A side-note to my earlier post on G7 and G20 memberships: here is a chart showing market power index for top global economies. Note two sets of countries: the G7 and G20 as ranked by the index of their power in global markets:
Three out of current G7 states should not be anywhere near G7. You might argue about Saudi Arabia's place in the world's 'power by exports' rankings, but China and Russia certainly are diversified enough and have a strong enough sway to be in G7.
On a side note: this should settle the argument who can win from a Russia-Ukraine trade war...
I realize this is an old graphic, but the last comment doesn't make a whole lot of sense. Even back in April, this was never some Russia vs Ukraine "trade war", rather Russia vs "most of the developed world", hence the reason for the ruble's collapse.
Also, Russia is on that list for the same reason as Saudi Arabia -- energy exports. 2009 is a bit dated as well.
I suspect if we looked at a current chart, Russia wouldn't be in the top 10. They appear to be losing the so-called 'trade war'.
Yes, data is not exactly fresh. No, the positions have not probably changed that much. Russian exports collapsed in 2009 - see this http://trueeconomics.blogspot.ie/2014/10/24102014-weekly-russian-economy-update.html second chart. Since then, Russian exports were not performing too badly. As per sanctions... well, the impact on exports so far is small. Ukrainian conflict, however, does weigh heavily on exports, albeit compensated by imports fall off of similar size in bilateral trade with Ukraine. As per composition of Russian exports, sure - energy is a big component. But even in energy exports Russia is a bit more diversified than Saudi Arabia.
Final point - I referenced this graph to the post on actual G7 economy-size rankings, so it is clearly an 'illustrative' example, not the basis for rankings.
Thanks for responding to my earlier comment.
The sharp decline in the ruble today brought this blog post back to mind.
I'm sure the whole "Russia wouldn't be in the top 10" thing I posted earlier was a bit of a reach. Now, however, with the further decline in oil price, I suspect that statement is correct. It was still over $80usd back on the 30th of October. At this exact moment it's $45.94usd, about 57.5% the value it was on Oct. 30th. Natural gas has also dropped approx. 25% or so.
At any rate, I did find this:
68%, that is rather substantial (it's something like 53% petroleum, 15% natural gas). Yes, it's not in the same category as Saudi Arabia (~90%), but it doesn't indicate a very diversified economy. US petroleum exports are ~10%.
At any rate, I wouldn't be surprised if the price of oil continues to decrease. At the current price, most shale oil plays are still profitable, if it drops below $35-$40usd, this won't be the case. If that happens, the price will probably reach news highs maybe three years from now ($150-$200?). Good news for Russia then, I guess. The problem is that Russia can't afford to wait for several years, like Saudi Arabia.
I wouldn't be surprised if Russian credit is cut to junk status here within the next few months.
Putin essentially got away with annexing Crimea. Why not stop there?
I can't come up with a reasonable explanation as to why "Russian volunteers" (complete with tanks and heavy ordnance) continue to be present in Ukraine. It's a no win situation for Russia.
Agree with much of what you say. One point, though I do not agree with - Crimea is distinct from the Eastern Ukraine. There is no 'land grab' going in the Donbass - the objectives seem to be entirely distinct from those in Crimea. That said, neither Crimea, nor Donbass actions, in my view, are consistent with strengthening Russia. And it is beside the bigger issue that neither is justifiable.
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