Russian reserves are melting
We know nothing about the state of the Russian economy
Among the experts, you will find positions that the Russian economy is strong and will last for another ten years. Other experts say that 2024 is the last year of the Russian economy.
The fact is that the data is mostly classified, and the data that is available does not inspire the slightest confidence.
It is necessary to collect weak signals (realizing that half of these signals are artificially generated by the FSB, but not understanding which half) and draw some conclusions based on this.
This is a rather shaky basis for reasoning, and one can only conclude that the patient is either alive or dead.
If some expert tells you that he knows exactly what the state of the Russian economy is, and this expert is not a Ukrainian intelligence officer who personally recruited the Russian Minister of Economy, this information is hardly worth trusting.
So I will try to collect a few things that can be stated with certainty. I'm sorry if they seem trivial - the reasons are described above.
- Any war depletes the economy of the country at war. Russia's reserves are melting, and this already means that the war will not last forever.
- The Russian Federation continues to benefit from energy trade, and this feeds the war.
- Russia is becoming increasingly dependent on China and India, especially on China. Assets denominated in yuan are worth exactly what the Chinese leadership says they are worth.
- Sanctions are working: entire sectors of the economy have disappeared or are on the verge of collapse.
- Sanctions are being circumvented. But this cannot save the entire economy, only certain sectors, primarily the military-industrial complex.
- The circumvention of sanctions will gradually be closing more and more tightly. But gradually.
- No deterioration in life affects the "hinterland people," who can be roughly estimated at 85% of the population. Their life is bad and has always been so, they are used to it. "If you haven't lived well, you should not start," Zhvanetskyi exhaustively described.
- The economic deterioration affects the elites first and foremost, but they have learned to make money (steal) from the war. At the same time, the elites are not stupid and realize that there is a cash desk somewhere at the exit and they will have to pay.
- Much of the most productive human capital has left, but the impact of this will be spread over time.
To summarize, we know very little.
My conclusion is that Ukraine must hold out at least one day longer than the enemy (I have already written about this). The object of Ukraine's influence should be the Russian elites, not the conventional Belgorod. There will be no hunger riots in Russia. There will be a split in the elites, if Ukraine tries.
About the author. Valeriy Pekar, lecturer at the Kyiv-Mohyla Academy
The editors do not always share the opinions expressed by the authors of the blogs.