Streetwise Professor

January 1, 2015

Will Bomb For Food

Filed under: Economics,Military,Politics,Russia — The Professor @ 2:11 pm

Russia is leasing 12 SU-24 swing wing Fencer fighter-bomber aircraft to Argentina. Argentina is paying with . . . food, specifically beef and wheat. The 1970s-era SU-24 was, um, very similar to the US’s 1960s-era F-111, which the US retired in 1996. (Seriously: look at pictures of the Soviet SU-24 and the American F-111 and it’s hard to tell the difference.)

The UK is unsettled by the transaction, because the jets could threaten the Falklands. And of course Argentina is in such great shape that it can easily afford a few wars of choice. After all, the last one went so, so well.

But look at it this way. If Argentina prevails this time over an emaciated British military, it will conquer islands with 500,000 sheep. Just think of how many weapons the Argentines will be able to lease from Russia in exchange for all that lamb, hogged, mutton and wool. Chile, look out!

I have another suggested trade between the two countries. They should just exchange their currencies. That way, each can obtain more varied wallpaper.

So no, Russia is not isolated. It is a fully paid member of the Drowning Men’s Club, whose desperate members grab onto one another for dear life as they go under once, twice, and yet again. Look at its economic and political allies, such as they are. Argentina, Venezuela, Cuba, North Korea, Syria. Decrepit losers, every one. Hell, even Belarus is looking for ways to escape the embrace of a drowning Russia.

This deal is so revealing. Russia, once the world’s breadbasket, can’t feed itself. But what does it have to trade? Decrepit military equipment from another era, and a derivative design largely lifted from the evil Americans at that. When “Will Bomb For Food” is only a slightly exaggerated characterization of a country’s comparative advantage, it says everything you need to know about Russia’s economy 23 years after the end of the Soviet Union and 15 years after the advent of Putinism.

 

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16 Comments »

  1. The UK is unsettled by the transaction, because the jets could threaten the Falklands.

    I expect the UK – meaning, politicians – are objecting for the sake of it. I can’t believe there are any viable targets on the Falklands which these jets could attack, the place isn’t exactly known for its infrastructure and industrial centres. I expect the modern UK military could shoot these out of the sky before they’d gotten with sighting the Falklands, if they chose to deploy air defences down there.

    Comment by Tim Newman — January 2, 2015 @ 6:30 am

  2. You forgot to mention the looser allies india and china (turkey?). 🙂
    Also the deal was made before the importstop in august. Since argentina does not have any usd, they had to accept worthless military equipment against marketable commodities…not such a bad deal for russia (marginal cost of these planes is 0)….

    Comment by Viennacapitalist — January 2, 2015 @ 10:12 am

  3. What a joke: Putin the Nazi is reanimating Schacht’s Neuer Plan from the 30’s, on a farcical level. som much for russia the super power: it is if you count a super power as a lobotomized Ape with nukes.

    Comment by sotos — January 2, 2015 @ 1:14 pm

  4. This just made me sad for both of them. All I did was close my eyes and shake my head slowly. Old fighter jets for food. Ugh. Both countries have more than enough resources to flourish, yet here we are. Were there any rubber boots mentioned? I wonder if that made it into the deal. But seriously, it’s sad to see second tier countries go to so much trouble to avoid success.

    Comment by Howard Roark — January 2, 2015 @ 2:01 pm

  5. @Tim-I think the concern is more that the Argentines could use the Sukhois to fight off any attempt of the British to retake the islands after Argentina seized them, a la 1982. A few Super Entendards and some obsolescing A-4 Skyhawks inflicted some serious damage on the British task force that retook the islands.

    The British Navy was able to fight them off, barely, with Harriers operating from Hermes and Invincible. The UK currently has no active carriers, and the two under construction will not have fixed wing aircraft (F-35s) deployed until 2020 or later. Thus, with the delivery of the SU-24s, there will be a 5 year period (assuming everything goes to plan, which is a dangerous assumption in naval construction and especially with the F-35) in which Argentina will have air dominance over the Falklands. The Argies won’t need to use them to bomb the islands; their presence could make the British decide not even to attempt to retake them in the event of another Argentine adventure.

    The ProfessorComment by The Professor — January 2, 2015 @ 2:37 pm

  6. People tend to rig the Falklands discussion slightly by starting with a scenario where the British have to retake the Islands. However, in 1981, the islands were undefended – a dozen or so marines – and the Argentine military was able to simply walk in, leaving the British with the task of taking the Islands back. Today the islands are well defended, with four Typhoons, over a thousand troops, rapier missiles and a warship, so the strategic situation is reversed. Now it is the Argentines who would have the task of taking the Falklands, and two things are very unclear. One, how they would get a task force across to the Falklands – their navy is a shadow of what it was in 1982 – and two, how these planes would help.

    Comment by jon livesey — January 2, 2015 @ 4:04 pm

  7. “it will conquer islands with 500,000 sheep.”
    [Insert Scottish sheep sex joke here]

    Comment by Blackshoe — January 2, 2015 @ 11:09 pm

  8. @SWP,

    So the British defence policy, adopted after having let the Royal Navy wither into irrelevance, is to whinge about the sale of near-obsolete equipment to potential adversaries. That spinning sound you hear is Nelson in his grave.

    Although Jon Livesey makes a good point, also.

