Russian authorities have detained Evan Gershkovich, a correspondent for the Wall Street Journal, on espionage accusations. Yet, it’s possible that the Kremlin didn’t like the information he gave them about Russia’s faltering economy.
The Federal Security Service of Russia made public the arrest of American citizen Michael Gershkovich in Yekaterinburg, stating that he was seized for “gathering information on one of the firms of the Russian military-industrial complex” on U.S. orders.
The Journal has called for his immediate release.
The invasion of Ukraine has strained ties between Russia and the United States. However, the arrest of a U.S. journalist in Russia is a further escalation since it has not occurred since the Cold War.
The essay “Russia’s Economy Is Beginning to Come Undone,” which Gershkovich co-authored with Georgi Katnchev, led to his arrest. The two discussed the lingering effects of Russia’s economic difficulties and isolation since the Ukrainian conflict began.
The report argues that Russia’s government income is being squeezed, and its economy has changed to a lower-growth trajectory, presumably for the long term, as the conflict enters its second year and Western sanctions bite deeper.
Major markets have abandoned the country’s two most valuable exports—natural gas and oil. There is a shortage of government funds.
Since last November, the ruble has lost approximately 20% of its value versus the dollar. Young men are being sent to the front or leaving the nation to avoid conscription, both of which reduce the available work supply. Businesses are investing less due to the lack of assurance.
Due to its isolation from other global markets, Russia has come to rely more on its economic connection with China, as noted in the research. The issue today is how much longer the Russians can keep their economy viable in the face of the blows to their oil earnings before it collapses.
Russia’s potential growth rate, or the pace at which it may develop without inviting inflation, was assessed by the International Monetary Fund to be approximately 3.5 percent before 2014, the year it took Crimea from Ukraine. Some analysts claim it is now closer to 1% due to falling productivity, technical backwardness, and isolation in the economy.
The essay concludes with research showing that the Russian economy has changed substantially with low odds of mitigating the harm.
The author was summarily arrested as a spy.
