According to the latest estimates, Russia will lose 15 percent of its GDP this year, Ukraine much more.
Few experts speculated that Russia would attack Ukraine. Ani few believed the conflict would continue for a fourth month without the looming peace in sight.
Nor has he been a professor of eastern trade at the University of Turku, who has followed Russia and Ukraine for 30 years Kari Liuhto. He estimates that he is now witnessing a similar collapse of the Russian economy as a young researcher.
– It is in the same category as in 1992, when the Soviet Union had just disintegrated. It is estimated that about 15 percent of Russia’s gross domestic product will disappear this year, Liuhto reflects in Turku Cathedral Park.
Those numbers are just a memory.
– Economically, Russia is disappearing from our map. There are still remnants of exports and imports left, Liuhto says.
Three times the economic devastation of the Winter War
Gross domestic product GDP means the value of all goods and services produced in the country during the year. Russia’s 15 percent drop is already being felt in the nation’s bones and cores. Liuhto seeks a comparison from recent history: Finland’s GDP fell by five per cent due to the Winter War of 1939–1940.
– These figures are terrible, Liuhto says.
About half of Ukraine’s export earnings come from agricultural products and food. Russia has blocked Ukrainian grain and food exports in the Black Sea, which has already led to a global food crisis.
Russian IT professionals are flocking west
Russia’s economy is nowhere near the size of the EU, the United States and China, but its abundant natural resources and strong nuclear-based defense make it a relatively important player in the global economy.
Russia was invited to the G8 group of leading industrialized nations in 1998, but was excluded after it occupied the Crimean peninsula in 2014.
Russia’s economic sanctions are hitting the country’s transport sector and the energy and forest industries in particular.
Surprising effects of the war have already emerged. The brain drain from Russia to the west has grown exponentially.
– About 150,000 Russian IT experts left the country in March-April. Mostly to the United States and Israel, Liuhto says.
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