Can Russia afford to be a great world power?

POOR Russia. The country is not only struggling economically, but it also faces an uphill battle to keep its superpower status.

Russian President Vladimir Putin has been behind his country’s recent surge in nationalism. Picture: Dmitry Lovetsky/AFP

POOR Russia. The country is not only struggling economically, but it’s also fighting to keep its superpower status.

And if the current economic situation is anything to go by, Russia risks losing it all together.

Those are among the key findings in a new analysis by the Lowy Institute which questioned whether Russia can afford to be a great power.

Written by Stephen Fortescue, the report said that Moscow wants to be recognised as one of the world’s great powers, but is restrained by resistance to policy action and its own economic limits.

It also notes the Russian economy faces renewed challenges including stagnant growth, falling oil prices and sanctions.

Meanwhile, remoteness, climate, market size and the location of its industry make it increasingly difficult for the Russian economy to remain globally competitive.

Russia is doing okay economically for now, but for how long? Picture: Kirill Kudryavstev/AFP

ASSERTIVE RUSSIA

The analysis notes Russia has restarted itself strongly in the global sphere in recent years and that it took place during a period of rapid economic growth and nationalism, largely driven by President Vladimir Putin.

While acknowledging Russia’s desire to be a great power poses a challenge to western policy makers, it notes “there is a spectrum of ‘greatness’ along which Russia can place itself.”

“Its economic autonomy is tenuous, in terms of policy commitment and reality,” Fortescue wrote.

“Its control over its claimed sphere of influence is limited, certainly when compared to Soviet and even Tsarist times. And its activities in the far abroad are limited in scope and nature.”

The Russian economy ranks sixth in the world by size based on 2015 GDP purchasing power parity, but it is classified as an upper middle-income country by the World Bank, along with countries including Albania and Venezuela.

The country also faces problems such as uncompetitive industrial enterprises located in remote and inhospitable regions and a large, ageing population.

Russia is plagued by a “resource curse” which crowds out other forms of economic activity.

But Russian nation-building failures has resulted in “a great power complex, producing a need to engage in great power behaviour even if it cannot afford it.”

Russia has been undergoing development but faces economic restraints. Picture: Natalia Kolesnikova

SUSTAINED POWER

The analysis also raised the question of how long Russia’s quest for power can go on given the battering the Russian economy has suffered in recent years.

When the economy was in good shape prior to the 1998 devaluation crisis, questions were raised as to how long the good times would last given Russia’s excessive reliance on energy exports and oil prices.

While the economy is far from in ruins, the report noted it’s not exactly healthy with a tight fiscal outlook forecast.

Economic growth is also slow with Russian GDP growing by only 1.5 per cent between 2008 and 2016.

With several factors at play, the author concluded Russia will be as much a great power as it feels it can afford.

However questions remain how much it can afford and also raises the point it may not even be able to afford its current relatively modest level of great power behaviour.