Ukraine update: Meanwhile, in Russia … Putin’s war brings a ‘catastrophically’ failing economy

Ukraine update: Meanwhile, in Russia … Putin’s war brings a ‘catastrophically’ failing economy

Yesterday was Independence Day in Ukraine, which Russia appears to have celebrated mostly in the same way it has celebrated every day for months: with a reported 98 towns shelled, missiles falling in Ukrainian cities (including at least 65 civilian casualties at a train station in Chaplyne, 100 miles from the front), and with many, many failed attempts to capture Ukrainian towns and villages. Russian forces were forced to withdraw from attacks near Bairak, attacks near Donetsk, had to fall back from positions at Soledar and Bakhmuts’ke, gained absolutely no ground in an intense attack at Kodema, and continued to not take Pisky and Nevel’s’ke while suffering heavy losses. And all that is just the eastern part of the Donbas on a single day.

What Russia has accomplished in six months in Ukraine can be measured in terms of centimeters per day on the ground, but there are more important measures of its accomplishments. For one thing, Russia has utterly demolished the reputation of its own military, the regard for its military systems, and the degree to which anyone takes their threats seriously. Sure, people still listen because Vladimir Putin is known to have a basement full of moldering Soviet warheads, which we assume are still functional. But otherwise, any saber rattling from Moscow has begun to sound more like kids playing with the silverware. You’re going to do what? Really? When 85% of your utterly pathetic military is already tied up in Ukraine going nowhere? Sure you are.

Trying to peddle Russian military systems to other governments around the world could be right up there in the Crappiest Jobs of 2022 list. HIMARS and Javelins may have been sainted, but what Russian system comes out of this conflict still looking even remotely as fearsome as it did going in? Just check the low, low prices down at Farmer Ivan’s Tractor and Tank Emporium.

Russia has also achieved building an unparalleled alliance in the West. Despite predictions that Russian actions would splinter NATO and damage the U part of the EU, the opposite happened. Western nations have ratcheted the sanctions against Russia ever upward, to the point where “how can we tighten the screws today?” seems to be a favorite game from Brussels to Washington. Media sources may have instruments sensitive to pick up the moaning of the—mostly out of office—politicians still fretting over confronting Putin. The rest have moved on to freeing Europe of any dependence on Russia’s fossil fuel pipelines and corrupt banking system.

Put simply, Russia went into this fight claiming that it was motivated by fear of a NATO member on its border. Now NATO has two more members. And Russia’s hold over Europe is infinitely weaker than it was six months ago.

Many national media organizations seem to have lost interest in the illegal, unprovoked invasion of Ukraine the moment it looked like Putin wouldn’t be getting his parade through Kyiv. They also left off coverage of the Russian economy by talking about how well Moscow was weathering the storm. Just look at the price of the ruble!

But last month, a study from Yale University took a look at the difference between the media perception and how things are really going for Russia on the economic front and how effective sanctions have been.

Defeatist headlines arguing that Russia’s economy has bounced back are simply not factual – the facts are that, by any metric and on any level, the Russian economy is reeling, and now is not the time to step on the brakes.

The full report is so satisfyingly bleak for the people who started this bloody war that reading it is a dark pleasure. But for those not so inclined, here are the high points:

  • The Kremlin is “cherry picking” economic statistics and pushing them to the worldwide press in an effort to paper over an economy in collapse. Putin is engaged in “patently unsustainable, dramatic fiscal and monetary intervention,” pumping out the last of Russia’s cash reserves in an effort to make things seem less dire to casual observers.
  • Russia is “pivoting to Asia” on natural gas sales because it has no choice. The countries they are dealing with know they have Russia over a barrel and can demand well below market pricing.
  • Foreign companies leaving Russia represent a staggering 40% of its GDP. In six months, Putin has erased three decades of foreign investment and improvements in Russia.
  • Russia is bleeding population; specifically those educated and talented individuals who have skills valuable elsewhere, along with those experienced in working with international companies.
  • The idea that Russia can create a self-sufficient economy is proving laughable, and crucial components are in increasingly short supply.
  • The lack of imports, loss of skilled population, and backwards domestic industry is “hollowing out” Russia’s economy and making it impossible for them to innovate their way out of the crisis.
  • Russian domestic financial markets are now the “worst performing markets in the entire world “ and a powerful indicator that the Russian economy is contracting at a rate little short of freefall.
  • The net result: soaring prices for necessary goods and growing consumer unrest.

