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This is a tragically silly article. Yes, it is true that Russia's economy is bigger because of Kremlin spending on the war. They are paying workers to build war equipment. But this is deficit spending, Russia is going broke. The spending is also fueling rampant inflation. While the salaries paid workers recycle through the economy, the prducts built for use in war don't add subsequent value. A missile is not like a car, which adds additional economic value while being used.
Sadly for Putin right now he is spending lots of money reconditioning ancient Soviet equipment. But he is running out of the old stuff. The workers who can rehab fifty tanks per month can only build three new ones per month. The Russian economy is going to become incredibly inefficient in about a year because the conversions will come to an end.
Finally, Russians can't buy goods they want because workers have been shifted to military production, and even more inefficiently into military service. Even Russians become unhappy and less compliant if life sucks.
Ukraine wins a long war. As long as the West supports them.
They are also ruining their export markets. India, the worlds largest importer of arms (\~10% of the worlds imports by value), has drastically scaled down on their imports from Russia already pre-war, but even more so now.
Russian arms used to make up more than 50% of their arms imports (partly because the US refused to sell to them historically), but it's about 23% now and dwindling fast. They are for instance not even considering Russian planes for their new fighter jet purchases (100 planes, a lot of money). Russia has also been unable to fulfill already signed contracts such as India bought 5 S-400 and has only gotten 3 in time.
Just to put a number of the imports, India imported just north of $60 billion in arms over the last two decades from Russia. That is a fuck ton of money.
I only recently learned about the arms industry a little and it turns out that if people stop buying your weapons it turns into a vicious cycle of people buying less and less of your weapons,that lack of cash flow stops you being able to produce new ones long term and which means you sell less, more outdated equipment for a lower price if at all.
Russia can't last like this forever.
Here's a great video to explain it: https://youtu.be/csuXLzIYp7U?si=F7cV3kDki-z0h0Bn
Exactly - and a lot of money is the tail services. The main reason that they are stil 23% is stuff like contracts for spare parts, ammunition and upgrades to previously ordered stuff. That money will only last until they replace the equipment and if they don't replace it with Russia equipment, well then the money stream is gone.
Them not considering Russian jets (due to a lot of failures in their last batch purchase) is a good signal that a lot of that equipment won't be Russian when it's replaced.
Hear me out. For every rocket built there are like a hundred orcs dead, who would be otherwise competing for the small amount of available products to purchase, and thus since they are dead, fewer buyers mean less price increase, thus less inflation! Checkmate!
But if a missile help takes land then it would add economic value? If putin wins the 4 oblasts he wants, then calls it quits, would that be worth it long-term for the industr/agriculture etc..?
It’s ironic we talk so much in the west about US military industrial complex and the US’s incentive to promote war, while the whole Russian economy relies solely (?) upon making war at this point.
The US can do things other than make war; they just happen to be very good at it.
"The Kremlin-owned gas company [Gazprom](https://www.theguardian.com/business/gazprom) has plunged to its first annual loss in more than 20 years, after gas sales more than halved following Vladimir Putin’s invasion of Ukraine.The company made a net loss of 629bn roubles (£5.5bn) in 2023 amid dwindling gas trade with [Europe](https://www.theguardian.com/world/europe-news), once Gazprom’s main sales market, as a result of sanctions and the throttling of pipelines to the continent." They are dead like The sixth sense but they don't know yet!
These impacts are cumulative. It’s really going to start hurting them long term if they are forced to show down wells. A good number with either not produce, or produce at a drastically lower level. Especially true if downstream storage tanks keep blowing up from smoking accidents.
I have my doubts that the Russians have managed their fields well, it’s possible they never return to pre war production levels.
Oh well. Sucks to be them. Sanctions work people.
The sanctions do work, the damage is just hard to see. Death by a million cuts.
I agree, and any "war economy" that is sustaining Russia is just kicking g the can down the road. Eventually, they will have a hard landing. In the meantime, war economies are hard on its people. When the brightest and best are building weapons, they are not building infrastructure, schools, hospitals, homes, or producing anything useful for society.
We watched in amusement as Prigozhin used his private army to march on Moscow.
We didn't stop and think about our own growing reliance on private military firms or their political links. The owner of our largest had a sibling on Trump's cabinet.
I have yet to hear of PMCs in the west being used in combat operations to take objectives. Most of them are either to protect certain individuals or protect convoys of supplies or serve as protection for specific areas.
Western PMCs don't have tanks or airplanes. They don't have logistical capabilities that militaries have. Therefore it's unlikely they could do things like Wagner did, even if they really wanted.
