Alexander Mercouris
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
This article was first published by RussiaFeed
An aspect of the events surrounding the dissolution of the USSR in 1991 which rarely gets discussed is that Russia took on itself the entire burden of paying the whole of the foreign debt owed by the USSR at the time of its collapse.
By contrast the other fourteen Soviet republics – now all of them independent states – were not required to pay any of this debt when the USSR collapsed.
The result was that from the moment it came into existence Russia found itself liable for the entire burden of the USSR’s debt – estimated to be around $70 billion – with just a few billion dollars held in the Russian Central Bank’s gold and foreign currency reserves to cover it.
By contrast the other republics of the USSR when they became independent found themselves entirely debt free.
Needless to say any comparison of the relative economic performance of Russia and of the other former Soviet republics since 1991 ought to take this fact into account. Needless to say it never is.
In the event Russia has successfully discharged the whole of this huge Soviet debt burden it took on itself, steadily paying off all the USSR’s debt ever since Vladimir Putin became Russia’s President in 2000.
The final payment of $152 million to Bosnia has just been made, clearing the debt completely.
Following this payment the only bilateral debt Russia stills owes to another sovereign state is $594 million, which Russia itself borrowed from South Korea, and which it it due to repay in 2025.
The payment to Bosnia shows something else: Russia’s determination to discharge all its financial obligations even when it has an excuse not to do so.
At the time the USSR incurred the debt of $152 million which has just been paid to Bosnia, Bosnia as an independent country did not exist. The USSR did not in fact owe this money to Bosnia but to the Socialist Federation of Yugoslavia, of which Bosnia was a constituent republic. Yugoslavia however no longer exists, just as the USSR itself no longer exists.
Another country in Russia’s position might have chosen to treat Yugoslavia’s disappearance as a reason for claiming that the debt which was owed by the USSR to Yugoslavia had also been wiped out.
Instead the Russians chose to negotiate repayment of the debt the USSR owed to Yugoslavia by agreeing to subdivide Russia’s liability for the debt proportionately between the various Yugoslav republics and to make payments of the debt to them proportionately on that basis.
The two final payments were a payment of $60 million to Macedonia made in February, and the payment of $152 million which has just been made – on 8th August 2017 – to Bosnia.
The collapse in oil prices in 2014 and the sanctions imposed on Russia that year were supposed to precipitate a payments’ crisis in Russia, with claims often made at the time that the country would be pushed into crisis and default.
Instead Russia has effortlessly paid off all its Soviet era debt, has Central Bank foreign currency reserves that now amount to $420 billion, is currently running a surplus on its consolidated budget, and has a public debt to GDP ratio of less than 15%, the lowest of any G20 state.
Moreover it seems that most of the foreign debt owed by Russia’s companies to Western banks will also be paid off by the end of this year.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
What would Ukraine or US have done?
The same as any mendacious scoundrel would have done…
You mean like israel, 😉
Defaulted, or, in the case of the USA, just refuse to pay. “After all, we are the exceptional nation, your rules don’t apply to us”.
Nice quote, which made me laugh. So true.
That is seriously interesting. Funny, how the Soviet Union nations, that emerged in 1991, the ones that embraced their independence, work happily with Russia. The ones that ran with their begging bowls, boulders on their shoulders, blaming Russian for everything, ran to the EU, which was run on the same ideology as the EU. Ukraine, who got paid $millions for giving up the ICBMs, that actually belonged to the Sovietr Union and not the nation of Ukraine, are still whinging, whining , moaning and playing the Professional Victimes, worthy of an Oscar, when they actually meant something. Russia paid the… Read more »
All of which apply to the UK today and the US for decades.
It is 10th or 12th time when Russia pays the very absolutely ultimate last soviet debt, as long as I remember.
I am sure the Khazar Jews of Russia now residing in Israel and living in Palestinian houses etc will soon claim compensation for the distress they had when the Jew dominated NKVD and Cheka were ‘forced’ to murder tens of millions of Russian Christians. The Holodomor being just one example.
An NKVD ‘kill room’ is an exhibit in Riga,Latvia. Jews are still not very popular there .
Every Western country, for some reason all of them, is awash in debt and can’t pay it off. Why is that? Why can Russia; with what some would have called at the time, insurmountable problems; be able to pay off all its debts, even those it could legally have discharged of itself because it wasn’t legally liable; whist the West is facing bankruptcy? What is going on? Actually, we all know what is going on, I just had to posit it. It is a debt trap; put in place on the citizens of those trapped countries by their Rothschild rulers… Read more »
Eminently sensible advice. There will be much wringing of hands and beating of breasts when the World Economy collapses.
Not to mention the usual western deflection when one of its charter members reaches pitchover: “Nobody could have foreseen this. And this is no time for pointing fingers. We all have to work together to solve the problem”. It is worth mentioning, however, that the west will not quietly go under owing to being overcome by debt. It will either invent an excuse to wipe out its debts and start afresh, or – more likely – invent an excuse for a major war in the hope that acquiring fresh conquests will allow it to continue the exploitative policies which initially… Read more »
Indeed, Debt is Slavery. Even those of us who have no debt are forced to pay for Government Debt that is far larger than it need be due to all the useless and wasteful wars our corrupt leaders rush to take part in with the US.
The British military operations in Afghanistan this century cost the taxpayer circa 34 billion pounds and we achieved bugger all except over 400 dead soldiers and thousands wounded and crippled.
Wouldn’t it be good to live in a country that is economically free from the usurpers, the scum bags who have, since the creation of credit, kept the West in darkness?
The only way we are to be free is to nationalize the entire banking system, put control of creation of credit back in the hands of the citizens, and, instantly, we are all out of debt!
hmm no Rothchilds running Russian banking anymore and viola! Russia is nearly debt free.. well, aside from $594 million, which Russia itself borrowed from South Korea, and which it it due to repay in 2025. Further, Russia could actually become debt free, if they so chose to.. And they should, imho. Russia’s Central Bank foreign currency reserves that now amount to $420 billion, the Russians wouldn’t even miss the $594 million!
NO ROTHCHILDS BANKERS = Russia’s debt almost paid off.. ANYONE SEE THE CONNECTION YET??
Russia is in real trouble now.
International Bankster S..m, and their drunken in debt puppet:- Churchill.
UK, WW1:- The national debt increased from £650m in 1914 to £7.4 billion in 1919.
By the end of World War II Britain had amassed a debt of £21 billion, which we only paid back in 2006, very few people were aware of this financial debt.
The debt to white European Christians and their countries, due to the loss of all of those men is coming home to roost at present.
War is Murder.