    Comment by Tim Newman — January 3, 2015 @ 8:01 am

  9. I wonder if the US would allow a UK military “defeat” due to inability to retake the Falklands. Jon Livesey provides some great insight into why that wouldn’t happen, and the presence of those forces on the islands also means that the Argentinians would have to kill a lot of British soldiers to occupy the Islands, unlike in 1982, when they didn’t kill anyone taking them. I have to think that killing British soldiers would dramatically increase the likelihood of a direct US intervention. Beyond that, and the argument that the US should show solidarity with the UK for their participation in Iraq/Afghanistan, it would be very embarrassing for the US to have its key ally defeated without being able to put up a fight.

    Comment by JDonn — January 3, 2015 @ 6:51 pm

  10. WSJ today “Notable and Quotable” say there is promise of oil near the Falklands.

    Comment by Margaret Aten — January 3, 2015 @ 6:56 pm

  11. @JDonn. I dunno, especially under this administration. Even the Reagan administration was not supportive of Thatcher’s retaking of the islands. Obama pretty much detests the British. He even intended to refer to the Falklands by the name the Argentines use-the Malvinas-but he fumbled it, calling them the Maldives instead.

    Put simply, if I were the UK, I would put more faith in the Typhoons and Rapiers than hopes that the US cavalry would ride to my defense (or defence;-) )

    Re @Jon’s point, yes, it would be a much tougher nut for the Argentines to crack initially than it was in ’82, but the force that they deployed provides a pretty thin margin (a very thin red line, as it were) and Argentina might be just crazy enough to test it. And if they succeed, I don’t see any way that the UK could mount an expedition to recapture them.

    The ProfessorComment by The Professor — January 3, 2015 @ 8:20 pm

  12. @SWP, I definitely take your point about Obama, and I didn’t know that about the Malvinas thing, that is pretty bad. What I was trying to get at is that I actually think the US would have more directly at stake in a conflict now and that this is an interesting twist given how close Reagan/Thatcher were compared with relations now. If arguably the major European military power was exposed as being unable to defend its territory it would be bad for the US, as opposed to the argument in the ’80’s where the British were able to handily defeat the Argentinians, and the US was more concerned with relations with South America and perceptions of colonialism. The US should in theory feel the need to prop up their key ally. Ultimately I think it is a totally moot point, I don’t see how Argentina remotely has the will or capability to attack again post-Junta. Which is good as long as Obama is President.

    Comment by JDonn — January 4, 2015 @ 1:25 am

  13. Rasha is going after oligarchs – who have left the building.

    I guess Putler and his gang will prop up the ruble with proceeds from these lawsuits.

    http://www.businessinsider.com/russia-is-using-western-courts-to-go-after-its-wealthy-fugitives-2015-1

    From the gilded shores of the Hamptons and the French Riviera to the London stomping grounds of the super-rich, Russia is pursuing ex-officials and entrepreneurs like Bullock who amassed wealth in Russia and then fled the country after falling afoul of powerful officials.

    And despite Moscow’s chilled relations with the West over the Ukraine crisis, these efforts in recent months have yielded several favorable rulings for Russia in U.S. and European courts.

    Comment by elmer — January 8, 2015 @ 9:06 am

  14. Actually Prof, Reagan and his secretary of defence were very much in favour of the UK retaking the islands. The airbase at ascension island was a US base on British territory and its facilities were provided by the US to support British operations. The US defence establishment also provided the latest AIM-9L all aspect IRAAMs, and the secretary of defense even offered the use of a US carrier which was politely devlined. The department of state was, however, somewhat pro Argentina, but were slapped into place fairly quickly.

    Comment by Andrew — January 8, 2015 @ 9:31 am

  15. http://www.telegraph.co.uk/finance/economics/11337044/Russia-has-deteriorated-significantly-as-Fitch-cuts-credit-rating.html

    Russia ‘has deteriorated significantly’ as Fitch cuts credit rating
    Fitch has written a scathing assesment of Russia’s economy after downgrading it to BBB

    Fitch has downgraded Russia’s credit rating and painted a horrific picture of a struggling economy rocked by a collapsing rouble, falling oil prices, high inflation and declining international reserves.

    The ratings agency cut the country to BBB- from BBB with a negative outlook, meaning further downgrades are possible.

    But it was the language Fitch used in its reasoning that was most shocking.

    Russia’s economic outlook “has deteriorated significantly” in just six months, Fitch stated. Gross Domestic Product will shrink 4pc this year, the agency added, far worse than the 1.5pc contraction it previously expected. “Growth may not return until 2017,” Fitch said.

    —-

    Total reserves have fallen from $511bn to $388bn in a year. The Kremlin has already committed a third of what remains to bolster the domestic economy in 2015, greatly reducing the amount that can be used to defend the rouble.

    Fitch ended its scathing assessment of Russia with a look at the country’s government, labelling it a “weakness”.

    “Governance is a relative weakness: Russia scores badly on World Bank and Transparency International indicators, for example. Russia’s current predicament has done little to hasten the onset of a more liberal economic policy agenda and raises the risk of greater isolationism. The business environment has long hampered diversification outside the energy sector.”

    Comment by elmer — January 10, 2015 @ 1:24 pm

  16. Let me understand your logic:

    Russia is selling its airplanes to Argentina, and you are afraid that they will be good enough for Argentina to liberate/decolonize the Malvina Islands.

    Argentina is selling its beef and wheat (doesn’t Russia have its own wheat and even export it?) to Russia.

    And you think this trade is a bad deal for both countries?

    Comment by vlad1 — January 20, 2015 @ 3:50 am

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