The Duck of Minerva

Will the markets tame Russia?

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by Josh Busby

3 March 2014, 1027 EST

I don’t have an answer for this, as I’m not sure how globally integrated Russia is in to the world economy at this juncture or vulnerable given its fossil fuel resources, but I, along with anyone who knows how to buy shares see that the Russian stockmarket declined this morning as has the value of the ruble.

I know Russia experienced significant economic crises in the 1990s after the breakup of the Soviet Union that made it dependent on IMF support, but my sense is that the resurgence of the country’s petro economy bolstered its international economic position. That said, I wonder if the markets can tame Putin in a way that politicians can’t. My bet is that if Putin is willing to tolerate high costs, then no, but I’d welcome our readers with more regional knowledge to weigh in. 

The website Quartz recorded the sell-off:

The two main Moscow stock markets, the Micex and the RTS, have fallen by more than 10% at the time of writing, in a broad-based selloff. Big Russian companies like Gazprom and Sberbank saw their share prices plunge as traders dumped their shares.

Here’s another tweet from a BBC journalist that put it in perspective.

We know that interdependence prior to WWI did not deter a war then. Maybe Norman Angell wasn’t right then, but maybe he will be now.

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Joshua Busby is a Professor in the LBJ School of Public Affairs at the University of Texas-Austin. From 2021-2023, he served as a Senior Advisor for Climate at the U.S. Department of Defense. His most recent book is States and Nature: The Effects of Climate Change on Security (Cambridge, 2023). He is also the author of Moral Movements and Foreign Policy (Cambridge, 2010) and the co-author, with Ethan Kapstein, of AIDS Drugs for All: Social Movements and Market Transformations (Cambridge, 2013). His main research interests include transnational advocacy and social movements, international security and climate change, global public health and HIV/ AIDS, energy and environmental policy, and U.S. foreign policy.

Website |  + posts

Joshua Busby is a Professor in the LBJ School of Public Affairs at the University of Texas-Austin. From 2021-2023, he served as a Senior Advisor for Climate at the U.S. Department of Defense. His most recent book is States and Nature: The Effects of Climate Change on Security (Cambridge, 2023). He is also the author of Moral Movements and Foreign Policy (Cambridge, 2010) and the co-author, with Ethan Kapstein, of AIDS Drugs for All: Social Movements and Market Transformations (Cambridge, 2013). His main research interests include transnational advocacy and social movements, international security and climate change, global public health and HIV/ AIDS, energy and environmental policy, and U.S. foreign policy.

2 Comments

  1. kerokan
    kerokan on 3 March 2014 at 14.56 EST

    Suppose this is a temporary shock, then does it really hurt the Russian economy? Let me try to be clearer: markets fell 10% this week, suppose by next week the situation stabilizes and markets rise 11% when everybody realizes that we will not fight WW3. Then the market is back to where it began. Does that kind of a big one-time fluctuation have a big impact on the economy?

  2. caesar
    caesar on 6 March 2014 at 13.23 EST

    We may see Putin take this to the next level. An invasion of the Ukraine for irredentist reasons may be quite popular amongst the Russian public. Also increasing the intensity of the war may kick start their economy, at least temporarily