Russia struggles to balance economic stability and effective defense sector – ISW
Photo: glavcom.ua
The Russian Federation is currently grappling with significant economic and social issues due to the long-running war in Ukraine, global sanctions, rampant corruption, and labor shortages. These factors greatly hinder its ability to sustain military strength and ensure economic stability.
ISW reports that.
"Russia continues to face staggering costs required to maintain its war effort against Ukraine, with mounting economic strain, labor shortages, and systemic corruption threatening the sustainability of the Russian defense industrial base (DIB)," military experts stressed.
According to US Defense Secretary Lloyd Austin, Russia has already spent more than $200 billion on waging the war in Ukraine. Military losses have reached 700,000 killed and wounded, with recent average daily losses of 1,000 soldiers per day.
According to the Ukrainian Center for Countering Disinformation, as of December 2024:
- Liquid assets in the Russian National Welfare Fund have decreased from $140 billion (February 2022) to $53.8 billion (December 2024).
- The Russian Federation increasingly relies on reserves in Chinese yuan and the sale of gold to cover the budget deficit.
- Despite significant financial difficulties, Russia plans to spend a third of the national budget on defense needs from 2025 to 2027, which indicates the priority of military spending over economic stability.
In addition, corruption is also growing in Russia. According to Prosecutor General Igor Krasnov, the number of corruption crimes, including bribery, increased by 30% in 2024 compared to the previous year. More than 30,000 officials were disciplined.
According to ISW, corruption, labor shortages, and inefficiency in the defense industry are increasing economic pressure on Russia and undermining its ability to sustain the war against Ukraine. The Russian Federation's economic trajectory is unsustainable and poses risks to its medium- and long-term stability.
"Russia's mounting economic pressures stemming from the war, paired with widespread corruption, labor shortages, and inefficiencies in Russia's DIB, will likely compound the cost of Russia's war and further undermine its ability to sustain DIB operations while maintaining economic stability effectively.
ISW has previously observed reports of similar trends and statistics in the Russian economy, indicating that Russia's economic trajectory is unsustainable in the mid-to-long-term and will increasingly strain its capacity to wage war against Ukraine," ISW emphasized.
Analysts say these problems will only worsen over time, undermining Russia's ability to wage war and maintain internal stability.
Key ISW findings for December 9:
- The Kremlin continues to cautiously signal that it can ensure the security of Russian military bases in Syria in the short term but notably has expressed uncertainty about the long-term future of the military bases against the backdrop of the volatile and rapidly evolving political situation in Syria.
- Russia has removed some vessels from the Port of Tartus to a nearby area offshore.
- The Syrian Embassy in Moscow confirmed to Kremlin newswire TASS on December 9 that former Syrian President Bashar al Assad is in Moscow.
- Russia continues to face staggering costs required to maintain its war effort against Ukraine, with mounting economic strain, labor shortages, and systemic corruption threatening the sustainability of the Russian defense industrial base (DIB).
- Russian President Vladimir Putin promoted Chechen Akhmat Spetsnaz Commander Apty Alaudinov and Russian Deputy Defense Minister Yunus-Bek Yevkurov amid ongoing Kremlin efforts to shift blame for Russia's inadequate response to Ukraine's incursion into Kursk Oblast onto local government officials and away from the military.
- The Russian government claimed to have returned the bodies of deceased Ukrainian prisoners of war (POWs) who were allegedly killed in the January 24 Russian Il-76 military transport aircraft crash in the Belgorod region.
- Russian forces recently advanced near Pokrovsk and Velyka Novosilka.
- Russian President Vladimir Putin continues to highlight Russian officials who sponsor Russian volunteer units in Ukraine and the "Time of Heroes program," which places veterans of the war in Ukraine in leadership positions within the Russian federal and regional governments.