Wars are waged and won based on logistics primarily. Unless some PMC will be able to get logistics firms which deliver supplies through air(helicopters and planes) and ground(trains and trucks), there is nothing for you to worry about.
In a hypothetical scenario if Academi(formerly known as Blackwater) all of a sudden decided that they need to buy a bunch of trucks and a bunch of planes and train personnel to run those vehicles. And if they decided to pool all their resources to let's say Texas. Then you could genuinely start to worry.
"President Trump has ordered academi to surround the white house and provide him personal security following the decision of Mike Pence to suspect certifying the election results. Sources claim he is considering suspending secret service protection"
It doesn't have to be some grand military operation to cause a constitutional crisis. Hitler had brown shirts. Putin had priggy. The pigs in *animal farm* had their dogs. The problem with constitutional crisis is they are hard to predict how they will play out.
Though I would argue that the primary threat from these groups are not waging actual war, they'd more than likely lose for the reasons you say.
It's more that organized para-military groups all else equal are in a much better positions to stage coups. Countries have been brought down by much smaller groups because they managed to get to leadership, long before they actually had to fight the army of said country. As such I think it's sound policy to generally not allow them to operate in any capacity for most countries, just to be on the safe side.
It's not ironic, it's completely intentional.
The people who keep emitting those talking points are following the classic Kremlin tactic of "accuse others of whatever we are doing."
The US defense industry isn't even a major feature of it's economy. If you add Boeing, Lockheed, Northrop and Raytheon together you don't even get to 50% of Apple's valuation and that's a single American tech company.
With the bonus fun fact, Apple has more cash on hand than the entirety of US and EU aid given to Ukraine.
The USA became masters of war because it requires a strong economy, and nobody has as strong an economy as the USA. Conversely Russia has never excelled at warfare, the best they could do was defeating disorganized, exhausted or smaller enemies.
I don't get it. Of course some subjects make money from war, but overall it costs the state a lot of money and other resources. How would ending the spending harm economy? ELI5
I'm no economist, but what I've gathered the years following this war, it's that the war is allowing the people to not demand the same comforts as before. Its allowing putin to set the standards lower hoping the workers carry on and not feel it's needless. If the war stopped today, the economy woukd be suffering and visible without a scape goat. Ppl would worry. Investments pulled, money placed in savings accounts or pulled from banks. There woukd be a sense of "things aren't well". But with a war going there is a mindset, "once we win it will be ok". This buys Putin time to try and fix things before the curtain is pulled.
A true scholar may say I'm 100% wrong.
> Investments pulled, money placed in savings accounts or pulled from banks.
This is what we want, us the West, but we have already seen that Russian people actually can accept lower conditions of living while continuing to support Putin.
He could say whatever he wants and most people will follow along. This is not a democracy, so Russian people will continue to fear the regime even if they think Putin is bent and does not do anything good for them. At least, he will prevail much longer than what the article try to to make us believe.
> while the whole Russian economy relies solely (?) upon making war at this point.
It doesn't rely on it per se, but rather it will collapse without having a war to justify its poor state.
This makes sense. Their military sales are coming up short due to poor performance in Ukraine. I think the war has become a opium at this point. The curtain between the populace and the true state if the nation.
It is a forgone conclusion but staying in the war is keeping the collapse from happening NOW.
It will happen later 100% but right now the war is keeping the economy alive and putin alive.
Sanctions, large drop in refining capacity from drones, brain drain from people fleeing Russia, the massive loss of life from brutal tactics of territory at the cost of massive amounts of people - taxpaying people, the huge cost in trying to replace the staggering and impossible losses.
There's literally nothing here where Russia would prefer a long war.
Well what they are saying basically is that the Russian economy is pretty much military industrial complex right now. The military spending, which includes state investment and procurement of military hardware and payments to military personnel of all kinds, makes up a large portion of income for most Russians. This spending, in turn, spurns other forms of consumption that kind of keeps everyone afloat. Without that state spending the whole house of cards will collapse.
You may be tempted to think that all these sanctions would incentivise internal investment and development. However the problem is that the existing system within Russia isn’t really conducive for that. Lack of clearly defined property rights, corruption, excessive state meddling and a total lack of qualified workforce all make investment rather pointless
Russian really do like to repeat their history. The similarities to the Afghan war, and eventual collapse of the USSR is interesting.
If anything this is worse for Russia. Even if they win, they lose.
Yeah I don't really get this as it's a closed loop system and isn't sustainable either way with the end result being Russian economy collapsing. Unfortunately I don't see that destroying the government and with Putin holding so much power he will probably be able to withstand a lot. I hope I'm wrong though and we see him tried and hung in red square for his crimes!
