11. Jan 2024

Russia’s Economy is Walking on Eggshells

Even Kremlin mouthpieces can’t conceal grim reality: Russia’s war of aggression takes a toll on ordinary Russians, writes Julia Davis in her Daily Beast article.

Russian government officials and state media have long claimed that Western sanctions have no real impact on the country’s economy and may even contribute to its development. However, recent developments tell a different story. Despite assertions of a thriving military-industrial complex, everyday life for Russians is becoming increasingly challenging.

Last year’s New Year’s show reflected optimism, with hosts predicting victory in Ukraine and boasting about Russia’s resilience against Western efforts to undermine it. This year, the tone has shifted. President Putin and state propagandists maintain that the invasion of Ukraine will persist until Moscow’s goals are met, meaning no relief from sanctions for the Russian people.

The Russian economy’s apparent stability is fueled by trillions of rubles injected from the National Welfare Fund (NWF). However, half of this reserve has already been spent since the invasion began, and analysts doubt the remaining $52 billion will be enough to handle another crisis.

The Russian ruble has experienced its sharpest decline since 2015, ranking among the three weakest currencies of developing countries tracked by Bloomberg. A “demographic catastrophe” is exacerbated by migration and a natural population decline. The frequent police raids rounding up migrants for military mobilization have also deterred them from working and living in Russia.

In 2023, therapists reported an increase in stress and financial worries, especially among the poorest Russians. Rising egg prices before the holidays, along with shortages of chicken, causing a public outcry. Putin had to apologize for the situation during his televised event, even as state TV propagandists described it as “shocking.”

Sanctions are blamed for the economic challenges, with experts suggesting alternatives to expensive items like eggs. Russian officials accused the Federal State Statistics Service of manipulating data to downplay rising prices, as official statistics reveal significant increases in basic food prices.

Polls indicate that two-thirds of Russians are unhappy with the rising prices, and over 50 percent hope for an end to the ongoing aggression against Ukraine. However, with Putin’s firm control, the suffering of the Russian people appears secondary to his geopolitical ambitions. Despite the challenges ahead for Ukraine and global allies, Russia is not escaping the economic and demographic consequences of its actions.

In 2023, Russia managed to secure control over a mere 0.01% of Ukraine’s territory, paying a heavy toll with the loss of over 245,000 men.

 The used images are screenshots from the referenced pages.

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