What Makes the Economy Soar in Russia?

Walls Street Journal writer Guy Chazan reports in today’s edition of the Journal that segments of the Russian economy are soaring right now, thus providing Vladimir Putin with an approval rating of nearly 70%, an unheard of number since the fall of the Soviet Union. The reason is quite simple—segments of the Russian economy are finally growing, and growing at a rapid pace, producing new and better paying jobs and directly raising an ever increasing number of people out of poverty.

Quite simply an investment boom is transforming Russia’s industrial landscape. Recently Belgian investors put $100 million into Bor’s growing car industry which is producing Western automobiles, including the Ford Focus. (The city of Bor was once the center for military hardware production and an awful and dreary place!) Since Putin’s election in 2000 the per-capita gross domestic product of Russian has quadrupled and it is now estimated that 20 million people have been directly lifted out of poverty. Not only is the Ford Motor Company expanding production in Russia so is Intel. Opinion polls show Soviets are optimitic about their future for the first time since 1989.

What happened? When the 1998 financial crash hit Russia hard domestic manufacturers were able to compete again with costly imports. Factories were reopened and global trade began to grow. An influx of money from outside grew business and the rest is history. Now businesses are putting their profits into fixed capital. Assets such as machinery and new buildings are the end result. Last year investment rose in Russia by 13.5%, an unbelievable figure really.

Besides the new freedoms, and the encouragement to invest in Russia, the nation is no longer pouring its economic resources into military hardware, but rather into technology, usable products and services that are peace related. A combination of the free-market, and the break-up of a military-based economy, have provided a new opportunity for Russia to become competitive economically and thus to lift people out of destructive grinding poverty.

This story makes me wonder why anyone could ever truly think that a socialist system, with an ideological commitment to world domination, would truly give people the personal freedom they desire and thus provide them with the kind of jobs that would reduce real poverty. Now if Russia can find a means for adding Christian virtue into this mix it may have a very bright future. Crime, drug abuse and alcoholism are still major problems in Russia.

The jury is clearly out on the last part of this equation since the communists starved the people spiritually for seventy years. One can hope that both the moribund Orthodox Church, and thoughtful and intellectually serious evangelicals (there are a lot of the other kind in Russia dumping the prosperity gospel on the people in boatloads), could be key players in making a real difference. Let us pray so. The world will be a better and safer place if Russia has a strong economy for a generation or more to come. Who knows, America could collapse economically and socially at some point and countries like Russia would play a much bigger role in the world for peace and the gospel than we would ever have imagined only a few short years ago. The Christian should always think long-term about these things, not short-term.

I still remember evangelicals talking about an end-times Russia that would be the complete enemy of everything virtuous. This could still happen but I think we would be wise to pray for revival in the Russian Church. Before 1989 who could have imagined this turn of events? God is still the Lord of history. America may be forgetting this at the precise time when Russia is rediscovering it. Who knows?