Russian President Vladimir Putin may soon find himself in “financial distress” due to the ever-rising costs of the war in Ukraine, according to the Institute for War Research (ISW).
An ISW report released on Monday suggests that money spent in support of Putin’s “maximalist goals in Ukraine” could force Russia to “defund” other programs at home and abroad. Putin’s unwillingness to make short-term “sacrifices” and the resource depletion caused by the war could reportedly “undermine” his “geopolitical campaigns around the world.”
The report notes that the UK Ministry of Defense (MoD) recently found that Putin signed into law a law allocating 11 trillion rubles (about $143 billion) to defence, security and law enforcement. The allocation represents about 8 percent of Russia’s gross domestic product in 2021 and more than 30 percent of the country’s total budget for fiscal year 2023.
“Putin thus continues to squander his budget on his war in Ukraine, possibly disappointing other international or domestic campaigns,” the ISW report said. “Russian forces have moved equipment and personnel from other conflict zones, such as Syria and Nagorno-Karabakh, and may downgrade other combat and soft-power deployments in favor of sustaining a protracted war in Ukraine.”
“Putin still appears unwilling to sacrifice his geopolitical initiatives in the short term,” it said. “[He] risks falling into financial dire straits that will leave him unable to reconcile maximalist goals in Ukraine with his global power projection campaigns.”
The report went on to say that Putin’s spending on programs outside of Ukraine “angered” some prominent pro-war Russian military bloggers, who had previously complained that his priorities were “not supplying Russian forces on the battlefield.”
The MoD assessment of the situation that came in the form of a intelligence update released on Saturday night, also hinted that Putin’s budget allocation for 2023 would likely result in Russia struggling to spend on non-battlefield programmes.
“Putin’s approved budget is likely overly optimistic about revenue and spending in 2023,” the intelligence update said. “Therefore, other parts of the Russian budget are likely to come under increasing pressure to bear the costs of the war.”
There is other evidence that financial problems have already had an impact on Russia’s ability to wage war effectively. In early November, ISW reported that the Kremlin had had difficulty disbursing soldier bonuses promised to those who joined the war effort, leading to “increasing social tensions in Russian society”.
Last month’s ISW report predicted that the Russian government “is likely to have to resort more to the federal budget soon” despite “trying” to shift the financial burden onto Russian citizens.
news week has asked the Russian government for comment.
https://www.newsweek.com/putin-risks-financial-predicament-war-drains-russias-budget-isw-1766572 Putin risks ‘financial dilemma’ as war drains Russia’s budget: ISW