There are two absolutely very well-known historical experiments in the world — East Germany and West Germany and North Korea and South Korea. Now these are cases that everyone can see!” So spoke Russian President Vladimir Putin in an address to the Duma in 2012. As a former KGB operative in communist East Germany, Putin knew of what he spoke. Communism was a “historic futility,” he later explained. “Communism and the power of the Soviets did not make Russia a prosperous country.” Its main legacy, he added, was “dooming our country to lagging steadily behind economically advanced countries. It was a blind alley, far away from the mainstream of world civilizations.”
Yet Russia today is lagging steadily behind economically advanced countries — and Russia’s president is doing nothing about it. Putin recently overtook Leonid Brezhnev as Russia’s longest-serving leader since Joseph Stalin. His economic record, coupling stability with stagnation, looks increasingly like Brezhnev’s too.
The past four years have proved that Russia’s economy can withstand brutal shocks, including the collapse in oil prices in 2014 and subsequent Western sanctions on Russian banks and energy firms. But the four years since have also demonstrated that a return to rapid growth is unlikely. In 2017, Russia’s economy grew by 1.4 percent, significantly slower than both the United States and the eurozone. It is expected to underperform in 2018, too, thanks to sanctions and low oil prices but also to a long-standing lack of investment. Russia is far poorer than its Western rivals, so it ought to be growing significantly faster than them. But last year Russia was one of the slowest-growing countries in Central and Eastern Europe, significantly lagging neighbors such as Poland and Romania. And don’t even ask about comparisons with Asia.