Putin's War on Ukraine - Into Year Three
What was the Goal? What was the Cost? What has Been Achieved to Date?
Dear BWR Subscribers,
“Barbershop Whispers….Russia” begins with “My Takeaways” on the main topic, followed by the main topic discussion. The last two sections of “Barbershop Whispers…Russia” are “Follow-ups” regarding previous publications and “Quick Bites” briefly addressing emerging events.
In last week’s BWR, I discussed the murder of Alexei Navalny, the founder of the only effective grassroots opposition movement during Putin’s 24-year reign and probably Putin’s most feared critic. What happened and why?
In this week’s BWR, as we move into the third year of Putin’s unprovoked war against Ukraine, I will summarize the cost of Putin’s war on Russia. What did Putin expect to achieve through the second invasion, and what was the cost? What did he achieve?
Takeaways:
Takeaways:
RETURN ON INVESTMENT (ROI): The cost of the war greatly outweighs any real and reasonable return on the investment of blood and treasure. In fact, the ROI is negative. Loss of valuable human capital to the West, exclusion from the global mainstream economy, and growing dependence on China.
ACHIEVEMENT(S): Putin’s only achievement has been to remain in power, and this appears to be uncertain. The Kremlin’s broken social contract with the populace is beginning to show signs of frustration and fatigue. For example, spontaneous protests by the “White Scarves” women protesting the mobilization, without rotation, of their men to the front.
What was Putin’s Goal?
Only Vladimir Putin truly knows what he set out to achieve in his second unprovoked invasion of Ukraine two years ago. However, there is evidence that one key goal was to replace the Western-leaning Zelensky government with a Kremlin-friendly one. He expected this to be completed without complications within two weeks, yet we are now entering year three. Pointing to this two-week timeline was the discovery of military parade uniforms in the backpacks of several Russian soldiers captured or killed in the first days of the war. Parade uniforms are not standard packs for a war zone.
As I wrote in the BWR 28 January 2024 issue, Putin lost the war in the first month of the invasion. He lost the war for many reasons, beginning with the flawed intelligence provided to him by the Federal Security Service (FSB) that Ukrainians would welcome the arrival of Russian soldiers and pro-Russian cells within the Ukrainian security services, and the military would assist in removing the Zelensky government. Putin did not anticipate Ukrainians’ collective desire and demand for independence and agency. The Ukrainian choice to align with rules-based economies that represent nearly 45% of global GDP or with a declining, unreformed land empire representing 2.5% of global GDP was front and center in 2014 on Maidan, and the decision was confirmed by Ukrainian resistance to Putin’s second invasion in February 2022.
The War Cost
Treasure and Blood
The Kremlin has also expensed massive treasure and blood for the war effort. Newsweek estimates Russia spends up to $900M daily on the war, representing nearly 12% of Russian GDP. US intelligence estimates 315,000 troops have been killed or wounded in the second invasion. This number represents almost 87% of the original pre-second invasion force. The economic and social cost of caring for the wounded soldiers as they return to civilian life will add another several billion dollars to the price of the war. The Russian war casualties are already significantly higher than what the Soviet Union, with a population of 290M, experienced in Afghanistan, approximately 15,000 killed in action.
The blood and treasure expenses are beginning to weigh on the general public. Once-sporadic demonstrations by women whose loved ones are on the front lines without rotation are happening more regularly. Civil infrastructure, such as heating, is also beginning to fail regularly. This is a violation of the unwritten social contract Putin has with the Russian populace – ‘Stay out of politics, and I will improve your standard of living.’
Flight of Human Capital
In addition to the 315,000 causalities, and as articulated in BWR's 10 September 2023 issue, the war has resulted in more than 1.2M Russians leaving the country in pursuit of safety from military mobilization as well as a stable environment where they can build a future for themselves and their children. These highly skilled working-age entrepreneurs, technology specialists, and academia have emigrated to the EU, UK, Georgia, UAE, Turkey, even as far as the US. The longer they reside in their adopted countries, the more they establish themselves, the less likely they will return to Russia. This comes at a significant cost to Russia's global competitiveness today and for many decades to come.
