Expert Declares the Russian Economy is a Dumpster Fire, but the Kremlin Still Clings to Victory Hopes in Ukraine: Despite the sanctions imposed on Russia, following its unprovoked invasion of Ukraine in February, the ruble has actually recovered – hitting 52.3 to the dollar on Wednesday, an increase of roughly 1.3 percent on the previous day and the strongest level since May 2015. In fact, the ruble has actually gotten so strong that Russia’s central bank has been taking measures to weaken it over fears that it will make their exports less competitive.
It was just last week that Russian Federation President Vladimir Putin said that his country’s economy would overcome the “reckless and insane” sanctions and that the efforts to damage the Russian economy “didn’t work.”
“Russian enterprises and government authorities worked in a composed and professional manner,” Putin said during his address at the St. Petersburg International Economic Forum. “We’re normalizing the economic situation. We stabilized the financial markets, the banking system, the trade system.”
However, Russia’s projected annual rate of inflation remains at 16.7 percent, and the war in Ukraine won’t make the situation better – certainly not in the short term.
The Russian Economy Has Serious Problems
“The Russian economy is a massive dumpster fire. Sanctions are going to aggravate problems in their economy that they were already having. Russians don’t have babies anymore, and their life expectancy is terrible,” Harry Kazianis, president of the Rogue States Project, told Fox Business’ Neil Cavuto on Wednesday.
“Over the long term Russia is a declining power,” Kazianis continued. “Short to medium term it looks OK, but long term is bad.”
Russia’s birthrate has largely declined for decades. The country, which suffered massive casualties during the Second World War, has the lowest overall male-to-female ratio in the world, and that is especially true among the elderly. The latest war in Ukraine certainly won’t “repair” that pyramid, and could impact the number of births and Russia’s rate of population growth.
The fact that the war in Ukraine essentially has no end in sight will only worsen the economic situation for Russia. Ukrainian officials have contended the war won’t end until the last Russian is driven from its soil, but even with Western aid that is a lofty goal.
Yet, Russia has also been forced to scale back its objectives.
How the Ukraine War Could End
When asked how the war ends, Kazianis was blunt, suggesting it is possible that neither side agrees that the conflict ended, and described it as a “Korean War sort of ending,” adding that there may be “some sort of armistice.”
Putin’s forces will focus on the Donbas region, as taking the entirety of Ukraine is now seen as impossible.
“If he tried to do that it could be the end of his regime,” Kazianis explained. “He’ll double down on Donbas, try to take that part of the country over and essentially declare the war over or his special military operation is over, and then dare the Ukrainians to keep fighting.”
The Ukrainians may be forced to accept that settlement.
“One they may have to de facto recognize, and that means Vladimir Putin conquerors the industrial heartland of Ukraine, and it will be a very sad ending,” Kazianis continued. “No matter how much arms we give the Ukrainians, and how much money we give the Ukrainians.”
In other words, this will be a war that both sides could lose. Ukraine will be forced to give up territory; while instead of restoring the “glory” of the former Soviet Union, the conflict will simply show the world that Russia is a nation slowly becoming irrelevant on the world stage. It is a war that has destroyed much of Ukraine, and one that will leave Russia’s economy in utter tatters.
Now a Senior Editor for 1945, Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military hardware, firearms history, cybersecurity and international affairs. Peter is also a Contributing Writer for Forbes.