July 6, 2023 - 5:00pm
Virtually every forecast, whether it concerns the war in Ukraine, the economic outlook, or the strength of far-Right parties, has a tendency to end up worse than expected. The one thing that is running better than expected is the Russian economy, with the country’s GDP growth currently outperforming Germany’s.
This is not a statement about the likely outcome of the war. Given enough Western support, Ukraine stands a good chance to regain some, if not most, of its Russian-occupied territories. But the Ukrainian counteroffensive, too, has been running below expectations so far. We can conclude, therefore, that there is something wrong with how we form expectations.
Mikhail Mishustin, the Russian Prime Minister, yesterday presented Vladimir Putin with an economic update, estimating that the economy will grow by 2% this year. Russian GDP caused a surprise by only going down 2% last year, following forecasts of a collapse of double-digit percentages. And so the aggregate effect of Western sanctions, the largest ever imposed on any country, has thus far been a minor and short-lived recession.
The 2% projection is at the upper end of forecasts, but not outrageously so. Reuters polled economists who came up with a consensus of 1.3%. The IMF has 0.7%. The Vienna Institute for International Economic Studies, which specialises in Central and Eastern Europe, put it at 1%.
These are astonishing numbers. When I wrote last year that the sanctions were failing to achieve their primary purpose of denting Putin’s war machine, I was told that the effect should be measured over a longer period. That is entirely fair: it’s the long-term effect that matters. Yet this is precisely where I would argue the sanctions are failing. Russia has succeeded in realigning its economy, evidently with the help of massive sanctions leaks through Central Asian republics, and with the assistance of China and India.
The German outlet FAZ quotes Vasily Astrov, a Russia expert at the Vienna Institute, citing two reasons for Russia’s economic resurgence. The first is the war economy, a classic Keynesian boom similar to what happened in the US and the UK during the Second World War. The second is the rise in real wages. This is in contrast to the West, where real wages are falling because of high inflation. In Russia, though, inflation is falling, from 14% at its peak last year to under 5%.
The argument in favour of sanctions was to make ordinary Russians worse off, so that Putin would lose domestic support. This has not happened, with private consumption now back at the 2021 level. A less benign factor behind the rise in real wages is acute labour shortages due to the draft.
Russia’s biggest vulnerability going forward is liquidity, but this is not a question of do or die. The country has suffered a loss of oil and gas revenues, as well as an increase in cost this year. This will result in a budget deficit, which Russia estimates to be 2% of GDP. The Vienna Institute, meanwhile, is forecasting 3.5%. In the last year, forecasts and commentators have claimed that Putin will literally run out of money by next year. This is not going to happen, as these forecasts are based on unrealistic scenarios, such as a total oil and gas embargo. Excessively optimistic military forecasts follow a similar trend, based as they are on unrealistic extrapolations about the level of Western support.
The economic situation in Ukraine remains dire, unsurprisingly, and most of the other Eastern European countries are currently registering the beginning of a recession. Since many of them are dependent on the German economy, the recession there is dragging them down.
Evidently, then, the combination of the Ukraine war and the resulting sanctions constitute a fairly symmetrical economic shock to both Europe and Russia. That is not what was expected. Policymakers would be well-advised to remember that economic sanctions are a powerful tool, one which should be handled with care. It is worth asking whether those making decisions, in the White House and the European Commission, know what they are doing.
This is an edited version of an article which originally appeared in the Eurointelligence newsletter
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Subscribeshe’s not stepping down and she didn’t get fired following the Daniel Morgan inquiry which found the MET to be ‘institutionally corrupt’ with Dame Cressida personally censured for obstruction . She’s the modern establishment through and through, says all the correct Guardian / BBC talking points, meanwhile knife crime soars. She is more interested in policing hurt feelings than stopping or solving crimes. The MET is rotten this case has showed they cant even vet their own officers properly.
BTW, Dame Cressida is not liked by the Guardian
I don’t disagree with your sentiments. However, the question remains. Why has she not been forced to resign? She is the obvious scapegoat that could be sacrificed so that the Met continues as before, unreformed, corrupt and criminal. The only feasible answer is that she knows where bodies are buried. Might that include the truth behind the murder of de Menezes ?
