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submitted 1 week ago* (last edited 1 week ago) by MrMakabar@slrpnk.net to c/ukraine@sopuli.xyz

To be clear it is not hold in $, but in RMB, gold and rubel. Before the war in held $174billion, so a massive decrease.

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[-] Lost_My_Mind@lemmy.world 17 points 1 week ago
[-] tal@lemmy.today 13 points 1 week ago* (last edited 1 week ago)

Probably not, because Russia will cut other spending or increase taxation or something prior to that. They're going to want some amount of reserves.

That being said, what's probably interesting to most is constraining Russia's spending on the war, and that happens if Russia isn't willing to let reserves fall below a given point.

There’s only so many shell games they can play before the house of cards starts to come down. They are HURTING economically and financially. It’s not sustainable for them. This whole war was a giant gamble, and the longer it goes, the worse the odds for Russia. Granted, they’re not great for Ukraine either as time progresses, but they don’t really have a choice in the matter. As long as Ukraine can hold out reasonably well for the foreseeable future, I’m actually pretty optimistic for them in the long run.

[-] tal@lemmy.today 4 points 1 week ago* (last edited 1 week ago)

So I don't know enough about how sustainable the thing is to evaluate this myself, but there's some woman whose name I can't remember, but who has shown up on a number of interview panels with Michael Kofman (who is usually doing the hard power side of things) and Dara Massicot. She specializes in the economic and political-economic side of things in Russia, and every time she's come up, she's said more-or-less that at the level of burn that Russia's doing, it's sustainable. Doesn't mean that it's a good idea for Russia to do so, but that Russia's not going to explode economically as long as the desire to keep doing what they're doing is there; that's not a bottleneck as things stand.

Let me see if I can find her name.

kagis

Alexandra Prokopenko at the Carnegie Russia Eurasia Center.

https://carnegieendowment.org/people/alexandra-prokopenko?lang=en&center=russia-eurasia

Alexandra Prokopenko is a fellow at the Carnegie Russia Eurasia Center. She is a visiting fellow at the Center for Order and Governance in Eastern Europe, Russia, and Central Asia at the German Council on Foreign Relations (DGAP).

In her research, she focuses on Russian government policymaking on economic and financial issues.

From 2017 until early 2022 Alexandra worked at the Central Bank of Russia and at the Higher School of Economics (HSE) in Moscow. She is a former columnist for Vedomosti. She is a graduate of Moscow State University and holds an MA in Sociology from the University of Manchester.

Let me see if I can go find something somewhat-recent where she's talking about it.

EDIT: Yeah, here's a 2-month-old video with a DW interview, "How Long Can Putin Afford to Wage War in Ukraine?". Haven't seen this one. Lemme watch through it, put a summary up.

EDIT2:

Sounds like she's saying that it can be continued for a while, but at some point, Russia will have to draw back on some of its priorities.

Condensing this a bit:

The reality is somewhere in the middle, since Russia's economy is a big animal, is a big and rigid animal, it's quite complicated to kill with one shot. With the very short term, the economy is performing well. It's partly because...it was on its recovery growth phase. This growth, of course, is based on export revenues and on high spending. The fiscal impulse from Russian authorities in 2022 and 2023 exceeded 10% of GDP, a historical high in Russian's history, and this economic growth, 3.6% in 2023. But we need to always keep in mind that since Russian government will stop spending or decrease spending, growth figures would be different and we already see the big problem between spending and inflation. Inflation is a problem for Russian authorities. It's a problem because it will mount problems in the midterm and then long term but now well, it seems manageable. But, well it's always a trade-off for policy makers and actually the major reason for the inflation is state spending, so there is a problem of right and the left. In the Russian economy, on one hand, the Russian Central Bank is trying to mitigate inflation, to price growth, and on the other hand, the government continues spending and mostly on war. Putin committed to war expenses in 2024 approximately 8% of GDP. It's another history record in the history of modern Russia, since the state was established after the collapse of the Soviet Union, and it's enormous.

I mean never before has Russia spent so much, and here are extremely high wages of those people who are in trenches, state demand for weapons and ammunition, and inflation of enterprises, which is much higher than the average over economy, and if Russia continues to do so, Putin will need to choose, sooner or later, between his three priorities: financing the war, maintaining people's well-being, so paying pensions at the same amount, keeping wages, and keeping people happy with the payments, and lower inflation, so achieving all three goals in one time...it's impossible.

EDIT3: For context, going from memory, I was reading some historical data graphing historical estimates for how much the Soviet Union's peacetime military spending was during the Cold War, which is a question that produced a surprisingly-wide range of estimates from different institutions, something like a factor of two -- without a market economy, it's hard to determine what percentage of the economy is actually going towards the military. But under Brezhnev, IIRC something like 15% of GDP was within the bounds of estimates.

kagis

https://old.reddit.com/r/AskHistory/comments/17ksd0q/how_big_was_military_spending_in_the_soviet_union/

I believe the Soviet Union spent between 10 and 20 percent of its gross domestic product (GDP) on the military, which was much higher than the US or other Western countries at the time.

https://nintil.com/the-soviet-union-military-spending/

Given my chart, one would say that military spending was around 10-20% of Soviet GDP, so perhaps a compromise figure of 15%, around twice USA spending. However, Harrison 2003 leads some support to the idea that actual military spending was around 20%, at the upper range of the Cold War estimates. Being street bayesians, let's conclude that it was 18% for now.

Now, that high level probably hurt the Soviet Union...but it's also true that they kept it up for quite some time. And that was peacetime spending. If Russia were to be able to do WW2-level spending -- and I'm not sure that that will be politically-acceptable in Russia, nor for it to be sustainable, and keeping in mind that the Soviet Union was also receiving stuff like Lend-Lease assistance during that period, and that ain't happening in this conflict:

https://www.statista.com/statistics/1333250/wwii-military-spending-share-income/

This has a peak of ~60% for the Soviet Union.

[-] MrMakabar@slrpnk.net 1 points 1 week ago

The problem is not if Putin can finance the war, but how much and what he has to cut to do so. That is going to massivly increased the felt burden for the average Russian in the coming months.

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