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And yet, even without Russian exports stopped completely, severing technological import from the West will disrupt Russian technological chains. Russian factories use Western industrial machines (Russia produces almost none of its own), details, technologies, IT products
Russian industry widely uses Cisco computer systems. Now Cisco stopped its operations, ceased maintaining equipment and is blocking it. That's an internal document of the Main Radio Frequency Center, managing Russian radio infrastructure. Ofc they use Cisco. Ofc they're alarmedpic.twitter.com/uaVoLGUMqL
Until this moment Russia was reliant on export of natural goods to the West and on technological imports from the West. Nowadays technological import will be very hard, expensive and vulnerable coming through a few bottlenecks such as Georgia which didn't sanction Russia yet
Could there be potential alternatives to the technological dependence from the West? Yes, China. Putin is now absolutely determined to reorient to China and if he stays in power, Russia will become Chinese economic colony with Chinese companies buying all assets at dump pricespic.twitter.com/zA7EBNY8kO
Russian economic history could look somewhat ironic: 1. Stalin's slaves built industry at the cost of millions of lives 2. Yeltsin transformed these plants to Ltd's 3. Putin destroyed their value in a war 3. Chinese bought these slave-built assets for nothing Trust the plan
But there are several problems with this plan. Firstly, Russian-Chinese partnership is veeeery unequal. China can have any trade partner, Russia has only China. Ofc Chinese will skyrocket the price of their exports to Russia (done) and buy Russian resources for nothing (done)pic.twitter.com/Rbz1mlWXUV
That's the price of gas Russia had be selling to China via the Power of Siberia pipeline *before* it quarrelled with the West. Russia was selling its gas to Chinese at huge loss even when Russian negotiating power was strong. Now it's much weaker and Russian gas gonna be cheaperpic.twitter.com/lilftYBuE4
Secondly. Russian government institutions never really reached a consensus regarding relations with China. Security Council was promoting economic cooperation with Chinese for geopolitical reasons. Meanwhile Federal Security Service was sabotaging it viewing it as a security risk
Of course now Russia is consumed by existential struggle with the West. Now it will accelerate integration with China by all means possible. But it seems that Federal Security Service had no idea of Putin's decisions to launch a conflict in advance
It seems that the state security didn't know or believe there will be such a huge, abrupt escalation of conflict. They probably designed their policy on assumption that the conflict with the West will be gradual, take many years and there will be no sudden moves from any side
In this context it is understandable why they sabotaged economic integration with China. China is the only neighbour of Russia which is objectively stronger. Very much stronger and its power growing. So these guys tried to minimise technological import (=dependency) from China
But their assumptions were wrong. Putin did escalate, did it abruptly, most probably without consulting anyone or notifying them. Hypothetically, if he informed them of his decision 2-3 years in advance, they would've stopped sabotaging integration with China
Russia will integrate with China at any cost. But this is a task that should've been done before the war. The war is a systemic shock itself. Sanctions and severing technological from the West make it even harder. Russia might not have time to complete this work before collapse
This is very much exacerbated by logistical problems. Russian industrial heartland in Europe and Urals is connected with China by the Transsiberian railway. Which is itself a huge bottleneck and this point of failure. One single accident and the traffic is disruptedpic.twitter.com/1OrykL7Fo3
Consider the accident in 2021. Flood damaged the bridge and Transsiberan railway stuck. In 5 days they built new bridge, but by that time 500 trains were waiting. Traffic schedule was disrupted for very long. This is a super vulnerable bottleneck connecting Russia with Chinapic.twitter.com/pgrU0TE865
Finally there's factor that will increase the systemic shock on Russia economy. It will prevent import substitution, hurt exports, hamper integration with China and obstruct domestic production. I'm talking of brain drain. Here you see Russians quieting to Turkish airlines officepic.twitter.com/I58LexxRuq
All somewhat smart people in the country understand how terrifying the perspectives are. People are leaving en masse wherever they can. The most popular destination of emigration is Tbilisi, all the flights are booked. So people fly to Yerevan, Baku instead, just to get outpic.twitter.com/oKtOoFinOe
First all flights to Georgia were sold out. Then to Armenia and Azerbaijan. But ppl still wanted to leave so they started leaving to the only destination nearby - where you could still get tickets to, to Central Asia, primarily Uzbekistan. Fergana, Tashkent, Samarkand are flooded
Who is leaving? Well, one obvious answer is - dissidents and whoever disagrees with what's happening. That's not wrong. But another answer is: whoever has marketable skills that make them employable on the international market. Tech, IT, engineering, hard sciences
Anecdotally my friend just flew from Moscow to Fergana with "half of Fiztech and half of Scholtech" who were leaving to Uzbekistan. Fiztech (МФТИ) is the top, most rigorous Russian university for the hard sciences. They look down upon Moscow Uni grads, considering them as fraudspic.twitter.com/Dys5Zb44QD
Skoltech was Medvedev's project. They tried to create a new innovative cluster and built a new university + SEZ for that task. What they certainly succeeded in, was in keeping many bright STEM folk in Russia. But now they're leaving to Uzbekistan asap, before the door closespic.twitter.com/mk4UPaFWGk
Of course the door will close soon. Putin already started using "carrot" giving many new privileges to IT specialists and companies, most importantly, freeing the IT workers from the military draft. What does it mean? It means soon he'll use stick to stop the brain drainpic.twitter.com/VlZtnj6akI
State owned companies use the stick directly and prohibit their workers to leave the country. Consider this executive order by Rogozin, the CEO of a state owned Roskosmos aerospace company. He prohibited his employees to go abroad, correctly understanding they might not returnpic.twitter.com/Q2TSxDw9wX
It seems border guards are instructed not to allow the IT specialists out. I made screenshots from Russian chats on how to leave the country. There's only one rule: tell you're not from IT. Swear you are humanities grad, they'll let you out of Russia. Don't confess you're a coderpic.twitter.com/DN9Zh1TyKs
Let's sum up. Russia is so deeply integrated to the Western market that re-directing to China is a long arduous task which requires long preparation. And this work hadn't been done before the war, largely because security officials had no idea it will happen
West severing technological exports to Russia will hurt Russian technological chains on all levels. Import of machines stopped, import of details stopped, maintenance stopped, existing digital and hardware infrastructure blocked. That is a devastating systemic shock
Theoretically Russia could just switch to China. But even ignoring that China is not that self-reliant itself (it's also a micro chips importer), it's not that easy. Chinese are not gonna altruistically help, they'll rip Russians off, using their leverage to its fullest
Russian industrial powerhouses in Europe and Urals are connected with China ин the highly vulnerable Transsiberian railway. One accident on this bottleneck will greatly hurt both imports and exports
Finally, brain drainwill hamper any complex production or technological process in Russia. Even apolitical or loyalist people understand that Russian economic future will be catastrophic. So if they feel they have marketable skills, they leave. Russia loses its tech folk quickly
One great idea would be to promote this brain drain, scale it up. If Western countries can take some of these people, give more work permits, that's great. If they can't a great idea would be creating employment where they already stay - in Transcaucasia and Central Asia
Transcaucasian and especially Central Asian economies are deeply integrated with Russia. Thus Russian economic collapse will entail the socio economic collapse of Central Asia as a second order effect. These countries live off money transfers from Russia and will crumble withoutpic.twitter.com/xtNOdI5A27
Creating employment in Central Asia can solve both of these problems. First, prospect of at least some wages abroad will lure many more people out of Russia. Lots of them hesitate to leave because they don't know what to do next. And when they make their mind, the door will close
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