While Putin opening the taps on Russia’s last reserves of foreign capital allowed him to claim an only 4% economic drop in the last report, the details of recently published figures for Russia’s domestic production are more telling. In June, Russia’s production of fiber optics cable was down 80%. Automobile production was down 89%. Domestic goods like refrigerators and other appliances were down by over half. Supply chains that fell apart under sanctions are not getting repaired.

Russians are facing a winter ahead like they haven’t seen since the privations of World War II. And it’s coming not because they are fending off an assault from the largest army in the world, but because Fearless Leader decided to take an utterly unnecessary swing at a much smaller neighbor.

Putin hasn’t just screwed up, he’s screwed his country in a way that’s already becoming readily apparent to everyone hunting for French fries at the “Tasty and That’s It” replacement for McDonald’s or decent cuppa at Stars Coffee. Russians have a lot of experience at belt-tightening. They’re tightening now.

However, as Reuters reports, Putin appears to have taken the first steps on what might be considered the ultimate Russian domestic jobs program. On Wednesday, Putin signed a decree increasing the official size of the Russian army by over 100,000 members to 2.04 million. Which is about a 1.1 million more than the actual headcount in the Russian army. 

Like the efforts to make the economy look better, this order may be nothing more than Putin trying to make the Russian army look bigger by changing a number on paper. If he actually intends to fill 1 million empty slots, exactly who is going to lace on those bring-your-own boots isn’t clear. Recent Russian recruitment drives have netted only a small fraction of the new cannon fodder recruits desired, even using some pretty drastic incentives. That has led to speculation that Putin’s signature on the Make Army Bigger decree is step one in the long-anticipated general mobilization—a nationwide draft to fill those army ranks.

Maybe. But signing up another million men to fight in a conflict that’s already stretched five months and 27 days longer than anticipated, and which has already taken 45,000 Russian lives, might not be the most popular move. Especially for a guy who has already taken his nation back well over the brink of ruin.

But maybe all those new recruits will get coupons for free fries at Tasty and That’s It … when they get some fries.

A fascinating thread on the fate of Russia’s 4th Guards Tank Division, and how their most advanced tank ended up starring in a parade through Kyiv.

Some might describe this as part of ‘The Death Ride of the 4th Guards Tank Division’, mainly its 13th Tank Regt. But it’s actually more pathetic than that. A large proportion of losses were breakdowns, run-drys, or abandonment in mud. The 13th lost at least 47 of its 94 tanks🧵👇

— Dan (@Danspiun) August 25, 2022

Thursday, Aug 25, 2022 · 3:15:17 PM +00:00 · Mark Sumner

The last remaining high capacity power line leading to the Zaporizhzhia Nuclear Power Planet at Enerhodar has now been damaged. For the first time, power from the plant has been cut off from the grid.

Russia has threatened to cut off the plant several times, but it’s not clear whether this was a deliberate act of an accident. In recent weeks, Russia has reportedly fired artillery from the area “at nearby targets” several times, even though the nearest Ukrainian forces are on the other side of the Dnipro River and not threatening the plant.

Thursday, Aug 25, 2022 · 3:44:14 PM +00:00 · Mark Sumner

Unlike many recent explosions a hundred kilometers or more inside Russian-occupied territory, this strike into Horlivka in Donetsk oblast is less than 10km from the front lines and might easily be the result of conventional artillery. Russian forces have been claiming that they’ve occupied Zaitsev, 11km northwest of Horlivka, but geoconfirmed imagery shows this is not currently true.

Завод “#Стирол” в Горловке сейчас#Горловка

— Типичный Донецк (@typicaldonetsk) August 25, 2022

Thursday, Aug 25, 2022 · 3:49:39 PM +00:00 · Mark Sumner

We’ll have to see what this “recruitment” looks like. Nothing looks more miserable than being in the Russian military, and no one is more clear on this than Russians.

BREAKING: Vladimir Putin announces plans to recruit 137,000 more troops to the Russian army

— Samuel Ramani (@SamRamani2) August 25, 2022

Thursday, Aug 25, 2022 · 4:46:26 PM +00:00 · Mark Sumner

Another monument to the Red Army goes down. I’d kind of like to have a ragged chunk of one of these. It would look good on a shelf next to the snapped off tip of Jefferson Davis’ nose (no, I don’t really have that).

Latvia said goodbye to the Soviet Union today. The time for full decommunization across Central Eastern Europe has finally come.

— Visegrád 24 (@visegrad24) August 25, 2022

Click here to donate to help those escaping Putin’s illegal invasion of Ukraine.

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