…more likely the truth behind the Tory/Establishment “paedophile ring” that not only wasn’t, but was probably deliberately confected by the Labour Left…although why a Tory Home Secretary is backing her is a mystery…
She was involved in that too.
So Menezes, Carl Beech and now Sarah Everard: there is nothing a lesbian can do that’s so bad it gets her fired.
This is just bizarre. I would love to know what the met could have done differently to stop this guy.
His own wife had no idea he was capable of anything like this.
Why does someone at the Met have to ‘pay’ – just to make people feel better? The person responsible for this will never see the light of day.
I think as smarter people than me have pointed out that liberalism paradoxically leads to god being replaced by the state. An omnipotent creator is replaced with an omnipotent administrator an illusion of god like powers is projected onto institutions.
This spiritual attitude is now completely widespread in society and the media. They have delusions about the competency of human institutions because of a lack of understanding of the tragedy of life.
It maybe harder to accept that sometimes you can do almost everything right and something terrible still happens – but just because this is hard doesn’t stop it being true.
Well said.
They could have sacked him for the indecent exposure incident in 2015 or the flashing incident 3 days before he murdered Sarah Everard, for example.
If that’s true then then should have prosecuted him with the fullest force of the law. It’s a double crime, the first for the crime itself and the second for the abuse of a position of responsibility.
These were not officially “incidents”, they were alleged to have happened, that’s all. Only now can we surmise they were probably true.
One of the incidents was recorded on CCTV
I think there is some truth in this. The death of God has led to the elevation of the state to replace him. Likewise, no longer believing in an after-life leads to a preoccupation with extending this one ad-infinitum and the growing fetishisation of ‘safety.’
Completely agree with you. The abolishment of God means we set ourselves or others up in His place.
There is lots of evidence that Couzens was a bad’un e.g. exposing himself, swapping extreme pornography and even that fact he was called ‘the rapist’ by colleagues (all listed in articles on the BBC web site no less).
As for Cressida d**k, she is at the centre of many errors by the Met Police e.g. the Jean DeMenendes shooting. The woman is a walking train wreck.
It is clear to anyone by d**k that discipline in the Met Police under her command is non-existant.
Waving down a bus! It’s difficult enough to get them to stop at a bus stop if their timetable is out of line.
I agree with Joan Smith here. This is a failing so bad that it has torn the very fabric of our society. Sacking the idiotic and utterly incompetent Cressida (I am not allowed to type her surname…LOL) should be just the beginning. There then needs to be held a thorough investigation in to what the Police should be via a vis what the Police have become. Years of stupid, woke and nonsensical policies have taken focus away from real crime and allowed this ghastly state of affairs to have unfolded.
She was also in charge of the operation that killed Jean Charles de Menezes. She should have been sacked then.
Not sure that is fair to Dame Cressida. The firearms officers were clearly sent into the tube with orders to liquidate Jean-Charles de Menezes on sight, but the people to blame are those who briefed them, and/or those who set the general guidelines for using firearms in a a terrorist situation. Dame Cressida did neither, AFAIK.
Of course it is a scandal that the police decided after de Menezes that no one made any mistakes, there were no need to change any procedures, and in short they had every intention of acting the same way next time. But if there are no consequences when the police kill the wrong person ‘by mistake’, why do we get so het up because there was a single criminal in the police?
“But if there are no consequences when the police kill the wrong person ‘by mistake’, why do we get so het up because there was a single criminal in the police?“
Because there were no consequences from one massive f!!k up, we should NOT be concerned about a subsequent one? Well, that’s how it reads.
I can see your point – it is a line of argument I generally abhor. But I think there is a disproportionate reaction in this case, compared to de Menezes. Granted, it is scary to feel that the next policeman who stops you might be a rapist. But how big a ‘f!!k up’ was this? Do we even know? There can be rapists in any profession – including policemen. Cousens had clearly never done it before. So, did he give clear signs that he was a likely violent criminal, ahead of time? Should he have been investigated or fired on what was known back then – and how many (hundreds?) of other policemen would have triggered the same flags without proceeding to rape anybody? Of course this should be investigated, to see what can be done better next time. But we ought to wait to react till we know the answers.
