In the post just below this one, Volodymyr Zelenskyy made a claim that’s been made from Kyiv before:
“We see what is already happening with the Russian economy and what could happen next if the pressure works correctly.”
This was a topic on our past weekly Q&A with military analyst Michael Clarke, who said Russia’s economic output is suffering.
Moscow has been subjected to crushing international sanctions, which are targeting its ability to fund its war machine.
Most recently, in October, the US sanctioned Russian oil giants Rosneft and Lukoil, which have been described by US correspondent David Blevins as the “twin engines pumping money through Russia’s military veins”.
But as of now, the Russian economy still hasn’t collapsed under the accumulating weight of economic countermeasures.
That said, Clarke added it’s certainly shaky – “now much more so than before”.
The numbers
At the beginning of the war, the economy got a boost from war spending, which made it grow at about 4.5%.
This year’s estimate by the IMF is below 0.8% – the lowest amount throughout the developed world, Clarke said.
Among the issues, Clarke named a labour shortage, a tight fiscal situation (because all the credit has been given to the war industry) and falling energy prices that reduce Russian income.
Russia increasingly has to dip into its sovereign wealth fund and has already spent about half of it.
Is Ukraine too optimistic?
But despite all that, the economy is not going to tip, Clarke said.
He noted there are other examples of economies around the world that don’t actually end up collapsing.
Clarke believes the Ukrainian predictions that the structural problems will have an effect and eventually lead Russian society to bring Vladimir Putin down are “over-optimistic”.
With Russia being close to a totalitarian society, there is no way for suffering people to express their discontent.
