Russia on the brink: economic and social crisis loom as war nears end
As the war draws to a close, Russia faces the threat of an impending catastrophe. President Vladimir Putin is acutely aware of what lies ahead. The ongoing conflict has been the sole factor keeping the Russian economy afloat. Without it, the nation’s defense industry could collapse, triggering a recession, a surge in crime, and a burst of social unrest within the Kremlin’s walls.
Ceasing hostilities with Ukraine might herald not peace, but the fragmentation of Russia. The economy faces a downturn, millions of disgruntled war veterans would return home, and the war machine that the Kremlin has sustained for years would demand even more resources. Peace could spell disaster for a regime ensnared by its own reckless adventures.
According to an analysis by German outlet Bild, ending military actions could unleash profound internal challenges for Russia. The nation’s economy has become increasingly dependent on military expenditure, with hundreds of thousands of Russians deriving their incomes from the war effort. Ending the conflict might trigger an economic downturn and social upheaval.
The signs of a weakening Russian economy are evident. Beyond the defense industry, there’s a marked decline in the production of food, coal, construction materials, metal products, and machinery. The defense sector, fueled by government investment, obscures the actual economic downturn. Yet in sectors like food, coal, and machinery, production is faltering. Only the military industry masks the decline.
Post-conflict, Russia would face challenges in reintegrating veterans. Many veterans, previously receiving high compensation for their roles in the conflict, will return to impoverished regions where only low-paying jobs await. If Putin fails to ensure their loyalty through viable economic prospects, a surge in violence could ensue. The rate of violent crime has escalated since the onset of the war. There's a real danger that some veterans, akin to those returning from Afghanistan and Chechnya, might resort to crime.
Ending the war without achieving its stated goals might undermine the government’s legitimacy. Internal challenges like economic decline and social discontent could pave the way for political instability. Russia finds itself trapped by its own aggression. While ending the war threatens economic and social crisis, continuing it risks resource depletion and international isolation. The Kremlin is caught between two unfavorable scenarios, each presenting significant risks for the future of the country.