Professor Jacques Sapir addressed our Mackinder Forum Seminar series on Saturday, June 10, 2023, at 11:30 a.m. to 1:00 p.m. Eastern U.S. Time. His talk: “Could Decision-Makers have been Misled by an Uninformed Geostrategic Perception of both Russia and China?”
Abstract: The geostrategic perception of Russia and China has long been biased by an uninformed use of statistics. Comparisons of GDP in US dollars have tended to greatly understate the economic weight of Russia and China. The use of Purchasing Power Parity, a concept that was nevertheless imposed more than 50 years ago, allows a much more exact comparison. The use of GDP in Purchasing Power Parity shows that China has overtaken the United States since 2018, and that Russia has an economy comparable to that of Germany.
Moreover, the origin of GDP is also important. Industry provides only 16% of GDP for the United States compared to around 26% for Russia (2011-2016) and 35% for China. In addition, the number of patents filed, or the share in the world trade in raw materials must also be taken into account. An analysis of the structure of the Russian economy would have shown that it was much more resilient than the weight of its GDP calculated in dollars would suggest. This explains both the ineffectiveness of the sanctions and Russia’s ability to wage a war of attrition against Ukraine and deplete the military industries of NATO countries.
Identifying economic strengths and weaknesses in the context of war or near-war is a fundamental task. The illusion created using GDP in US dollars has undoubtedly influenced the perception of the real danger represented by Russia and China on the eve of the crisis in Ukraine. This same illusion led to an overestimation of NATO’s power and led to very questionable strategic choices.
Biography: Jacques Sapir, born in 1954, is professor of economics at EHESS Paris. He also teaches at the School of Economic Warfare in Paris and at the Moscow School of Economics in Moscow. He worked as a consultant and adviser for the Ministry of Defense in France from 1988 to 2003 and created the Franco-Russian Seminar on Economic Development in 1991, a seminar still in operation today. He also was the chief economist of the TACIS assistance and the advising task-force in Ukraine in 1999-2002.
He has written numerous books on the Soviet economy and then on the Russian economy, as well as numerous scientific articles in French, American, German, British, Japanese, and Russian journals. He received the Castex Prize from the Ministry of Defense in 1988 and the Turgot Prize for Financial Economics in 2002. He has been a foreign member of the Russian Academy of Sciences since 2016.
Jacques Sapir, “Assessing Economies Geostrategically,” American Affairs VI, 4 (Winter 2022), pp. 81-86.