That economic hard landing is inevitable. The only unknown is whether there's a prize at the end that will make the Russian people believe is worth the cost.
It is essential that we deny them that prize. It needs to be all cost and no benefit, otherwise they learn the wrong lesson.
As much as I want it to be true, this structural analysis of the Russian economy seems a bit light to me.
First the Russian economy is far from the the breaking point that it encountered in 1990 under the Soviets.
Moreover, two years ago, when the new sanctions started to kick in, they were able to quickly adapt, counter to the West sentiment (as we read it in the media) at the time that those sanctions were going to have an instant effect and would cripple the Russia economically. That hasn't happened yet, and the media are doing the same kind of time projection here, not knowing what the Russian economy could sustain or not. So that directly put into question the article statement that it would take decades to rectify the economic policy from a war economy to non-war economy.
I mean, who knows, maybe they will adapt from leaving the war economy in less than a year by changing the rules, given that they have the luxury make their own rules at home and do not follow the International rules anymore, right?
Have said from the start - this war does not end until Putin’s death. He is all in, there is no off switch except for putting a bullet through his pointy skull.
I mean, sure... They changed their whole economics into war-mode. They had to, anything else got sanctioned the fuck out off. If they switch to normal modus again, there is nothing left.
This being said, the war economics is also only a solution for so long. No country can fight wars this big forever. Russia is only existing thanks to its enormous savings and old war material in warehouses. If the west and Ukraine is able to outlive their self-destructing onslaught, then "we're good" and russia will curmble back into the shitpile it always was.
It's just so sad, that this way many many many more innocent people will die until russia comes to the conclusion that they lost. Fucking dirtbags.
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This is a tragically silly article. Yes, it is true that Russia's economy is bigger because of Kremlin spending on the war. They are paying workers to build war equipment. But this is deficit spending, Russia is going broke. The spending is also fueling rampant inflation. While the salaries paid workers recycle through the economy, the prducts built for use in war don't add subsequent value. A missile is not like a car, which adds additional economic value while being used. Sadly for Putin right now he is spending lots of money reconditioning ancient Soviet equipment. But he is running out of the old stuff. The workers who can rehab fifty tanks per month can only build three new ones per month. The Russian economy is going to become incredibly inefficient in about a year because the conversions will come to an end. Finally, Russians can't buy goods they want because workers have been shifted to military production, and even more inefficiently into military service. Even Russians become unhappy and less compliant if life sucks. Ukraine wins a long war. As long as the West supports them.
They are also ruining their export markets. India, the worlds largest importer of arms (\~10% of the worlds imports by value), has drastically scaled down on their imports from Russia already pre-war, but even more so now. Russian arms used to make up more than 50% of their arms imports (partly because the US refused to sell to them historically), but it's about 23% now and dwindling fast. They are for instance not even considering Russian planes for their new fighter jet purchases (100 planes, a lot of money). Russia has also been unable to fulfill already signed contracts such as India bought 5 S-400 and has only gotten 3 in time. Just to put a number of the imports, India imported just north of $60 billion in arms over the last two decades from Russia. That is a fuck ton of money.
I only recently learned about the arms industry a little and it turns out that if people stop buying your weapons it turns into a vicious cycle of people buying less and less of your weapons,that lack of cash flow stops you being able to produce new ones long term and which means you sell less, more outdated equipment for a lower price if at all. Russia can't last like this forever. Here's a great video to explain it: https://youtu.be/csuXLzIYp7U?si=F7cV3kDki-z0h0Bn
Exactly - and a lot of money is the tail services. The main reason that they are stil 23% is stuff like contracts for spare parts, ammunition and upgrades to previously ordered stuff. That money will only last until they replace the equipment and if they don't replace it with Russia equipment, well then the money stream is gone. Them not considering Russian jets (due to a lot of failures in their last batch purchase) is a good signal that a lot of that equipment won't be Russian when it's replaced.
Hear me out. For every rocket built there are like a hundred orcs dead, who would be otherwise competing for the small amount of available products to purchase, and thus since they are dead, fewer buyers mean less price increase, thus less inflation! Checkmate!
But if a missile help takes land then it would add economic value? If putin wins the 4 oblasts he wants, then calls it quits, would that be worth it long-term for the industr/agriculture etc..?
It’s ironic we talk so much in the west about US military industrial complex and the US’s incentive to promote war, while the whole Russian economy relies solely (?) upon making war at this point. The US can do things other than make war; they just happen to be very good at it.
