The Russian Aerospace Industry is Rapidly Recovering

This about Economy, tagged , , was written by for on September 2, 2013

More info against the Department of Russia Only Produces Oil and Vodka: Here are some graphs of Russian aerospace manufacturing courtesy of the Reality vs. Myths blog. (2013 figures are projections).

russia-helicopter-construction-gloriaputina

Total helicopter construction has now basically converged with the levels of the late RSFSR.

russia-aircraft-construction-gloriaputina

Aircraft construction is only halfway there, but its state is nonetheless leagues better than it was in the depths of the post-Soviet freefall. As the blogger points out, its poorer performance via-a-vis helicopters can be explained by the fact that the technologies used in Soviet civil aircraft was outdated, so the Russian industry essentially had to start over from scratch. Nonetheless, it seems to have reached the point of a rapid further up-trend, presumably driven by the Sukhoi SuperJet 100 as it enters mass production. The United Aircraft Corporation, the holding company into which independent Russian aircraft companies were consolidated in 2006, projects production increasing to 160 units by 2020.

Russians Produce 7 Cars For Every 10 They Buy

This about Economy, tagged , , , was written by for on March 28, 2013

One common trope about the Russian economy is that it has virtually no manufacturing to speak of and lives off “oil rents” that can collapse any day.

Whiles there is a small nugget of truth to this assertion, but by and large it is simply false. It is true that a great chunk of Russian exports do accrue to hydrocarbons and metals, because that is its comparative advantage in trade. That said, there are plenty of Russian products on the domestic market. The automobile industry is a good and representative example of this because they it’s a stalwart of many national economies and there exist reliable and easily accessible statistics on it.

Car Production Car Sales Autos self-sufficiency
Czech Rep. 1,178,938 193,795 608%
Mexico 3,001,974 987,747 304%
South Korea 4,557,738 1,530,585 298%
Poland 647,803 328,532 197%
Japan 9,942,711 5,369,721 185%
Germany 5,649,269 3,394,002 166%
Turkey 1,072,339 817,620 131%
China 19,271,808 19,306,435 100%
Argentina 764,495 832,026 92%
Brazil 3,342,617 3,802,071 88%
South Africa 539,424 623,921 86%
France 1,967,765 2,331,731 84%
Russia 2,231,737 3,141,551 71%
USA 10,328,884 14,785,936 70%
UK 1,576,945 2,333,763 68%
Sweden 162,814 326,441 50%
Italy 671,768 1,534,889 44%
Ukraine 76,281 263,604 29%
Australia 209,730 1,112,132 19%

As such, I decided to compile a representative list of countries, with data on production and sales for 2012 drawn from OICA, in order of the ratio of their auto production to new auto sales – that is, their degree of self-sufficiency in cars.As we can see above, while Russia is perhaps rather lower than average, its domestic auto manufacturing industry nonetheless manages to satiate 71% of demand for new cars.

This is quite comparable to France, the US, and the UK, and is vastly higher than a similarly resource-dependent rich country, Australia. Quite a lot of other resource-heavy countries like Saudi Arabia, Venezuela, and Norway don’t produce cars at all. Mexico is a huge exception, but the reason for that is that it borders the US and the US has outsourced quite a lot of its auto industry south of the border to take advantage of lower labor costs – a situation analogous to the Germans’ outsourcing of car production to Spain in the 1980’s, and Central-East European countries like the Czech Republic, Slovakia, Hungary, and Poland in the 2000’s.

Russia Now Produces As Many Cars As The USSR Did At Its Peak

This about Economy, tagged , , , was written by for on February 25, 2013

As I write the book, I create a lot of graphs. Here is one of them.

russia-automobile-production

So in manufacturing terms, as far as cars are concerned, the “deindustrialization” era is decidedly over.

Of course it’s also important to note that in 1985 they were producing this whereas today they are producing this as well as various foreign brands. Plus for every two cars produced and sold in Russia today, one is imported, for total yearly sales of 2.9 million in 2012 (about the same as in Brazil – 3.6 million, Germany – 3.3 million, and India – 2.7 million).

