold weapons to at least 45 countries and accounted for 20% of all arms exports globally. In 2020, the arms business alone brought Russia up to $ 15 billion, the leader of this country also said: "other countries have signed a lot of contracts with a total value of up to 50 billion USD of weapons waiting to be handed over."

 

Third, Russia provides space services. From 2011 to 2020, Russia is the only unit providing services to the US Space Agency to send people into space. Continuously for a decade, NASA has relied entirely on Russian spacecraft to transport astronauts to and from the ISS International Space Station due to the termination of the US space shuttle program in 2011. Although recently, the US company SpaceX was also able to provide astronaut transportation services, but the US still uses Russian services at least until 2021.

 

You may think that sending people into space makes little money?However, it's actually a pretty big amount, about $90 million for one person.

 

Not only that, Russia is also an important engine supplier for the US space and national security programs from 2000 to the present. For more than 20 years, the US still uses Russian-made RD-180 engines or improved versions based on this engine model. A NASA article wrote: "The RD-180 is an extremely reliable engine, powering all 87 Atlas V missions to date, as well as the six prior Atlas III missiles that preceded it without any anomalies affecting the mission". Use of the RD-180 is expected to continue through 2022 following a special amendment to the US National Defense Authorization Act of 2015, allowing the use of 18 more rocket engines designed or manufactured in Russia, although the United States has tried to end its reliance on Russian-made space technologies. In addition, Russia has made high-tech achievements in the space field, including the third largest number of launches in the world in 2020 with 17 launches, never failed.

 

The fourth is that Russia is the world's largest wheat producer in 2021. According to the United States Department of Agriculture, Russia has produced 38.5 million tons of wheat and wheat products, more than any other country in the world and the European Union. At about $300 a ton, wheat exports bring Russia more than $11 billion. In addition to wheat, Russia is also the world's sixth-largest coal producer according to the International Energy Association, with briquette exports in 2019 worth $17.6 billion.

 

Besides, the gem export segment also brought Russia about $ 61 billion in 2019. Russia is also the 5th largest iron producer in the world, the 2nd largest producer of aluminum, gold and platinum. 6th in copper, 3rd in Nickel and the top diamond producer in the world.

 

Russia's economy is also very strong in services. According to the data of States Star, Russia's service sector accounts for more than 50% of GDP. Although oil and gas services also contribute to this number, they are not overwhelming. The services that make Russia the most money are finance, retail, telecommunications, electricity and transportation.

 

Thus, the Russian economy is very large and has an important global position. In addition to oil and gas, which currently accounts for only 15% of GDP, Russia also has a very developed service industry. The Russian economy is also very diverse, from aerospace to exports of gems, weapons, metals, food and nuclear technology. So if it is said: "Russia only has oil and a few nuclear warheads", then that assessment is too wrong about Russia. Thank you for watching the whole video, goodbye and see you again.