Moscow took the colossal rents it generated selling oil and gas and redistributed them to pensioners and to industries that were not globally competitive but employed large numbers of people, such as auto manufacturing. It also used these rents to finance Putin’s military buildup, which was costing Russia 25 percent of its total federal budget by the time the “little green men” descended on Crimea. All this meant that Russia was completely dependent on foreign trade—more so than the United States, more than Japan, more than even China. But that dependency cut both ways, and it was clear that
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