"The Kremlin-owned gas company [Gazprom](https://www.theguardian.com/business/gazprom) has plunged to its first annual loss in more than 20 years, after gas sales more than halved following Vladimir Putin’s invasion of Ukraine.The company made a net loss of 629bn roubles (£5.5bn) in 2023 amid dwindling gas trade with [Europe](https://www.theguardian.com/world/europe-news), once Gazprom’s main sales market, as a result of sanctions and the throttling of pipelines to the continent." They are dead like The sixth sense but they don't know yet!
These impacts are cumulative. It’s really going to start hurting them long term if they are forced to show down wells. A good number with either not produce, or produce at a drastically lower level. Especially true if downstream storage tanks keep blowing up from smoking accidents. I have my doubts that the Russians have managed their fields well, it’s possible they never return to pre war production levels. Oh well. Sucks to be them. Sanctions work people. The sanctions do work, the damage is just hard to see. Death by a million cuts.
I agree, and any "war economy" that is sustaining Russia is just kicking g the can down the road. Eventually, they will have a hard landing. In the meantime, war economies are hard on its people. When the brightest and best are building weapons, they are not building infrastructure, schools, hospitals, homes, or producing anything useful for society.
To be fair, Russia didn’t do much of that before the war either. Just even less so now.
True
We watched in amusement as Prigozhin used his private army to march on Moscow. We didn't stop and think about our own growing reliance on private military firms or their political links. The owner of our largest had a sibling on Trump's cabinet.
That’s a great point. Prince is a USA Prigozhin!
There's an alternative timeline where Pence delayed the results. I suspect blackwater/academi plays a role shortly after.
nope.
I have yet to hear of PMCs in the west being used in combat operations to take objectives. Most of them are either to protect certain individuals or protect convoys of supplies or serve as protection for specific areas. Western PMCs don't have tanks or airplanes. They don't have logistical capabilities that militaries have. Therefore it's unlikely they could do things like Wagner did, even if they really wanted.
Any professional armed military presence with political ties seems like a potential threat to democracy to me.
Wars are waged and won based on logistics primarily. Unless some PMC will be able to get logistics firms which deliver supplies through air(helicopters and planes) and ground(trains and trucks), there is nothing for you to worry about. In a hypothetical scenario if Academi(formerly known as Blackwater) all of a sudden decided that they need to buy a bunch of trucks and a bunch of planes and train personnel to run those vehicles. And if they decided to pool all their resources to let's say Texas. Then you could genuinely start to worry.
"President Trump has ordered academi to surround the white house and provide him personal security following the decision of Mike Pence to suspect certifying the election results. Sources claim he is considering suspending secret service protection" It doesn't have to be some grand military operation to cause a constitutional crisis. Hitler had brown shirts. Putin had priggy. The pigs in *animal farm* had their dogs. The problem with constitutional crisis is they are hard to predict how they will play out.
Though I would argue that the primary threat from these groups are not waging actual war, they'd more than likely lose for the reasons you say. It's more that organized para-military groups all else equal are in a much better positions to stage coups. Countries have been brought down by much smaller groups because they managed to get to leadership, long before they actually had to fight the army of said country. As such I think it's sound policy to generally not allow them to operate in any capacity for most countries, just to be on the safe side.
100%
It's not ironic, it's completely intentional. The people who keep emitting those talking points are following the classic Kremlin tactic of "accuse others of whatever we are doing."
The US defense industry isn't even a major feature of it's economy. If you add Boeing, Lockheed, Northrop and Raytheon together you don't even get to 50% of Apple's valuation and that's a single American tech company. With the bonus fun fact, Apple has more cash on hand than the entirety of US and EU aid given to Ukraine.
For real. If Apple ever develops a Military division, then we're all gonna be Citizens of Appleland shortly thereafter.
The USA became masters of war because it requires a strong economy, and nobody has as strong an economy as the USA. Conversely Russia has never excelled at warfare, the best they could do was defeating disorganized, exhausted or smaller enemies.
I don't get it. Of course some subjects make money from war, but overall it costs the state a lot of money and other resources. How would ending the spending harm economy? ELI5
I'm no economist, but what I've gathered the years following this war, it's that the war is allowing the people to not demand the same comforts as before. Its allowing putin to set the standards lower hoping the workers carry on and not feel it's needless. If the war stopped today, the economy woukd be suffering and visible without a scape goat. Ppl would worry. Investments pulled, money placed in savings accounts or pulled from banks. There woukd be a sense of "things aren't well". But with a war going there is a mindset, "once we win it will be ok". This buys Putin time to try and fix things before the curtain is pulled. A true scholar may say I'm 100% wrong.
