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Putin is feeling increasingly uncertain as the Russian populace continues to sink under the growing economic pressure caused by the Russia-Ukraine war, military historian Jüri Kotšinev writes.
Due to the war, Putin is forced to increase his country's defense spending while simultaneously reducing social services for his citizens. Despite the great hopes instilled in Russians by propagandists about an impending breakthrough on the eastern front in Ukraine, fierce battles continue there with the same intensity as before. Even now, as Russian forces have taken control of the city of Vuhledar, the collapse of the front remains as distant as it was before the fall of Vuhledar.
The tensions in Russia, arising from the war in Ukraine, are clearly reflected in Kremlin decisions regarding the economy. The Russian Central Bank has raised deposit interest rates to 19 percent. This results from Western sanctions and a labor shortage in the Russian labor market. Moscow has announced that defense spending will increase by a quarter in 2025. Putin fears a collapse similar to the one that ended the USSR.
On the front in Ukraine, an average of 1,200 Russian fighters are dying each day. Consequently, there is an ever-decreasing labor force in Russia. Defense spending now constitutes 32 percent of the entire national budget, a figure comparable to the Soviet era when the union was at war with Afghanistan. At the same time, expenditures for pensions, healthcare, and other social services are being cut. As a result, public dissatisfaction in Russia is rising steadily. The burden of the war, however, falls on the very same populace.
The war against Ukraine has plunged Russia into a state of continuous economic instability. As the Kremlin continues to increase funding for war efforts, the budget deficit in the Russian Federation is expected to grow even more in 2025 than in this year. Putin continues to prioritize funding for military efforts at the expense of social stability, which could ultimately lead Russia to a situation similar to that of the USSR in its final days, which ended in economic collapse before its disintegration. As the outlook for the Russian economy grows darker and no end to the war is in sight, the question increasingly arises whether Putin's policies will lead Russia to the same fate the USSR ultimately faced.
The shadow of the USSR's collapse already looms over the Kremlin. In 2025, Russia's military expenditures will rise to 13.5 trillion rubles (approximately 110.5 billion pounds). This amount is more than twice the sum allocated to meet the social needs of the Russian people. These are harsh numbers that cannot be manipulated by Putin's will, plans, or intentions. These are numbers that even a dictator like Putin, enclosed in his bubble of power, must reckon with. Numbers cannot be ignored or convinced otherwise. Economic indicators and financial rules cannot be arrested or re-educated, nor can they be suppressed. While numbers and economic laws can be ignored, they cannot be directed by any wishes or fantasies.
Putin still hopes that the West will tire of supporting Ukraine and that the crumbling, broken Russian war machine will be able to use its relentless bombardment to wear down the Ukrainians and their allies to the point of capitulation to the Kremlin. This must not happen. Time works in favor of Ukraine and its allies. They must endure and allow Russia to drive its war economy into conditions of economic collapse. Ukraine must hold out, and Western countries must not tire of providing assistance in a war that will significantly determine the fate of the 21st century, not only in continental Europe but also elsewhere on this planet. Even Putin is paler from war fatigue than before.
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