RUSSIA ‘STUCK’ IN A WAR ECONOMY?
The Analyst
There is growing concern that Putin has now leveraged so much power and control over the state and its people that oppression is now at a level there is no way for the people to get out from under it, even if they wanted to. The means of organising and disseminating information are state controlled or can be shut off without warning. The slightest complaint receives the highest level of punishment. Nobody gets far enough to create a snowball effect that becomes irresistible.
Yet official polling shows growing discontent over the war. Hard fought rights to own property and businesses are being swept away. The state nationalises any business it wants without compensation, fortunes are being taken away without due process or fairness.
But the biggest problem is the scale of the conversion to war production.
Russian manufacturing industries were never especially vast. But they were reasonably  efficient and profitable and privately owned or entwined with western partners and economies.
All of that has gone. The state has taken over. And the problem is, it has no way of easily reversing what it has done and continues to do.
Indeed the costs and difficulties of reversing it have been analysed in the west, and the warning signs are that it would be so huge a disruption and so drastic an economic shift that, even without sanctions of any kind, preventing a jolting and destructive economic downturn would be near impossible. The dangers to Putins rule would then rapidly multiply. Russians don’t want another 1990’s decade of rampant economic dislocations and poverty, yet without massive infusions of cash and a sudden resurgence in the price of Russian gas and oil sales - both of which seem unlikely in the extreme to recover their pre-war levels, there’s no way around it.
Putin faces rising inflation from an overheating war economy that still is nowhere near beating Ukraine. Defence consumes officially, 35% of the state budget but in reality is coupled to security forces expenses it’s nearly 55%. Even that is still only one quarter of the US Defence budget.
It’s one of the reasons they are so incensed by the $61 billion for Ukraine - added to what Europe provides Ukraine has a military budget around 75% of Russia’s. It’s economic odds that simply don’t play out well.  Putins biggest problem is that production is pretty much at peak. They have more shells than they can fire, (limited only by a huge reduction in artillery through losses), as many drones as they need and glide bombs in quantities that are deeply worrying.  Buy they still can’t win the war. And if they don’t and it ends in anything less than a victory or something they can pass off as one, what then? If Putin doesn’t have a resounding victory and then has to plunge the economy into recession his days are numbered.
And that says he won’t. If he doesn’t win in Ukraine he’ll find someone else to fall upon - Georgia, Kazakhstan, any of the former soviet states of the dead empire. A constant state of war means permanent stability from his viewpoint. And that doesn’t bode well   for peace anywhere within reach of Russian borders. Putin has put himself in a place he cannot escape from. It was never meant to be like this. But it is and he’s set his course. Will anyone risk stopping him inside Russia?
@ukrainejournal