The Big Hack Is Damaging. That Doesn’t Make Russia 10 Feet Tall.
U.S. leaders must not overestimate a country with a weak economy and overrated military.
There’s little dispute that the recent wide-scale cyberattack is a damaging, not to mention embarrassing, setback for U.S. cyberdefenses. A senior intelligence official said that it could take months or even years to fully understand the damage done by the Russia-linked hackers who breached networks at over 40 private companies, think tanks, and the departments of State, Defense, Homeland Security, and even the National Nuclear Security Administration. But the last thing the United States should be doing as its seeks to plug holes and harden its overall defenses is inflating Russia’s overall power or giving Vladimir Putin more credit than he deserves.
The U.S. foreign-policy establishment may choose to believe otherwise, but the reality is that Russia is not some geopolitical giant that is close to establishing a bigger and better Soviet Union. Instead, it’s a declining power with huge internal weaknesses and vulnerabilities. Putin may put up a public front as a no-nonsense, master grand strategist with an impeccable background in intelligence and subversion. But back on Planet Earth, he is a manager of a country with an anemic economy, an overrated military, and sub-par socioeconomic metrics.
Let’s start with Russia’s economic outlook, which can at best be categorized as a mess. The World Bank clocks Russia’s GDP at $1.7 trillion, a figure that seems impressive at first blush. But taken in context, the number is actually quite underwhelming. Russia’s current GDP has barely improved since 2010, when crude oil prices were relatively high and Moscow was not yet hobbled by U.S. and European sanctions imposed in the wake of its 2014 annexation of Crimea. Russia’s economy is roughly the same size as Canada’s, a country with one-quarter as many people. The macroeconomics are quite clear, and they aren’t trending in Moscow’s direction.
Zoom in a little more, and Russia’s economic situation appears even bleaker. Because crude oil sales account for about two-thirds of export revenue, Russia’s economic health is only as good as the value of oil on any given day. When a barrel of crude costs $80 to $90, Russia’s finances reap steady profits. But when the price declines to today's $50 to $55, Russian officials are forced to introduce austerity in their budgets lest they dip into the foreign exchange reserves they would prefer to save for emergencies. Some of that austerity, predictably, spreads to the Russian defense budget, which it is already below its 2016 peak. This is where Russia finds itself today: in October, the Russian Finance Ministry proposed slashing Russia’s military personnel by 10 percent, although the Defense Ministry strongly opposes it. Due in large measure to the coronavirus pandemic, the Finance Ministry is also lobbying for an overall 5 percent cut in Russia’s defense spending between 2021 and 2023.
Nor are ordinary Russians in an especially prosperous period. The Russian population’s living standards only recently climbed out of a hole: incomes grew by 0.8 percent in 2019 after five straight years of decline. In fact, the multiple years of lower incomes were of such embarrassment to the Kremlin that the Federal Statistics Service stopped publishing monthly updates. With the Russian economy contracting by 4.1 percent in 2020, Russian families across the country will very likely see their own incomes drop yet again—adding to the 20 million Russians who are currently under the poverty line.
Then there is Russia’s health care system, which suffers from dilapidated hospitals, shortages of basic medicines and equipment and overworked staff. If you happen to be a Russian living in the countryside, you may have to drive hours upon hours to seek medical care. Through the first 15 years of Putin’s reign, half of Russia’s hospitals have shut their doors. Only 37 percent of Russians surveyed by Gallup were satisfied with the availability of healthcare—and that poll was taken before the pandemic. One can only guess how far that number will fall.
What do all of these statistics have to do with the Russian-designated hack of U.S. government systems? Directly, not much.
But in analyzing the supposed national security threat Russia poses to the United States or its allies in Europe, we would be ill-served to take the latest cyberoperation in isolation. It is crucial to start from an accurate baseline. Failing to do so will produce bad foreign policy, which will lead to more mistakes and problems down the road.
This isn’t to suggest the U.S. has the luxury of ignoring Moscow completely. Russia, after all, is the world’s foremost nuclear weapons power. It also continues to develop military technology that seeks to evade U.S. defenses. Yet when looking at the full picture, one comes to a conclusion: Russia is not 10 feet tall. .
Daniel R. DePetris is a fellow at Defense Priorities and a columnist at Newsweek.
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