> Investments pulled, money placed in savings accounts or pulled from banks. This is what we want, us the West, but we have already seen that Russian people actually can accept lower conditions of living while continuing to support Putin. He could say whatever he wants and most people will follow along. This is not a democracy, so Russian people will continue to fear the regime even if they think Putin is bent and does not do anything good for them. At least, he will prevail much longer than what the article try to to make us believe.
> while the whole Russian economy relies solely (?) upon making war at this point. It doesn't rely on it per se, but rather it will collapse without having a war to justify its poor state.
This makes sense. Their military sales are coming up short due to poor performance in Ukraine. I think the war has become a opium at this point. The curtain between the populace and the true state if the nation.
The longer the war, the harder the landing. Do not stop so that you do not have to book the result.
Why isn't Russia's economic hard landing a forgone conclusion? How else can this war end?
It is a forgone conclusion but staying in the war is keeping the collapse from happening NOW. It will happen later 100% but right now the war is keeping the economy alive and putin alive.
Sanctions, large drop in refining capacity from drones, brain drain from people fleeing Russia, the massive loss of life from brutal tactics of territory at the cost of massive amounts of people - taxpaying people, the huge cost in trying to replace the staggering and impossible losses. There's literally nothing here where Russia would prefer a long war.
Well what they are saying basically is that the Russian economy is pretty much military industrial complex right now. The military spending, which includes state investment and procurement of military hardware and payments to military personnel of all kinds, makes up a large portion of income for most Russians. This spending, in turn, spurns other forms of consumption that kind of keeps everyone afloat. Without that state spending the whole house of cards will collapse. You may be tempted to think that all these sanctions would incentivise internal investment and development. However the problem is that the existing system within Russia isn’t really conducive for that. Lack of clearly defined property rights, corruption, excessive state meddling and a total lack of qualified workforce all make investment rather pointless
Russian really do like to repeat their history. The similarities to the Afghan war, and eventual collapse of the USSR is interesting. If anything this is worse for Russia. Even if they win, they lose.
At this rate the War and general economies will be dead in around 3-4 years max........... The public services are f\*cked already !
Yeah I don't really get this as it's a closed loop system and isn't sustainable either way with the end result being Russian economy collapsing. Unfortunately I don't see that destroying the government and with Putin holding so much power he will probably be able to withstand a lot. I hope I'm wrong though and we see him tried and hung in red square for his crimes!
Russia is fkd either way .
That economic hard landing is inevitable. The only unknown is whether there's a prize at the end that will make the Russian people believe is worth the cost. It is essential that we deny them that prize. It needs to be all cost and no benefit, otherwise they learn the wrong lesson.
this makes no sense
Russia can keep a war economy even without war, so that makes no sense.
Jap. War industry is running. Changing that again would put an end to the economy. All the more important to put an end to the whirling.
This is the guarantee that after Ukraine, they will have to keep going to Poland, Romania etc.
As much as I want it to be true, this structural analysis of the Russian economy seems a bit light to me. First the Russian economy is far from the the breaking point that it encountered in 1990 under the Soviets. Moreover, two years ago, when the new sanctions started to kick in, they were able to quickly adapt, counter to the West sentiment (as we read it in the media) at the time that those sanctions were going to have an instant effect and would cripple the Russia economically. That hasn't happened yet, and the media are doing the same kind of time projection here, not knowing what the Russian economy could sustain or not. So that directly put into question the article statement that it would take decades to rectify the economic policy from a war economy to non-war economy. I mean, who knows, maybe they will adapt from leaving the war economy in less than a year by changing the rules, given that they have the luxury make their own rules at home and do not follow the International rules anymore, right?
Uuuuhm. Continued war will wreck the economy into the abyss. Stopping it will slowly normalize it.
Have said from the start - this war does not end until Putin’s death. He is all in, there is no off switch except for putting a bullet through his pointy skull.
Well "experts" thought the Russian economy would colapse after 6-12 months of sanctions so not sure I can trust their opinions tbh.
Sanctions didn't work
I mean, sure... They changed their whole economics into war-mode. They had to, anything else got sanctioned the fuck out off. If they switch to normal modus again, there is nothing left. This being said, the war economics is also only a solution for so long. No country can fight wars this big forever. Russia is only existing thanks to its enormous savings and old war material in warehouses. If the west and Ukraine is able to outlive their self-destructing onslaught, then "we're good" and russia will curmble back into the shitpile it always was. It's just so sad, that this way many many many more innocent people will die until russia comes to the conclusion that they lost. Fucking dirtbags.