Perception vs. Reality

At times, the world continues to regard Russia as a super-power. The attention paid today to the Trump/Putin Helsinki summit is just the latest example of a long-standing perception-reality gap.

The perception of a powerful Russia must be based on its nuclear arsenal, or on its vast store of natural resources, or perhaps on its propensity to foster political instability, in a number of countries, in a variety of ways. It certainly has no basis in the size or dynamism of its economy. Thus, Russian nominal GDP in 2016 was US$ 1.28 trillion, below that of, for example, South Korea's $1.4 trillion (and well below China's $11.2 trillion and America's $18.6 trillion). To continue the comparison, South Korea's GDP per capita in 2016 was over $US27,000, compared with Russia's $8,500. Put another way, South Korea's 51 million people have become considerably more productive than the 144 million Russians. Many similar country comparisons can be made; indeed, Russia compares poorly even to just a single American state - New York - with the latter's gross state product of some US$1.5 trillion and its GSP per capita of nearly $60,000.

One conclusion from this: political corruption combined with one-party political structures do not support economic growth and productivity over the long-run. Chinese leaders should take note, and Russians should be far wealthier.