In addition to the horrific images of butchery broadcast from Bucha, Irpin, Borodyanka, and other suburbs northwest of Kyiv, perhaps one of the most shocking residuals of last month’s occupation of the northern parts of Kyiv and Chernihiv oblasts, is the widespread looting that Russian soldiers engaged in there.
Apparently, when the Russians saw the standard of living of suburban Ukrainians, many of whom in rural areas, they were overcome with envy. And they didn’t even get to Kyiv! What does that say about the real state of Russia’s economy?
The retreating Russians took everything.
Their transport trucks were packed with refrigerators, television sets, ovens, clothing, shoes –everything that could be looted from the homes they had occupied and from those of neighbors they had pilfered. One photo of a Russian truck disabled by the advancing Ukrainian forces showed two wheels from passenger cars strapped on to the front grill together with a shovel, hoe and rake. Apparently gardening instruments are in short supply in Russia.
It would seem that incidents of looting by the retreating Russians were not isolated.
Intercepted telephone conversations between Russian soldiers and their wives and girlfriends back home reveal the women encouraging their men to bring back as much plunder as possible: the request for a perfume sample box and jewelry (“especially gold crosses and diamond earrings”) particularly sticks in mind.
A recent social media post from Kharkiv provides a radical contrast to the Russians’ barbarism.
Apparently, most of the windows in the shops on Sumska Street (the main artery of the now destroyed eastern Ukrainian city) were blown out in early March, but the goods inside were untouched. Even food stores remained intact, despite the obvious need. Kharkiv’s Ukrainian residents refused to steal.
Similar remarkable respect for private property among Ukrainians was observed in Kyiv during the Maidan protests of 2013-2014: despite 90 days of mass demonstrations, not a single store window was smashed in the center of Ukraine’s capital. Not a single shop was looted.
Dissimilarity with the Russians could not be more striking: in the villages north of Kyiv, they swarmed in like locusts, pilfering everything they could get their hands on. Reports on social media have shown Russian soldiers sending the most bizarre stolen goods home after their withdrawal to Belarus: toasters, drill sets, slippers, used underwear…
A logical question is raised after observing such behavior: how can these be the actions of military personnel of a country that, according to World Bank statistics, is three times richer than Ukraine?
I was always taught economics is a “hard” science. Apparently, economists believe their statistical analyses can be used not only to explain, but to predict human behavior. In the Russian and Ukrainian cases, something seems to have gone terribly wrong. Let’s examine some statistics:
According to the World Bank, in 2020, nominal gross domestic product (GDP) per capita in Ukraine amounted to $3,727. In Russia, in the same year, the globally accepted indicator of total wealth per person totaled $10,126. Hence, the Russian economy was said to produce almost three times more wealth per person than its Ukrainian counterpart.
Compared to Europe, Russians were said to be worse off than Poles (GDP per capita in Poland in 2020: $15 656), but comparable to Bulgarians (GDP per capita in Bulgaria in 2020: $9975). In 2020 Lithuania’s GDP per capita was twice that of Russia, totaling $19 997.
With GDP per capita statistics at almost one-third those of Bulgaria and Russia, more than five times smaller than Lithuania’s and four times smaller than Poland’s, Ukraine has repeatedly been called the “poorest country in Europe”. Incidentally, according to the World Bank, Belarus is said to be twice as well off as Ukraine with nominal GDP per capita at $6,411 (difficult to believe).
As shown in the graph below, even when we compare GDP per capita at purchasing power parity (PPP) – a method of smoothing differences in currency values compared to the U.S. dollar, the total for Russia in 2020 is $29,812 and it’s over twice that of Ukraine: $13,054.
So why are the Russians looting Ukraine? Why would the soldiers of an invading country that is supposedly twice or three times as rich as the target of its invasion, need to steal household goods from villagers?
The simple answer is inequality. Apparently, the Russian military units that invaded Kyiv oblast were drawn from the poorest regions of Russia. There, wealth is concentrated in the two biggest cities of Moscow and St. Petersburg, and even there – in the hands of a select few.
Nevertheless, if the statistics are to be believed, even the poorest of Russians should still be richer than Ukraine’s rural population! Russia has an extremely high Gini coefficient – the measure of economic inequality that unfortunately is highly inaccurate, but nevertheless used widely.
However, with an economy the size officially reported by Russia, their poor soldiers should be at least as well off as the villagers of Ukraine’s northern regions where lifestyles are significantly more modest than in urban areas.
According to some local villagers, the invading soldiers had never seen an indoor toilet. They were surprised that roads in Ukraine’s villages are paved. Indeed, apparently the Russians were so shocked by what they saw as opulent living standards of Ukrainians that they left graffiti asking: “Who gave you permission to live well?”
Famously, Winston Churchill defined Russia as “a riddle, wrapped in a mystery, inside an enigma.”
It would seem the enigma has been unraveled in Ukraine: Russian economic statistics are a lie. Russia is bankrupt. Unfortunately, its population – particularly its soldiers – don’t know it yet. Evidently, they are being awakened to this fact in Ukraine.
The late U.S. Senator John McCain seemed to have got it right when he called Russia “a gas station masquerading as a country” and then called the WSJ article on “Putin’s Potemkin economy” a must-read.
It would seem Putin’s Potemkin-style lie extends not only to his economy. His army has shown itself to be highly overrated. The much-vaulted Black Sea Fleet has just lost its flagship (to an opponent that has no navy of which to speak). The Russian air force seems capable of assaulting unarmed civilian targets, but not much else.
Could it be that Russia’s nuclear threat is also hollow?