China, The Last Superpower

This about Futurism, tagged , , , , , was written by for on February 7, 2010

After two hundred years of global ascendancy, the West is in rapid relative decline to (re)emerging Asia, which is mounting a steady “Great Reconvergence”. Likewise, the legitimacy of today’s “neoliberal internationalist” order promoted by the West is being questioned by the more statist, neo-Westphalian visions of the leaders of the Rest, the so-called BRIC’s. This has already led to the emergence of a “world without the West” – a parallel international system based on the principles of state sovereignty, hard power, and bilateral trade relations.

The most powerful and influential member of this new world is China, which has become the “workshop of the world” since its graduated opening up from the late 1970’s. Accounting for half of global steel and cement production, China has built up an enormous infrastructure of roads, railways, and ports to support its mercantile expansion. In 2009 it became the world’s largest automobile market. Furthermore, China is now advancing higher up the ladder of added-value industries by expanding into hi-tech areas such as commercial aircraft, renewable energy, and supercomputers.

One of the most important factor making China’s rise all the more significant is that it is concurrent with the accelerating decline of Pax Americana that is spurred on by the end of cheap oil, US economic weakness, and regional threats to American hegemony from the “challenger Powers” (e.g. Russia, Iran, and China itself). Should the current international order suffer a “cascading collapse” – which is not unlikely, given the brittleness of the world financial and energy system – then it is possible that China will emerge as an equal, or even superior, pole to the US superpower as soon as 2020.

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Book Review: Ha-Joon Chang – Kicking Away the Ladder

This about Economy, tagged , , , , , was written by for , on October 19, 2009

Chang, Ha-Joon – Kicking Away the Ladder: Development Strategy in Historical Perspective (2002)
Category: economy; history; industrial policy; Rating: 5/5
Summary: Kicking Away the Ladder:How the Economic and Intellectual Histories of Capitalism Have Been Re-Written to Justify Neo-Liberal Capitalism (Ha-Joon Chang)

Much has been said of the smug arrogance, cultural aloofness and end-of-history conceit characterizing the neoliberal Washington Consensus, the philosophy that a one-size-fits-all set of “good policies” (e.g. privatization, liberalization, deregulation) and “good institutions” (e.g. patent and IP protection system, etc) can – and must – be transplanted onto any country, irrespective of its historical or cultural traditions, if it were to ever join the developed “international community’. The general bankruptcy of this approach is evident from the facts on the growth, with global GDP growth during the 1960-1980 period of “bad policies” substantially higher than during the “good policies” 1980-2000 period. After seeing high growth during the earlier period, Latin America stagnated, and Africa and Eastern Europe declined during the latter; the major exception was mercantilist China.

Though always disabused by reality, from 1998 Russia to the 2008 crisis, the neoliberals retain their intellectual underpinnings by continuing to claim, like Marxists, that history itself is ultimately on their side – after all, did not Britain and the United States, the world’s greatest economic successes, rise to global preeminence through the virtues of minimal government and free trade? Not at all, argues Ha-Joon Chang in this excellent book.

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Book Review: John Scott – Behind the Urals

This about History, tagged , , was written by for , on September 3, 2009

Scott, John – Behind the Urals: An American Worker in Russia’s City of Steel (1941)
Category: history, Soviet Union, Stalin; Rating: 5/5

Fear and Fervor under Stalinist Industrialization

The Great Depression of the 1930’s, with its iconic images of well-dressed bourgeoisie in soup lines and gaunt figures with hopeless eyes from the Dust Bowl, challenged the prior American consensus that their system of liberal democracy and free markets was the pinnacle of social and economic organization. Upon graduating from a radical educational program at the University of Wisconsin, John Scott had few permanent job prospects. Coupled with the legacy of his family’s freethinking, non-conformist background, youthful wanderlust and socialist sympathies, he obtained a welder’s certificate at a General Electric plant at Schenectady and set out to discover Soviet civilization – Steffens’ wave of the future, Sloan’s ‘country with a plan’ and in his own pseudonym’s words, ‘the place where there is work to be done is now among the workers themselves’.

The book is a fascinating compendium of observations of Soviet proletarian life in the 1930’s from the point of view of an idealistic but objective American fellow traveler living and working in the model city of Magnitogorsk. He successfully bridged the polar Western views of the USSR of the times, which ranged from the Scylla of the right who claimed it produced nothing but ‘chaos, suffering and disorder’ to the Charybdis of the Communists who held it up as a panacea. His thoughts on this are well worth quoting in full, especially because of their resonance today:

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