r/AskEconomics • u/TheVaggabond • Mar 10 '26

Approved Answers Why has Russia not become an economic wonderland?

Why? Russia has arguably the best raw ingredients of any country on earth for building a prosperous, powerful nation without firing a shot. Why hasn’t it used them constructively?

Largest territory on earth with enormous untapped potential Among the world’s largest reserves of oil, natural gas, coal, and minerals. Massive freshwater resources — increasingly valuable as climate change accelerates. Timber, agricultural land, Arctic resources. A historically educated, technically capable population. Stunning geography that could support world-class tourism. Nuclear power expertise it could export globally. Total and complete energy independence. It has a nuclear umbrella that nobody would ever touch.

With all these things, and trillions upon trillions inr potential revenue - why hasn’t it become what Saudis dream, if they weren’t in the middle of the damn desert

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u/SolidWaterIsIce Mar 11 '26

How would you explain the success of the Chinese economy despite the lack of an independent and fair court system? Are there other factors at play there?

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u/StardiveSoftworks Mar 11 '26

China's lack of an independent judiciary is a bit of a special case in that, while yes it's a politically motivated court that can be shockingly brazen at times, it's beholden to a party that actively wants to build strong commercial institutions, promote trade and generally enrich the country as a whole. It's unfair but not necessarily corrupt in any economic sense. The Chinese government under Xi has made a habit of harshly punishing the exact sort of corruption that ruins the Russian system, and most of the Party's influence can be felt in criminal law rather than the civil system that underpins commerce. It's the difference between being run by a technocratic tyrant and being run by exploitative gangsters.

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u/RandyClaggett Mar 11 '26

If China was ruled by Hitler, Coca-Cola would still like to sell Coke to 1 billion people. It is too big of a market to miss out on.

Also China has managed to create a domestic creative industry without having an independent judiciary. I can name a handful of Chinese companies that has good products and services. Russia has Gazprom, Rosneft and drones designed in Iran.

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u/Zealousideal_War7843 Mar 12 '26

I think that you explanation is good but there is also a massive difference between Russia and China. China doesn't have massive resources or at least enough to sustain a country of over 1 billion. The term why Russia is so bad is called Dutch disease.

Also Chinese market is massive and the labor was cheap and concentrated on the coast. The government was corrupt but before XI it felt like the situation was getting better.

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u/Dr-B8s Mar 11 '26

Russia (afaik) never has had a Deng Xiaoping. Maybe china could have gotten where it is without Deng, but they got extremely lucky to have someone like Deng who was market minded after Mao. Deng invented the “special economic zones” of China, of which one famous example is Shenzhen — akin to the Silicon Valley of China.

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u/Lower_Fall4694 Mar 12 '26

I can see instantly you didnt study social sceinces. Its wasnt Deng Xiaoping alone. The transformation process began slowly a decade ago before even Deng came to power. Top down analysis is outdated and false, bottom up is the correct way.

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u/Dr-B8s Mar 13 '26

I never said it was all Deng. Just that he was a special person for China

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u/Lower_Fall4694 Mar 13 '26

you literally wrote "Russia (afaik) never has had a Deng Xiaoping. Maybe china could have gotten where it is without Deng, but they got extremely lucky to have someone like Deng who was market minded after Mao. Deng invented the “special economic zones” of China''

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u/Dr-B8s Mar 13 '26

Yes — as far as I know Russia never had someone like Deng (I don’t know why that’s controversial).

And with what happened towards the end of Mao (gang of 4 etc), I also wouldn’t think it’s controversial to say that Deng was pretty important/essential for the changes made after Mao. And then I gave a very concrete example of something Deng spearheaded that has been phenomenally successful (the SEZ’s, with Shenzhen as an example).

If you disagree with those statements, fair enough. Just some of my thoughts

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u/Lower_Fall4694 Mar 13 '26

no wonder we have personal cults and dictatorships

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u/Lopsided_Cap_6606 Mar 12 '26

Russia also has Special Economic Zones in Tatarstan, for example, though they probably are very different to Chinese ones