LONDON: It is 100 years on Wednesday, using Russia’s old calendar, since Vladimir Lenin’s Bolsheviks stormed the Winter Palace in what is now St Petersburg and took power. Not a lot has changed.
Well, not in economic terms, according to research by Renaissance Capital, an investment bank specializing in the region. It says the Russias of 1917 and 2017 have more in common than might be expected.
Take, for example, debt. Just before the Red October revolution, around a third of Russian debt was held by foreigners. Same today.
Pre-1917, foreigners got 5-8 percent dividend yields from Russian utility shares. Same today.
Pre-Soviet Russia lagged the major world powers in industrial might, but was considered on a par with Brazil and Mexico. Pretty much the same as today.
Raw materials were pre-1917 Russia’s mainstay, comprising two-thirds of its exports. It is still two-thirds in 2017, Renaissance, an emerging markets-focused investment bank, says.
Finally, Russia was the world’s biggest exporter of grain back then. The bank calculates that over 2015-17, the countries of old imperial Russia were again the world’s biggest exporter of grain.
This is not to say, of course, that nothing has changed. The Soviet era, for example, brought widespread literacy, although RenCap economist Charlie Robertson notes today’s most successful areas in Russia are where 1917 literacy was the highest.
The Soviet Union also saw industrialization, albeit uncompetitive compared with Britain, the United States and Japan.
Robertson reckons Russia could well have achieved far more but for the revolution and ensuing Soviet years which he says stopped the development of a modern economy.
“Russia was converging with Italy, industrializing as fast as Japan, and overtaking Spain in the first half of the 20th century,” he wrote in a note.
“If that progress could have been maintained, and without … famines and repeated invasion by foreign enemies, we think Russia would be more populous, more wealthy and more democratic than it is today,” he said.
“Without 1917, Russia may have suffered just three (or fewer) such disasters, like China or Germany, and be considerably more prosperous … today.”