Connect with us

Finance

Russia’s Economic Prospects Have Gone From Bad To Terrible

Published

on

Russia’s full-scale invasion of Ukraine and Ukrainian resistance to that invasion remains the most significant international event of 2022. Beyond the military implications, the invasion has created millions of Ukrainian refugees, caused many men of military-age to leave Russia, affected food and energy supplies and changed the Russian economy.

In March 2022, I interviewed Brian D. Taylor, a professor of political science at Syracuse University and author of the highly acclaimed book The Code of Putinism. To gain his insights on the events of the past ten months, I asked Professor Taylor, who responded in writing, what the future holds for Russia. He discusses the war’s progress, the state of the Russian economy, Russian attacks on Ukrainian infrastructure, Vladimir Putin’s view of Ukrainian sovereignty and other topics.

Stuart Anderson: How do you think Vladimir Putin and those around him view the progress of the war in Ukraine since the widescale invasion began in February 2022?

Brian D. Taylor: Putin and his team certainly understand that the war has not gone according to plan. Two key moments stand out: the decision to withdraw units attacking Kyiv in March and April and the decision to announce a so-called “partial mobilization” in September. In the first case, Putin had to give up on his goal of quickly toppling the Ukrainian government. In the second case, he had to acknowledge that Russian casualties (killed and wounded) were so immense in the first seven months of the war that Russia needed hundreds of thousands of new troops to stabilize the front.

Advertisement

That said, I think Putin and his military and security elites—known collectively as the siloviki—still do not believe that Russia has lost the war. They hope to outlast Ukraine and the West by mobilizing more troops, inflicting enormous suffering during the winter on the Ukrainian population by targeting civilian infrastructure, and waiting for collective Western support for Ukraine to splinter and fall apart.

Anderson: You have pointed out the Russian economy stagnated even before the sanctions imposed in 2022. What are the biggest economic problems Russia and Russians face today and in the coming years?

Taylor: The biggest economic problem that Russia and Russians face today is, of course, the war. Instead of an expected growth of around 4% for 2022-2023, Russia’s economy is expected to decline by 8% over those two years. Sanctions have hit production in key sectors very hard, and the effects will continue to mount. The government is shifting to a wartime economy, which means even more state control and military spending and less investment in human capital such as education and health care.

Hundreds of thousands of educated, young workers have left the country, and several hundred thousand more Russian citizens have been mobilized for war rather than productive pursuits—not to mention the roughly 100,000 casualties so far. Living standards will continue to fall, and an increase in wage arrears and unemployment seems inevitable as well. Longer term, the Western shift away from Russian oil and gas brought on by the war will undermine Russia’s most important economic sector.

The Russian economy has been underperforming for 15 years due to poor institutions—weak rule of law, poor protection of property rights, corruption—and consequentially relatively low domestic and foreign investment. Now due to the war, Russian economic prospects have gone from lackluster to dreadful.

Anderson: Russia has openly broadcast on TV that it is taking Ukrainian children to Russia, which many people consider kidnapping. Can you explain Russian boasting about what appears to be a violation of human rights and war crimes on a mass scale?

Advertisement

Taylor: I think these actions, although obviously deplorable, are perfectly consistent with Kremlin messaging about the war. In Putin’s own words, Russians and Ukrainians are “one people.” Putin cannot even imagine that Ukraine would choose to align with the West unless it was somehow tricked or coerced into doing so.

When he launched the February invasion, he asserted that Ukraine was ruled by a “neo-Nazi” government that was committing “genocide” against its own people. Thus, the Russian state portrays these kidnappings not as a war crime but as a benevolent act to rescue endangered children from an evil illegitimate government in Kyiv. It’s nonsense, of course, but that doesn’t mean the views are not seriously held by both Russian state officials and the Russian families who say they are “adopting” these children.

Anderson: One notices the use of Soviet flags and symbols by the Russian Army in Ukraine and still see statues of Lenin in Russia. Since Christianity is now supposed to be an important part of Russia’s identity, why does the government continue to promote Soviet symbols and Lenin?

Taylor: Putin’s Russia promotes a weird mishmash of symbols and identities. In his long speech justifying the February invasion, Putin bitterly denounced Lenin for creating the Soviet Republic of Ukraine, which he considers an artificial construction. Yet, as you note, in other settings and circumstances, Putin fully embraces Soviet history and symbols. I think the way to make sense of this is to understand Putin as someone who believes in the imperial Russian myth of 1,000 years of continuous Russian history. For him, pre-revolutionary Tsarist Russia, the Soviet Union, and post-Soviet Russia are all part of a single story of “historic Russia” and its rightful status as a Great Power.

Of course, Russia is not the only country that tells a story about itself that is at odds with a much more complicated historical reality. This war is a tragic reminder of the potential dangers when myths of imperial greatness serve as a guide to contemporary foreign policy.

Anderson: A Russian commentator raised an obvious contradiction in the rhetoric about Russians and Ukrainians being one people and post-Soviet peoples belong together, arguing if Russians would not surrender because they lost heat or electricity during the winter, why should anyone expect Ukrainians to do so. What do you think?

Taylor: I can’t but agree with the commentator you mention. I refer once again to Putin’s February 21 speech, in which he said about Ukrainians: “These are our comrades, those dearest to us . . . colleagues, friends . . . but also relatives, people bound by blood, by family ties.” Yet the actions of Russia for the last nine months shows that Putin sees no problem with the murder and torture of those he refers to as comrades, friends, and relatives.

Advertisement

It’s not surprising that Ukrainians see his statements as empty words and have become even more determined to hold on to their sovereignty and freedom in the face of Russian efforts to inflict immense suffering on civilians through these bombing campaigns against civilian infrastructure.

Anderson: The Institute of the Study of War said recently that Putin “continues to reject the idea of Ukrainian sovereignty in a way that is fundamentally incompatible with serious negotiations.” Do you agree?

Taylor: One hundred percent. Putin has made clear for many years that he does not think Ukraine is “even a state,” as he told George W. Bush in 2008. This war—which goes back to 2014, when Russia annexed Crimea—stems directly from Putin’s refusal to see Ukraine as a sovereign state with the freedom to make its own political and foreign policy decisions.

In his view, Ukraine must be in Russia’s “sphere of control,” as Fiona Hill and Angela Stent put it. Just two months ago, Putin forcibly asserted that he was annexing four regions of Ukraine that, according to international law and multiple agreements between Russia and Ukraine, are legitimately part of Ukraine. If Putin wanted to end the war, there is nothing stopping him from pulling Russian forces back to Russia’s legitimate international borders.



Source: Fox Business

Advertisement

Follow us on Google News to get the latest Updates

Advertisement
Advertisement

Trending