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Russian Economist, Constantin Gurdgiev discusses the Russian Ukraine conflict on today’s 1% Podcast.
Constantin was ranked 39th of the 100 most influential living economists by IEB (the Institute of Stock Market Studies) in 2020. He is an expert in the areas of finance, macroeconomics and risk and provides in-depth analysis and insights to private industry via his consultancy and advisory practice. He is also a Professor of Finance for both Trinity College Dublin and the University of Northern Colorado.
In this fascinating conversation Constantin delves into the mindset of the Russian people, the inner workings of the Kremlin, Putin’s potential objectives and how this conflict could possibly play out.
Summary
(03:06) Constantin’s childhood years being brought up in Moscow
Born in 1968
It was very different to modern day Russia as it was in the Soviet Union
His friends were all different nationalities
Ukrainians are like his brothers and sisters
Constantin grew up travelling abroad and saw what existed outside of the Soviet Union
He always wanted to study international affairs
(09:22) How it feels to be Russian
It feels shocking that there are Russian troops in Ukraine
There is a sense of academic self-doubt for Constantin on not noticing the warning signs that led up to the war
One of the big issues is considering how to go from this level of violence to normality
Usually, after a few weeks into a major event, you are able to process what is happening ‘ but this doesn’t seem to be the case with the Russian invasion of Ukraine so far
(16:09) Constantin’s approach to making decisions
Collect the data without having a pre-conclusion
Focus on forming the hypothesis to then test out
It’s virtually impossible to estimate what stage in the war Russia is with Ukraine as is too early to collect enough information
(24:31) The impact of imposing sanctions on Russia
Russia is historically comfortable with sudden changes, e.g. a sharp decline in quality of living, so long as it is justified by a national objective
Putin’s approval ratings have gone up
The disapproval of the war is not necessarily the disapproval of Putin for some Russians
(38:32) The impact of consumerism on the traditional Russian mindset of supporting the State
There has been some erosion on this more traditional mindset amongst the younger, more urban and educated classes
Some Russians associate prosperity of the country from Putin’s impact
(44:42) Do we know what Putin’s objectives are with the war?
We don’t know for sure, so it all comes down to probability and finding the most rational explanation first
The higher objective for Putin is having a legacy
‘You don’t invade a country if you want to build a relationship of equals’
(52:45) Is there a point of no return for Putin?
It’s highly doubtful that Putin has an exit strategy that’s mutually beneficial between Russian and Ukraine
We need signals from the West that are supporting the exit
(57:31) If the war ended, how quickly can things bounce back economically, politically and socially?
The repair of the relationship will take a very long time
Commodity markets will restore out of necessity
There were sanctions in 2014 that never had a clear exit strategy, so it wasn’t clear what Moscow needed to comply with in order to end the sanctions
It’s not clear how long the EU will give enough support and resources to Ukraine
The integration of Ukraine in the EU will be hugely beneficial to the EU
(01:10:48) What’s at stake with the 2024 US elections
It’s the process that’s at stake ‘ the whole democratic process is dysfunctional
The American institution has proven to be quite resilient
There are many parallels between Fox News and Russian state media
(01:17:07) Finding the right information online
We live in a society that consumes information at a speed that we can’t process ourselves physically
News today arrives fragmented
Information is costly, e.g. accessed through subscription models, and the average American will prefer free information
History classes in schools are non-polemic and don’t offer discussion
(01:25:54) How Ireland is doing after the 2008 crisis
The crisis was so deep and broad across the economy, Ireland deserves recognition for handling the process
The spread of growth through entrepreneurship is impressive
There have been some systemic problems since, such as housing, which is a failure of policy
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The 1% Podcast brings together the 3Ps of People, Professions and Performance. We chat to top-class performers from eclectic areas (sport, business, politics, art etc.) to extract the tactics, tools and routines you can use to get 1% better and achieve success.