Ordinary Russians Can No Longer Ignore the War

Executive Summary:

• Independent experts and Russian officials agree that the economy is stagnating. Some analysts suggest that this will not lead to an end to the war, but rather to the final restructuring of the economy to a state of complete war readiness.
• Such a scenario will inevitably lead to further degradation of the private sector and inflationary growth. Ukrainian drone attacks are also harming the work of Russian enterprises, which affects societal well-being.
• Economic difficulties and increased drone attacks, coupled with new bans and restrictions, will be a significant blow to normal life in Russia and will make it impossible to ignore the effects of Russia’s war against Ukraine.

In June, Maksim Reshetnikov, the head of the Russian Ministry of Economic Development, openly admitted for the first time that the Russian economy is teetering on the edge of recession (The Moscow Times, June 19). Even pro-Kremlin media channels have reported that this fall, massive staff reductions are expected. According to a recent poll from Rabota.ru (работа.ру) and SberPodbor (СберПодбор) reported by Russian news outlet Izvestiya, 12 percent of companies plan to reduce their staff, with the main reason cited being a decrease in consumer demand (Izvestiya, September 11).

Russian opposition leader Mikhail Khodorkovsky thinks that Russian President Vladimir Putin may be ready to suspend the war because he has sensed the limits of his economy (YouTube/@khodorkovskyru, September 11). Economic observer Tatyana Rybakova, however, suggests that in response to the approaching stagnation, the Russian government will pour even more money into the war sector. Such investments are likely to stimulate inflation, despite the high interest rate set by the Central Bank (Most.Media.org, September 7). The consequences of such a policy, in Rybakova’s opinion, will be the final decline of the private sector, an even greater outflow of personnel to military production, and a reduction in salaries. Simply put, the economy will finally be placed on a complete war footing, which will have a noticeable impact on the well-being of citizens (Most.Media.org, September 7).

For now, Rybakova’s assessment seems to be close to reality. Having spoken with marketers, independent journalists with Important Stories discovered that the government spares no expense in placing military contract advertisements at the top of search engines, including not only Yandex, but also Google (Important Stories, September 3). New expenditures, though, will hardly be able to resolve deeper economic deficiencies.

The ever more intensive Ukrainian drone attacks on Russian petroleum refineries and other industrial enterprises also affect Russia’s economic situation. The exact scale of damage inflicted on Moscow on this front is impossible to fully calculate. In August, however, the median level of downtime for primary oil refining capacity was only 6.4 million tons, which is approximately 20 percent of the total possible volume. Analysts with Re-Russia note that both Ukrainian attacks and the normal fluctuations in the Russian fuel market during this period influenced the situation. If the attacks continue, however, their effect will become cumulative (Re-Russia.net, September 8).

Even pro-Kremlin military experts recognize that over the last few months, “up to 15–26 percent of Russian refining capabilities were attacked” (Top War, September 1). Some analysts loyal to the Kremlin attempt to minimize the results of the attacks, but even then, they admit that “it is too early to speak of any kind of victory,” and in Russia, “there are not so many” petroleum refineries (Top War, September 4).

For now, ordinary Russians are only feeling the effects of the strikes on the petroleum infrastructure in the form of higher gas prices. The Ukrainian attacks that have forced airport closures in the middle of the holiday season, however, are of far greater concern to ordinary people. According to a summer poll by the Levada Center, 76 percent of respondents said they were concerned about airport closures and flight delays due to Ukrainian drone attacks (Levada Center, August 5).

Internet limitations constitute yet another sphere where Russians clearly feel restrictions. It is now impossible to make calls via the messaging apps WhatsApp and Telegram in Russia, and mobile Internet outages occur with increasing frequency in regions further from Moscow (RBC, August 18). In early September, the government posted a “white list” of Internet sites permitted to Russians, which included all government sites, the Central Election Commission’s electronic voting portal, Yandex services, and pro-government social networks Vkontakte and Odnoklassniki (The Moscow Times, September 5). Some experts predict that over the next couple of years, the “white list” will morph from a pilot project into the default regime solution against any threat and would completely replace the rest of the Internet. All foreign services—including Google Cloud, Amazon, and others—will be banned in this scenario, and virtual private networks (VPN) will be essentially criminalized, available only with special permission (Most.Media.org, September 9).

Kremlin propaganda is carefully preparing the grounds for this by, for example, confirming that WhatsApp and Telegram are used by Ukrainian intelligence services to recruit Russians (Tsargrad.ru, August 23). For now, Putin’s press secretary, Dmitry Peskov, assures Russians that both messenger services should remain in Russia (Tsargrad.ru, September 5). It is incredibly naive to trust any Kremlin statements, however. While most Russians patiently endure restrictions and difficulties, ordinary Russians will no longer be able to live their lives without being aware of the war.