Weakened Military Global Standing
Before the second invasion, the Russian armed services were considered to be second only to the US in terms of capabilities. The poor performance, evidenced by high casualties and 16 generals killed at the front lines, has impacted their global reputation. The poor performance of Russian weapons has also impacted arms export orders, and moreover, what export orders there are, are backed up by years and are not being fulfilled, as the military-industrial complex operates at full capacity to supply the front lines.
Weakened Global Influence
Putin’s war has and will continue to weaken Russia’s political and economic influence on the world stage. This is evidenced by Russia’s growing economic dependence on China, the UAE, India, and Turkey. This dependence ranges from new export markets for energy to export-related support services such as insurance for Russia’s expanding shadow tanker fleet.
Germany’s historic industrial dependence on cheap Russian natural gas was mirrored by Russian dependence on Germany as a reliable customer. This mutual dependence, established over decades, attracted billions of euros in infrastructure investment – Nord Stream 1 and 2 – to distribute Russian energy to Europe. A similarly robust infrastructure for the new Asian markets does not exist and will take at least a decade to build. For example, the Power of Siberia 1 and 2 are designed to supply energy to China; however, who will finance Power of Siberia 2?
The war also mobilized and united NATO, the EU, and Ukrainians. Despite former US President Trump’s anti-NATO rhetoric and the January 6 US insurrection, the West has unified and stepped up to Putin’s challenge by supporting Ukraine with money and matériel. However, the question now is how reliable is Western support for Ukraine in the event of a long, drawn-out war with Russia?
Russia today is the most sanctioned country in history.
Rebuild Annexed Territories
Including Crimea, the Kremlin now occupies approximately 18% of Ukrainian sovereign territory. Up to 80% of the cities in the Russian-occupied Ukraine, such as Mariupol, have been destroyed.
Rebuilding these cities will require hundreds of billions of dollars, and this cost only addresses the physical rebuilding of the cities.
The repopulation of these cities will also come at a significant cost. According to the Financial Times, only 100,000 of the original 350,000 inhabitants remain in Mariupol.
Return on Investment
From a purely economic return on investment (ROI), it is difficult to understand the value proposition of Putin’s war, given the cost of blood and treasure and the long-term impact this will have on Russia for generations to come. If the Putin regime were to end today and a new government was to take its place, it would take decades to rebuild economic ties with the West and remove sanctions.
The only plausible reason one can conclude as ‘justification’ for this action was Putin’s desperate and paranoid need to remain in power.
Follow-ups & Quick Bites:
Follow-ups:
Navalny’s Murder - Ludmila Navalny Demands to Her Son’s Body
Lyudmila Navalnaya, Alexei Navalny’s mother traveled to the Arctic Circle Russian penal colony to retrieve her son’s body.
After days of resistance, the Russian authorities finally released the body to her, but under conditions which is unclear. In a YouTube video, Navalnaya said:
“Last night, they secretly took me to the morgue, where they showed me Alexei…I am recording the video because they started threatening me…They are blackmailing me, setting conditions for where, when, and how Alexei should be buried. This is illegal”
The Kremlin fears Alexei Navalny as much in death as alive.
Transnistria Appeal to Join the Russian Federation
A Congress of Deputies will be held in the breakaway Moldovan province of Transnistria next week. The meeting comes amid rising tensions in the territory, which has led a quiet existence as a Soviet throwback since 1990, thanks in part to the presence of Russian peacekeepers, but now finds itself squeezed between a closed border with Ukraine and reforms in a Moldova striving for EU membership.
In 2006, 97% of Transnistrians voted in an unrecognized referendum for the territory to join the Russian Federation. Some analysts have speculated that, with Putin scheduled to address Russia’s Federal Assembly the day after the congress, that Transnistria could again appeal to join the Russian Federation. Ukrainian intelligence scoffs at the idea, but the situation deserves monitoring.
With Putin's address to the federal assembly next week, there is speculation that the upcoming congress may result in an appeal from Transnistria residents to Russia for acceptance into the Russian Federation.
Vol 2, No 11 - BWR 25.02.2024
Thank you for reading “Barbershop Whispers....Russia” written by Adam A Blanco! “Barbershop Whispers…Russia” is a product of e8Q Technologies, a consultancy with insights on all things Eurasia. Subscribe for free to receive new posts.