The 1% Podcast

Constantin Gurdgiev

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    Constantin Gurdgiev

    Russia Ukraine Conflict - Why and What Next?

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.

Recorded March 14th 2022.


Show Notes:


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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