Why such a big reaction, then? No minister gave interviews about guaranteeing that ‘this should never, ever, ever, ever, ever happen again‘ after Jean Charles de Menezes – or John Worboys. An important reason, IMHO is that this fits into an existing agenda. There are people who already want to change police culture, recruit different people to the police (which people, and from where?), change the power relationships inside the force (to favour whom?) massively increase the resources given to rape cases (and take them from where?). and generally move towards a more feminist society. And so this rape case is a useful handle to push for changes that people already want fo other reasons.
The important thing of course is she went to the right school and university and knows the right people.
Some years ago I socialised with a good number of Met police officers. Some were great guys, but some we always thought were attracted by the uniform and the power it gave them. They really should not have been police officers. Human nature being what it is, I have no reason to believe this has changed.
So we mustn’t recruit police officers who are attracted by the uniform and the power it gives them. How’s that going to work?
It works by putting applicants through a thorough psychological assessment that weeds out people who are seeking the job for the wrong reasons and should not be allowed to carry weapons have authority over other people. Not a perfect system but better than not doing anything.
And once she’s gone can we replace her with someone that won’t just set all their PC PCs at their PCs to make sure we are all being PC?
she’s not stepping down and she didn’t get fired following the Daniel Morgan inquiry which found the MET to be ‘institutionally corrupt’ with Dame Cressida personally censured for obstruction . She’s the modern establishment through and through, says all the correct Guardian / BBC talking points, meanwhile knife crime soars. She is more interested in policing hurt feelings than stopping or solving crimes. The MET is rotten this case has showed they cant even vet their own officers properly.
There is an interesting lecture by Tom Ricks arguing that theUS army was more effective in WW2 because Marshall was willing to move Generals who weren’t succeeding or had lost the confidence of their troops and often redeploy them where they would be a better fit.
Unfortunately there is a reluctance to move senior police officers even when they are not succeeding. That said Cressida D.should probably not have reached the rank she occupies because of previous failures but is not really responsible for the failures to identify Sarah Everard’s killer as unsuitable to continue as an officer. In any case had he been dismissed from the force there was nothing to prevent him using a fake warrant card to carry out his abduction and murder.
In France they have recently identified an ex-police officer as a serial killer, so it’s not just a Met problem.
Apparently, one of the reasons for not replacing Cressida D.is that the next obvious choice is even more of a woke obsessed nightmare.
I used to have a connection with Metropolitan Police Recruitment. It was acknowledged that quite a high proportion of applicants were further towards the criminal end of the aggression scale than was desirable. On the whole, they tried hard to filter them out. Of course, you do need a certain amount of aggression and mental toughness to deal with the grim events that the police cope with, so it’s a hard balance.
I do feel, though, that if I had worked in an organisation where someone was nicknamed, openly, ‘the rapist’ – and not as sarcasm- I would have raised this with my bosses and they would have certainly been concerned.
It will take more than sacking one person to effect change.
And while I don’t wish to belittle your concerns as a woman, it isn’t just women who are being let down by our police force.
I have no insight in the work and/or leadership of the C. d**k but asking to sack somebody does not always solve the issue. Should we not consider that ‘she will take the blame’ is sent away and somebody else comes in and nothing changes if she is sacked…??. Bad habits in the police will sadly not change overnight, they change little by little over sad events as the ones discussed here: society asking questions .. It is never just, fair or right, it is the always a too slow evolution for the better (sometimes) of our society.
Obviously the Met Police like other forces has many problems, most of which go back many years. But this knee-jerk ‘sack someone’ is a rather depressing if all-too-common reaction. Just rearrange the deck chairs.
This article is an amazing combination of woke idiocy and some sensible thoughts.
The “vanishingly small” conviction rate is because these crimes are very hard to prove in an objective way, unless we throw out due process and “#believeallwomen”. Given that there are women who are crazy/vindictive/criminal and those who think that being whistled at is the same as being held at gunpoint and raped, convicting every man who is accused is a bad approach.
The other trope here is using anecdotes to make it sound like abusive, criminal, misogynist police are more common than not. To actually mean anything one needs a denominator. I can give lots of anecdotes of horrible car accidents. Are they “common”?
Perhaps a good way to work towards better policing is to realize that most police are decent folks working in a supercharged political environment trying their damndest to do a reasonable job. Start there, point out the bad apples, and leave the rhetoric aside.
You may be right, but we don’t know. However, this comes over as a little bit like the whining of the so-called victims whom I (and probably you) abhor.