I disagree, there was a lot of economic restructuring happening during that time. The groundwork for Russian decoupling was laid after the 2008 financial crisis. That was the moment Russians realized dollar-based reserves could be vulnerable. They quietly started a pivot with the central bank going on a gold-buying spree, boosting reserves from around 450 tonnes to around 1,900 tonnes by early 2018. They also began aggressively cutting their exposure to US dollars with the dollar share of reserves dropping from over 40% to just 16% by 2021. If that wasn’t done, then Russian economy would’ve been far more exposed to the types of sanctions the west put on in 2022.
On the domestic side, Russia kickstarted an import substitution push for defense and food security. The thinking was that if Ukraine or the west cut off critical components, they didn’t want their military industries to grind to a halt. After 2014, that effort went into overdrive and expanded into agriculture, pharma, and industrial tech. And it worked better than most expected because Russia is now entirely food self sufficient and largely independent in defense production.
Russia continued stockpiling gold, cutting dollar exposure, and starting import substitution. And a real stress test came after 2014, when the first wave of western sanctions hit following Crimea.
Russia used that period to double down on systemic derisking. The central bank kept hoarding gold like there was no tomorrow with the reserves rising to over 2,300 tonnes by early 2022. At the same time, they basically nuked their dollar holdings with gold and yuan filling the gap.
On the financial infrastructure side, they also got serious about building alternatives to SWIFT and Visa/Mastercard. The SPFS messaging system and Mir payment cards were designed to keep the economy alive if Russia got cut off from global rails. And that’s exactly what happened in 2022.
Import substitution went from a defensive tactic to a full-blown state doctrine as well. Agriculture became a legit success story where Russia went from importing chicken and pork to becoming one of the world’s largest wheat exporters. Defense production became almost entirely sovereign. Even in tech, they started pushing local software and chip design, although manufacturing remains a weak spot right now.
Russia used that whole period to systematically rewire their economy for a worst case scenario, it was a decade of methodical preparation that allowed Russia to build a system to could absorb blows that would have crippled most economies. And as a result it didn’t turn out to be the soft target the West assumed.
I disagree, there was a lot of economic restructuring happening during that time. The groundwork for Russian decoupling was laid after the 2008 financial crisis. That was the moment Russians realized dollar-based reserves could be vulnerable. They quietly started a pivot with the central bank going on a gold-buying spree, boosting reserves from around 450 tonnes to around 1,900 tonnes by early 2018. They also began aggressively cutting their exposure to US dollars with the dollar share of reserves dropping from over 40% to just 16% by 2021. If that wasn’t done, then Russian economy would’ve been far more exposed to the types of sanctions the west put on in 2022.
On the domestic side, Russia kickstarted an import substitution push for defense and food security. The thinking was that if Ukraine or the west cut off critical components, they didn’t want their military industries to grind to a halt. After 2014, that effort went into overdrive and expanded into agriculture, pharma, and industrial tech. And it worked better than most expected because Russia is now entirely food self sufficient and largely independent in defense production.
Russia continued stockpiling gold, cutting dollar exposure, and starting import substitution. And a real stress test came after 2014, when the first wave of western sanctions hit following Crimea.
Russia used that period to double down on systemic derisking. The central bank kept hoarding gold like there was no tomorrow with the reserves rising to over 2,300 tonnes by early 2022. At the same time, they basically nuked their dollar holdings with gold and yuan filling the gap.
On the financial infrastructure side, they also got serious about building alternatives to SWIFT and Visa/Mastercard. The SPFS messaging system and Mir payment cards were designed to keep the economy alive if Russia got cut off from global rails. And that’s exactly what happened in 2022.
Import substitution went from a defensive tactic to a full-blown state doctrine as well. Agriculture became a legit success story where Russia went from importing chicken and pork to becoming one of the world’s largest wheat exporters. Defense production became almost entirely sovereign. Even in tech, they started pushing local software and chip design, although manufacturing remains a weak spot right now.
Russia used that whole period to systematically rewire their economy for a worst case scenario, it was a decade of methodical preparation that allowed Russia to build a system to could absorb blows that would have crippled most economies. And as a result it didn’t turn out to be the soft target the West assumed.