Based on the words of the Russian leadership and the actions of local officials, the country has entered a new stage of confrontation with the West and now has to prepare for looming war. Speaking, on November 22, at a meeting of defense ministry leaders and the heads of defense-sector firms, President Vladimir Putin focused on the theme of “mobilization preparations.” Notably, he declared that one of the main goals of the Zapad 2017 military exercises (September 14–20), which provoked a sharp negative reaction from member states of the North Atlantic Treaty Organization (NATO), was to check “our mobilization readiness and ability to use local resources to meet troop requirements. Reservists were called up for this exercise, and we also tested the ability of civilian companies to transfer their vehicles and equipment to the armed forces and provide technical protection to transport communications” (Kremlin.ru, November 22).
Until recently, Moscow repeatedly argued that the scale of Zapad 2017 was restricted to participation of only 12,700 Russian troops. Nothing was ever officially mentioned about practicing mass mobilization of reservists; this aspect only featured occasionally, in fragmentary reports. Local press reported, in particular, about mobilization being done in complete secrecy in the Kaliningrad region—reservists had to sign a non-disclosure agreement (Novyi Kaliningrad, August 30; see EDM, September 18). Some hazy reporting on “mobilization actions” in Kursk region also appeared (Seim, August 18). The call-up of reservists was supposed to replace the need for transferring troops from elsewhere in the country. However, while addressing the defense ministry, Putin noted that these mobilization activities during the Zapad exercise were unsuccessful and will need to be corrected (Kremlin.ru, November 22).
A bit later in his speech, Putin made a second notable announcement: “I want to say that the economic ability to increase the production of defense products and services quickly is a vital element of military security. All strategic and simply large companies, regardless of the type of ownership, must be able to do this” (Kremlin.ru, November 22). Such a policy would imply the government intends to return to the Stalinist-era model of a mobilization economy. In accordance with Joseph Stalin’s industrialization plans, every enterprise producing civilian goods—even pasta or baby toys—had to switch to military production quickly during a prewar period.
That mobilization concept allowed the Soviet Union to dramatically raise military production during World War II. But the same concept ultimately played a crucial role in the collapse of the Soviet economy in the 1980s. “Civil” enterprises were forced to create and maintain parallel redundant production lines and hire excessive workforces. Moreover, industry had to unify all main components to suit both military and civilian production. Huge reserves of strategic materials had to be kept stockpiled for industry during wartime. All this created massive imbalances in the economy, and the cost of military production was included in the price of already-produced civilian goods. One of the most important functions of the Gosplan (the Soviet state planning commission) was to artificially balance prices to achieve some semblance of profitability, burdened by the “mobilization task.” As a result, in the period before the collapse of the Soviet Union, industry regularly produced thousands of tanks, aircraft and missiles, but the government could no longer pay for these weapons (see EDM, September 29, 2016).
This system was doomed to collapse with the introduction of a market economy. Private owners could not pay for the maintenance of mobilization capacities. A complex chain of sub-contractors also collapsed. Since military production was unprofitable, many defense contractors created specialized enterprises. Consequently, 5–7 years ago, the government planned to abandon the old mobilization plans. In 2012, the federal tax service estimated that annually Russia lost several hundred billion rubles due financial machinations connected to mandated mobilization preparation (Izvestia, July 30, 2012). The country was to move to more sober and modern standards, reducing the burden on private enterprises. But today, the rhetoric has turned 180 degrees, argued the head of the Gaidar Institute’s military economy laboratory, Vasily Zatsepin (Novaya Gazeta, November 29. Another well-known economist, Vladislav Inozemtsev, asserts, in a piece for RBC, that the Kremlin is preoccupied with propaganda goals and not with real intentions to put all Russian industry on military alert (RBC, November 28).
Nonetheless, there is every reason to believe that the Kremlin is seriously prepared to place the country on a war footing. Since everything related to mobilization programs is secret, the public receives only fragmentary information—such as the leaked letter from the Krasnoyarsk region Ministry of Education, outlining educational instruction priorities during wartime (Newsru.com, November 27). Moreover, turning the country into a besieged fortress will create the necessary background for the re-election of President Putin. It is also clear that convincing everyone Russia is preparing for war is seen as an important element of military deterrence against the United States.
At the same time, the domestic defense industry arguably cannot cope with the tasks set by the Kremlin. The defense industry is evidently experiencing difficulties with the mass production of weapons (Jamestown.org, June 27, 2016). In attempting to realize these tasks, the authorities risk further damaging the Russian economy. To achieve its goals, in the first phase, the government will likely resort to “administrative” methods: using threats of criminal punishment to try to force businesses to produce military products. But participation in military production does not bring profits. And because of US sanctions, the participation in military production could destroy the civilian part of the business. Thus, if threats fail to increase military production, the Russian government might try to nationalize the industry—which could easily spiral into general autarky and systemic shortages, including of food.
The idea of mobilizing industry contradicts Putin’s remarks a month ago, when he declared that the government would be moving away from a conscript army. After all, if the number of reservists is to be significantly reduced, such large-scale serial production of military equipment makes little sense. The most likely conclusion from these contradictory statements is that there is a fierce, behind-the-scenes struggle within the Russian government over whether or not to adopt all key aspects of the mass-mobilization model of defense. Today, it is still unclear which side will win.