Four years after Russia's full-scale invasion of Ukraine, the Russian economy is showing clear signs of structural exhaustion. The contours of a genuine economic endgame are coming into view for Russia. This is the finding of a new Kiel Report published by the Kiel Institute for the World Economy and the Stockholm Institute of Transition Economics.
We’ve been hearing the same idiots saying “sanctions didn’t work immediately therefore they don’t work” since 2022. Those of us with higher than room temperature IQs realised that Russia planned for the war and sanctions to the tune of a $600 billion savings fund.
I still find it hilarious that Russia left about half of this in hostile countries that confiscated it immediately. Imagine Russia had that extra cash? They probably would have had a chance of winning this war without that blunder.
I never said that sanctions don’t work to hurt a country’s economy. That part is evident.
However, very few wars have been ended by sanctions alone. So in that sense, no, they do not work anywhere near as well as everyone thinks they do.
You would have a point if it was sanctions alone that Russia was facing.
It is fortunate in this case that Russia is also up against a well motivated Ukrainian army whose attacks have been increasing in sophistication as the war has progressed. Russia on the other hand has been on the back foot recently, they have appeared unable to adjust to Ukraine’s drone strikes on logistics behind the front lines and have had a net loss in square km gained the last 4 months in a row.
I wouldn’t say the Russian side is doing well, I completely agree with all of that.
But if someone has “hit their limits” like the article claims it means they can’t go on anymore. The fact that they can still ramp up attacks and aren’t losing ground massively means that hasn’t happened yet.
The war is at an impasse right now and I don’t think the next few months of the war are going to be very pretty…
When somebody “hits their limit” that means they are stagnating and not falling or collapsing. It is also important to be clear that this is about the economy.
If the Russian war economy would not be able to increase overall production(not necessarily production of specific weapons, but overall), you would expect them to slow down their advance and take higher losses, as the soldiers lack weapons and whatever to make that happen. We also we see fewer air attacks against Ukraine.
That seems to be the case. Russian personal casulties are generally pretty high and they are not taking a lot of land. At the same time Shahed attacks are 30% down in June compared to May.
Big losses would happen, if Russias economy collapses and only some time after that. That might be the case given the current fuel situation in the country.
Correction: the war economy. Important distinction because it is a specific type economy that has switched to mainly sustain a war at the cost of other expenses, and not a normal economy. If the war economy reaches its limits, so does the war effort.
Mostly because they have been proven ineffective, since Ukraine is shooting almost all of them down. It doesn’t prove anything about the economy.
Again, I’m not convinced Russia will soon be on its last leg, I want to be hopeful, but I’m not anymore at the moment.
Seeing is believing…