Hello! This is Alexandra Prokopenko with your weekly guide to the Russian economy — brought to you by The Bell. I am joined this time by analyst Alexander Kolyandr. We focus this week on how the Ukraine war is gradually becoming key to both Russia’s economy and its politics and
Russia’s war in Ukraine is already in its 17th month. In that time, President Vladimir Putin has clearly demonstrated that he is not bothered by losses — whether they be financial, material, or human. His war will go on as long as he needs. And, judging by how the authorities have woven the so-called “special military operation” into Russian life, that will be a long time.
So they’re raiding their welfare fund to sustain the war. Thing is, according to the newsletter, the fund will go from 6.8 to 2.5 trillion rubles in 1 year. And this is to be an eternal war? What do they do once everyone’s pensions are wiped out?
no one is counting on pensions here. even if you have worked all your life in 2 companies at the same time with salary near 4000$ at mounth, you will receive pension only $160 per month.
The Russian economy is set to completely reverse last year’s slump – something Putin has recently highlighted. Manufacturing and construction lead the way, alongside retail. In a broad sense, all three sectors are beneficiaries of the war. The defense sector, working in three shifts, is boosting production: in June, for example, the biggest increases were in finished metal products (+45.8% year-on-year); computers, electronics and optics (+71.6% year-on-year), radar equipment (+75.4% year-on-year) and electrical equipment (+32.1% year-on-year). Production capacities are running at their maximum.
This is one of the things I pointed out in the post on the permanent war. Russia since the beginning dumped into the war old and outdated equipment. They sent to the front those who they considered the less valuable soldiers at the same time initially they avoided to send recruits from the draft to minimise the political backlash within Russia.
Since the beginning they handled it as a long term attrition war.
Yup, and the US military-industrial-complex has been frothing at the mouth for another long-term war they can profit off of, and they've got their wish.
That's not true. They lost most of their so-called "elite" units at the beginning of the war, thinking it would be a very short war and that these units would just walk into Kyiv. Units which they are incapable of replacing in any meaningful way.
The mobilisation only came months after their initiation of the war, when they realised it would not be a short term affair.