Venezuela 2.0 is no longer loading. It is reality.

History is not only about dialectics but also about inertia, momentum, and convexity and this is why many have failed to see Russia’s collapse coming. Last year, The Economist was publishing ridiculous stories about Russia withstanding sanctions. The reality is very different, however. Already we could see that Russia was in for a disaster, but a little bit more than one year after Russia’s invasion of Ukraine, Venezuela 2.0 is no longer loading but has become Russia’s new reality. It’s only going to get exponentially worse for Russia from now on.

You can’t deplete your economy from your major monetary revenues, disengage from the US Dollar and the international financial system, and still expect to have economic stability just because you are a big country: on the contrary, your problems will be bigger in magnitude, and less manageable, so it’s going to be even worse than Venezuela. Gazprom knows this and this is why it has formed its own military units: to prevent mobs and other armed groups from stealing its infrastructure. Gazprom is not arming itself against foreign threats because its biggest security threats are now internal.


  1. Kemm sejjer zball, habib…Nehhih dan il post ghax sejjer zball bi kbir. Jidher car li ma tafx x qed jigri fil-Ukrajina u min orkestra din il-gwerra finta sabiex imexxi l-interri tieghu/ taghhom! Jekk jogghbok ibda hares lejn il possibilta li l-Amerika hija il-kawza u l-kankru ta’ kull gwerra li qalet min wara it-tieni gwerra dinija lill hawn. It-tmexxija ta\ l-Amerika mhux f;idejn il-politikanti qeda izda f’idejn il-familji elitisti li xtraw u jiffinanzjaw lil kandidati Presidenzjali sabiex jibqaw jmexxu l-politika barranija Amerikana skond l-interessi tan negozji enormi konglomeri taghhom. L-Ukrajina (mhux ir-Russja) mill l-istess triq ghaddeja li ghaddew qabilha l- Vjetnam, l-Afganisthan, l-Iraq fil-Golf (gabu skuza b Saddam), is-Syria (gabu skuza Assad), Il-Libja (gabu skuza b Gaddafi) u issa skuza ohra B Putin. L-Amerika hija l-infern li hawn fid dinja b’kull gwerra li krejat bi skuza ta’ dittatur sabiex tidhol u tisraq ir rizorsi enormi u s-sovranita ta’ kull pajjiz (inkluz taghna min wara l-formazzjoni ta’ l-EU). Nahseb ghandek bzonn tindanga sew dwar il-verita fil-fond Mark. Nammira x-xoghol li qed taghmel sabiex tikxef il-korruzzjoni u l-korrotti f’pajjizna u hekk ghandu jkun, izda nahseb ghandek idea zbaljata enormi dwar min vera huwa l-hazen fiziku u spiritwali li qed jeqred lill din id-dinja. Ara dan il video meta jkollok cans halli tifhem ezattament x’inhi il-verita…

  2. The reports about the Russian economy’s resilience are not “ridiculous”. They are based on how the Russian government has so far managed to prevent the economy from collapsing despite the massive sanctions, but also come with many caveats.

    For one thing, Russia is selling more oil than ever to Asian countries, although at huge discounts. Secondly, despite being largely cut out of SWIFT (some banks reportedly have not been cut off yet), Russia is trading more in yuan, gold and roubles, and importing more products than ever from friendly countries like Serbia and Kazakhstan. Thirdly, Russian oligarchs are grabbing assets (at low prices) that Western companies left behind when they abandoned the country, and expanding their own businesses that way. Fourthly, the showiest sanctions, such as banning elites from travelling to Western countries, and seizing their yachts and villas, do not affect the average Russian citizen. Lastly, Russia has vast wealth reserves and is reportedly only spending about 3% of its gross domestic product on supporting the war, so a sense of normality can be maintained in the country.

    What those reports are saying is therefore that Vladimir Putin has built a fortress economy that can persevere through economic warfare. However, they are also saying that workarounds to sanctions are becoming ever more elaborate and costly, and that the quantity and standard of goods on Russian shelves, and therefore the standard of living, is deteriorating. Most importantly for the context of the war, they are saying that considerably raising spending on the military campaign would accelerate the decline of living standards and probably increase opposition to the war within Russia, which means that the sanctions are having the desired effect even if they are nowhere near bringing the Russian economy to its knees.

    Without raising spending on the war, it is difficult to see how Russia may start winning on the battlefield, but throwing more cash (and men) into the meat grinder would disturb the careful but precarious calibration that has so far managed to both keep the war going and prevent vast social unrest at home.

    Please note that there is nothing new about this. Cuba has withstood an economic embargo from the United States for over fifty years. Iran is an expert at smuggling oil and goods to work around financial restrictions, while also finding enough money to invest in controversial nuclear energy and fight proxy wars abroad. And, despite the sanctions imposed on it for years, Venezuela is currently quietly being rehabilitated by none other than the Biden administration in the United States (because Venezuela’s oil is a useful substitute to Russia’s), as well as the many newly elected left-wing governments in Latin America, which are less bothered with Nicolás Maduro’s dictatorship than their predecessors, and just want to have a more stable neighbour.

    The bottom line is that there is scant evidence showing that sanctions can bring about an immediate collapse of a country’s economy (although they do definitely bring shortages and increase suffering) or a change in a country’s regime. What governments in countries under sanctions need to do to stay in power is manage the suffering so that deterioration in living standards happens gradually rather than all at once, lower their citizens’ expectations of what a good life is like, and persuade them that the pain is stemming from outsiders (not hard to do when you are under sanctions) not the local government itself, and is anyway for a bigger political cause, and so must be endured without too much grumbling. Under a sanctions regime, survival is what constitutes ‘economic success’, not great foreign direct investments and exports to Europe or America. What the reports are therefore saying is that Vladimir Putin’s Russia is clearing this low bar.

    The sanctions are working, but only in denying Vladimir Putin the opportunity to boost spending on the war, not in completely crushing the Russian economy and bringing about his political demise. The Russian economy is chugging along, more sluggishly and creakily than before the war, but chugging along nonetheless. That may of course change quickly if Putin becomes increasingly desperate for a military win and goes ‘all in’ on the war, massively raising spending, conscripting ever more men to fight, and disturbing the careful equilibrium described above. But he is no doubt aware that that would come at huge political cost, so he will try to avoid that.

    Putin’s strategy for ‘winning’ the war under a relatively stable national economy would be to prolong the fighting until, hopefully, a new American administration less favourable to spending money on Ukraine is elected, making Western resolve in general weaker. Shorn of resources and tired of dying, Ukrainians may then be willing to negotiate on Putin’s terms, allowing him to save face even though the military campaign as originally envisaged has been a total failure. If Ukraine and the West stay strong past 2024, it is more likely that Russia will either have to cut its losses and retreat or go ‘all in’ on the war, regardless of the economic and social harm this may bring.

Leave a Reply