Thursday, March 13, 2014

Countries Which The Gods Wish To Destroy Are First Given Excessive Oil-Rents

The Russian internet is going dark. This will have indescribably bad effects.

Russia's single greatest economic asset is not its energy sector, which is burdened by legacy investments, transportation issues, and rapidly increasing production costs, and is in any case simply not big enough to drive a middle-income economy. Russia's ace card is its software sector, home to world-class firms such as Kaspersky and Yandex.

But if Russia takes over the Crimea, and all the evidence suggests this is indeed the plan -- then Russia's software sector is over. Done. Finished. No other country in the world will ever use Russia's digital services, ever.

Let me be clear.

I have enormous respect and appreciation for Russian culture, and enormous love for the long-suffering Russian people.

I am not a fan of NATO or of US imperialism.

But I'm watching a medium-sized country with smart intellectuals and pragmatic leaders commit geopolitical suicide in front of my astonished eyes. Seriously, did someone douse the Kremlin's water supply with LSD? Crimea is an economic albatross which costs the Ukrainian state $820 million in annual subsidies. It will cost Russia that much, plus billions of dollars more just to pay the pensioners. Throw in 200,000 angry Tatars, and you have a potential ethnic cauldron ten times worse than Chechnya. But wait, there's more: you'll also earn the undying hatred of every single Eastern European citizen, as well as a raft of EU sanctions.

One of the bitter jokes circulating around the Russian internet these days goes like this: "Don't exaggerate about the repression, we're not North Korea, we're only China." The punchline: "For now."

Not all is lost. Some Russian artists, writers and other luminaries are still resisting.

In 2012, Ukraine was an impoverished, failed state ruled by a crumbling autocracy, while Russia was a dynamic economy with a successful - albeit imperfect - democracy. If the annexation happens, Russia and Ukraine are going to switch places.

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